NEW YORK ( TheStreet) -- As health care sector earnings season begins, a key focus will be on industry consolidation after the Supreme Court's confirmation of the Affordable Care Act. Disappointing near-term revenue and profit trends could take a back seat to optimism about Obamacare leading to mergers and acquisitions.
The nation's top court upheld Obamacare in June, and on July 9 managed care giant WellPoint (WLP) said it would buy Amerigroup (AGP), a managed care specialist focusing on Medicaid and Medicare plans, for $4.9 billion. That deal sparked speculation other sector giants, including Humana (HUM), Cigna (CI), Aetna (AET) and UnitedHealth (UNH), would also look to make acquisitions.
In the least, with a weak earnings outlook for health care providers as they brace for the impact of Obamacare, M&A is expected to be one of two key topics of discussion for CEOs, alongside post-health care reform policy loss ratio estimates.
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