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Associated Press
Managed care stocks rise as health reform stumbles
By TOM MURPHY , 06.18.09, 03:35 PM EDT
INDIANAPOLIS --
Managed care stocks surged Thursday as the health care reform push wobbled in Washington.
Investors have worried for weeks about the possibility of a government payer being created to compete with private health insurers. Many Democrats, including President Barack Obama, strongly support that option as part of a plan to provide coverage for nearly 50 million uninsured people.
But Republicans and businesses groups have argued that it would lead to unfair competition by matching private insurers against a government plan that didn't have to make a profit.
The Democrats' push suffered setbacks this week, as committees working on bills fell behind schedule. The nonpartisan Congressional Budget Office also said a proposal from the Senate Health, Education, Labor and Pensions Committee would cost about $1 trillion over 10 years but still leave 37 million people uninsured.
"We are convinced more than ever that any significantly market-changing legislation stands little to no chance of passage," BMO Capital Markets analyst Dave Shove said in a note to investors. "It appears highly unlikely that any bill will come out of the Senate or the House until after August recess.
"This greatly dims the chances of passing a reform bill in 2009 - or maybe in this administration."
Edward Jones analyst Steve Shubitz noted that the entire health care sector rose in trading Thursday. But he added that managed care stocks are particularly volatile.
"These stocks kind of trade on emotion," he said in an interview. "It's like people now on the margin are saying, 'Maybe there won't be a public plan or maybe ... it will be so watered down that it will take a lot of years before it really impacts the private insurance companies.'"
Several health insurance stocks outpaced the overall market. The Standard & Poor's 500 index was up 1 percent in Thursday afternoon trading.
Shares of Coventry Health Care Inc. were up more than 9 percent, or $1.61, to $18.37; Humana Inc. shares were up more than 7 percent or $2.11 to $30.45; Cigna Corp. shares also climbed 7 percent, or $1.64, to $23.48.
WellPoint Inc., UnitedHealth Group Inc. and Aetna Inc. all saw their share prices rise 4 percent or more.
BUSINESS AS USUAL
Where is the forum ***?? He's been very quiet lately
Managed care stocks rise as health reform stumbles
By TOM MURPHY , 06.18.09, 03:35 PM EDT
INDIANAPOLIS --
Managed care stocks surged Thursday as the health care reform push wobbled in Washington.
Investors have worried for weeks about the possibility of a government payer being created to compete with private health insurers. Many Democrats, including President Barack Obama, strongly support that option as part of a plan to provide coverage for nearly 50 million uninsured people.
But Republicans and businesses groups have argued that it would lead to unfair competition by matching private insurers against a government plan that didn't have to make a profit.
The Democrats' push suffered setbacks this week, as committees working on bills fell behind schedule. The nonpartisan Congressional Budget Office also said a proposal from the Senate Health, Education, Labor and Pensions Committee would cost about $1 trillion over 10 years but still leave 37 million people uninsured.
"We are convinced more than ever that any significantly market-changing legislation stands little to no chance of passage," BMO Capital Markets analyst Dave Shove said in a note to investors. "It appears highly unlikely that any bill will come out of the Senate or the House until after August recess.
"This greatly dims the chances of passing a reform bill in 2009 - or maybe in this administration."
Edward Jones analyst Steve Shubitz noted that the entire health care sector rose in trading Thursday. But he added that managed care stocks are particularly volatile.
"These stocks kind of trade on emotion," he said in an interview. "It's like people now on the margin are saying, 'Maybe there won't be a public plan or maybe ... it will be so watered down that it will take a lot of years before it really impacts the private insurance companies.'"
Several health insurance stocks outpaced the overall market. The Standard & Poor's 500 index was up 1 percent in Thursday afternoon trading.
Shares of Coventry Health Care Inc. were up more than 9 percent, or $1.61, to $18.37; Humana Inc. shares were up more than 7 percent or $2.11 to $30.45; Cigna Corp. shares also climbed 7 percent, or $1.64, to $23.48.
WellPoint Inc., UnitedHealth Group Inc. and Aetna Inc. all saw their share prices rise 4 percent or more.
BUSINESS AS USUAL
Where is the forum ***?? He's been very quiet lately
