The House Republicans' failure to repeal and replace the Affordable Care Act will backfire, strategist Mark Grant told CNBC on Tuesday.
Grant, chief strategist at Hilltop Securities, said Obamacare is going to crater and, when it does, it will "come back to bite the Congress."
Grant said he doesn't think that Trump, who tried to rally support for the GOP health bill, will be "bloodied" by the failure. He said the market has never cared for health care but has rallied on Trump's policies regarding tax reform and deregulation.
"Obamacare had nothing to do — as in zero — with the fact that the markets have been up since the election," he said. "It's a political issue, but it's not an economic issue."
Grant said on the morning of the election that investors would be smart to buy stocks in the event of a surprise Trump victory.
That advice sure paid off. Since the election, the Dow Jones industrial average has surged 12 percent, the S&P 500 has gained nearly 9.5 percent and the Nasdaq composite has risen almost 12.5 percent.
House Republicans had contended that rising insurance premiums was the main reason for repealing and replacing Obamacare.
A revised estimate by the Congressional Budget Office showed, however, that average premiums for single customers in the GOP bill would have been 15 to 20 percent higher in 2018 and 2019 than under Obamacare.
The CBO noted that average premiums by 2026 were projected to be 10 percent lower than under Obamacare.
After the setback Friday, House Speaker Paul Ryan said that Obamacare "is the law of the land" for the foreseeable future. Trump said the administration would move to slashing taxes.