NEW YORK (AP) — A Stifel Nicolaus analyst said Monday that the threat of health care spending cuts could hurt a variety of stocks in the health care sector, including companies that own hospitals, rehabilitation and nursing facilities, and companies that own health care real estate.
Because of an obsolete 1990s budget law, Medicare payments to doctors are scheduled for cuts every year. Congress waives the cuts on an annual basis but has never repealed the rule itself. In 2013, payments to doctors were scheduled to be cut 27 percent, and in 2014, the number is projected at 24.4 percent.
Earlier this year, the Congressional Budget Office lowered its estimate for how much it would cost to repeal the formula that is responsible for the proposed cuts: it believes the change would cost $138 billion over the next 10 years.
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