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By Erik Kobayashi-Solomon | 03-29-2010 02:26 PM

How Will Reform Treat Pharma and Insurers?

Morningstar's Matt Coffina and Damien Conover dig into some specific impacts of the recently passed reform measures.

Erik Kobayashi-Solomon: Hi, I'm Erik Kobayashi-Solomon, coeditor of Morningstar's OptionInvestor. Today it's my great pleasure to welcome Damien Conover and Matt Coffina from the Morningstar health-care team. Guys, thanks for coming.

Damien Conover: Thanks for having us, Erik.

Kobayashi-Solomon: Matt, I want to turn to you first to ask, just recently the health-care reform bill has been passed. I just want to get a general idea, what does this do to the business of health care?

Matt Coffina: I think the biggest effect this is going to have on health-care investors is that there's going to much reduced uncertainty. This was really a huge overhang over the entire sector during this debate, and even though the bill was passed, we know exactly what it looks like. There's much less uncertainty out there, which I think will be a positive for this sector.

The other effect I would point to is I think there are going to be increased volumes pretty much across the health-care space. The number of uninsured people is expected to fall by 32 million over the next 10 years, and all of those people are going to be consuming more health-care than they were before, which is generally positive for this sector.

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