Insurers have complained nonetheless.
"We remain concerned about the impact some provisions of the law will have on the affordability of coverage," wrote Robert Zirkelbach, a spokesman for industry trade group America's Health Insurance Plans (AHIP)
Of particular concern, according to Zirkelbach, is a tax on health insurance set to go into effect in 2014. According to AHIP's Web site, "the amount of the tax will be $8 billion in 2014, increasing to $14.3 billion in 2018, and increased based on premium trend thereafter. The Joint Committee on Taxation estimates that the health insurance tax will exceed $100 billion over the next ten years."
Health insurers face "abundant systemic anger," according to Brookings' Aaron, leading me to ask him whether their continuing profit growth and equity market outperformance might make the industry vulnerable to additional taxes.
But he doesn't think that makes sense.
"That will simply raise the price overall. They will charge more for whatever they do for you or for whatever insurance coverage they give and it won't materially have an impact on the incentives you face at the time you go in for health care," he said.
Nonetheless, and despite his long-term bullishness on the health care industry's overall profit potential, Brookings' Aaron said he believes over the medium term the sector may very well face pushback on pricing.
"A lot of of health care analysts believe that one of the reasons [the U.S. spends] dramatically more than anybody else in the world is that our prices are sort of crazy," Aaron said.
Price cuts would hurt profitability in every segment of the health care industry, Aaron believes, with the exception of nursing services. Nurses, he argued, are "indispensable," he said. "We're not overpaying and we're not overstaffed."
A full-blown recovery is another potential obstacle to the health care sector's outperformance, according to Tim Ghriskey, who oversees investment firm Solaris Asset Management. Ghriskey said he believes health care's strong performance in 2013 has partly been a reflection of defensiveness on the part of investors who are uncertain about the state of the economy. If the recovery gains full steam, he expects health care stocks to underperform the market. He said Solaris is market weighted in health care stocks on the view the sector "has very good growth but the valuations to us are a bit stretched."
Despite these pitfalls, if health care stocks can lead the market even in a rare period of slowing sector growth, their potential if that trend should reverse appears to be even greater. As a result, it's hard to bet against the sector's long-term prospects.
Written by Dan Freed in New York