Despite a mid-month surge from the Dow Jones Industrial Average, advisor confidence in the economy leveled off in April as many financial consultants worried about the impact of health care reform. In April, the Advisor Confidence Index, which gauges advisor views on the economy and stock market, declined 0.46% to 108.08. from a month earlier.

This month, Rydex|SGI also surveyed advisors on their opinion regarding what the passage of health legislation will mean for the economy and the markets. About 79% said that they think health care reform will increase the federal deficit and 62% think health care reform will slow economic growth.

Only 7% of financial professionals surveyed think health care reform will stimulate economic growth.  

Overall, advisor confidence levels have not changed significantly since March. The index, which had improved in March, stayed at the same level in April as the U.S. economy slowly continued its recovery.

“The U.S. economy is diverse and resilient. Jobs will be added back slowly, and the recovery will continue, albeit at a slow pace,” said Rob Siegmann, an advisor with Financial Management Group.

Three of the four measures in the index declined this month, with the most pessimistic forecast centering on the stock market outlook and the only optimistic centering on the current economic outlook.

Advisors worry that healthcare reform could hamper how wealthy individuals invest. Beginning  in 2013, people earning more than $250,000 annually will see Medicare taxes increase to 2.35% from 1.45%, and the same group will be hit by an additional 3.8% Medicare tax on investment income.

“The recovery is still on track, [with] no significant signs of inflation ... yet,” said Bill Ramsay of Financial Symmetry Inc. “Health care reform has some good concepts, yet it appears to lack some teeth in putting downward pressure on prices.”