(Bloomberg) -- The $250 billion municipal hospital-bond marketis proving immune to Donald Trump’s plan to eliminateObamacare.

Sutter Health is among nonprofits tapping demand for thetax-free debt, with the California chain planning to sell $850million in new securities this week. Health-care bonds are beatingthe overall $3.7 trillion municipal market for a third straightyear as the federal law expanding medical coverage to Americansimproves business.

Related: Obamacare's other success underthreat

Despite the Republican presidential nominee’s goal, the rallyhas been undaunted as investors hunt for yield while rates holdnear record lows.

"There’s lots of demand with all of the money pouring in," saidMike Quinn, a managing director at Chicago-based investment bankZiegler, which underwrites bonds for hospitals. "This is a reallygreat environment for health-care borrowers to issue tax-exemptmoney."

Related: Health care spending goes up, up,up

Borrowing costs have tumbled this year with money flooding intothe securities amid turmoil in financial markets overseas, pushingthe Bond Buyer’s 20-year index to as little as 2.8 percent thismonth, the lowest since the data began in 1961. Debt issued forhospitals has returned 4.8 percent this year, outpacing the 4.1percent gain for the market overall, according to Standard &Poor’s indexes.

Much of the financial gains from President Barack Obama’soverhaul have already emerged, with about 20 million people gainingcoverage through private insurance plans or state Medicaid programssince the passage of the law in 2010.

Hospitals are now facing the prospect of reduced reimbursementsas the government aims to shift from a model where it pays forservices to one where it rewards outcomes.

Republicans have repeatedly failed to repeal the law inCongress, and court challenges to its key provisions were turnedaway by the U.S. Supreme Court.

While Trump has pledged to ask Congress to scrap it assoon as he takes office, doing so outright would bedifficult politically given how many Americans are now covered byit, Morgan Stanley analysts said in a July 12 report.

For S&P Global Ratings and Moody’s Investors Service, U.S.hospitals will manage the risks without undermining their creditratings. Both companies have stable outlooks on the sector, meaningdowngrades and updates will be roughly equal.

"We’re about to enter a period with more uncertainty, but theorganizations have very strong balance sheets and operations," saidKevin Holloran, an analyst at S&P. "The health-care system inAmerica has proven over time to be very resilient andsuccessful."

Republicans have repeatedly failed to repeal the law inCongress, and court challenges to its key provisions were turnedaway by the U.S. Supreme Court. While Trump has proposed replacingObamacare with another experimental approach, outright repeal wouldbe difficult politically given how many Americans are now coveredby it, Morgan Stanley analysts said in a July 12 report.

After sitting on capital plans as implementation of Obamacarestarted, hospitals ramped up borrowing last year to retire morecostly debt, with sales this year already exceeding those in 2014and 2013.

Sutter, which is issuing securities Tuesday through theCalifornia Health Facilities Financing Authority, is using theproceeds to refinance higher-cost debt and to help fund two newhospitals in San Francisco. Based in Sacramento, it runs 28acute-care facilities, two recovery hospitals, four medicalfoundations and 15 home health-care locations.

"We have a consistent operating performance and excellentlong-term stewardship of our balance sheet," said Svend Ryge,Sutter’s treasurer.

Moody’s ranks the debt Aa3, the fourth-highest grade, citing itsstable cash flow and its strong presence in California.

The breadth of the company’s business in California is a draw,said Todd Sisson, a debt analyst in Charlotte, North Carolina, forWells Capital Management, which owns Sutter bonds among its $40.5billion in municipals. While the company may buy some of the newsecurities, it’s limiting holdings of health-care debt because ofthe price run up and cuts providers face after reimbursementchanges begin next year, he said.

“We’ve got considerable headwinds," Sisson said. "The sector’soutperforming at the same time we’re seeing the risk increase.”

Sutter will see Medicare payments actually increase annuallythrough 2019, bond documents show. Still, "estimates of futureimpact would not be reliable" from later calculations ofreimbursements, according to the statement.

The industry has "immunity" to uncertainty, said S&P’sHolloran. "People still get sick, go to the doctor, getsurgeries."

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