Municipal hospital bonds see gains as ACA repeal lags

Alia Paavola - Print  | 

As Republicans' efforts to repeal and replace the ACA continue, tax-exempt hospital debt is seeing growth in the municipal bond market, according to Bloomberg.

The securities returned 4.3 percent this year, about 0.7 percent point more than the municipal market as a whole, according to Bloomberg, which cited the S&P Global Rating indexes.

President Donald Trump's initial pledge to quickly repeal and replace the ACA weighed on municipal hospital bonds as uncertainty loomed over the industry. However, dismantling the ACA is taking longer than many Republicans expected. The delay is allowing hospitals across the nation to continue to experience the benefits of the ACA's Medicaid expansion, which reduced the financial strain of providing care to the uninsured, according to the report.

In addition to the ACA shaping the high returns, hospital bonds benefited from a decline in interest rates, which caused investors to take on more risk.

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