HMO stocks up on signs public health plan fading

[Joanne98]

Source: Reuters

NEW YORK (Reuters) - The dwindling prospect of a government-run health insurance plan lifted the shares of managed care companies on Monday and relieved investors who feared the companies could not compete with such a plan.

The S&P Managed Health Care index .GSPHMO of large U.S. health insurers was up 3.8 percent, soundly outperforming a 2.5 percent decline for the broader S&P 500 index .SPX, following comments from the Obama administration that creating a public plan was not essential to a healthcare overhaul.

Health and Human Services Secretary Kathleen Sebelius said on Sunday that nonprofit cooperatives could also fulfill the White House goal of creating more competition on insurance. Analysts viewed the co-ops as far less threatening to managed care companies, even as details on them remain unclear.

"This is the best-case scenario," said David Heupel, a portfolio manager with Thrivent Investment Management. It "takes off the table anything really, really onerous for the group, and that's a huge positive."

UnitedHealth Group Inc (UNH.N) shares rose 3.6 percent at mid-afternoon, WellPoint Inc (WLP.N) climbed 3.3 percent, Aetna Inc (AET.N) increased 5.2 percent, and Coventry Health Care (CVH.N) jumped 5.2 percent.

The stocks rallied even as billionaire Warren Buffett's Berkshire Hathaway Inc (BRKa.N) late on Friday reported lower stakes in UnitedHealth and WellPoint, the industry's two biggest companies.

"Investors believe that risk of competition from a government-run plan has declined significantly, and that the co-op option being floated by Democrat legislators will be relatively benign to the HMO industry," analysts at Jefferies & Co said in a research note.


Read more: http://www.reuters.com/article/hotStocksNews/idUSTRE57G4BU20090817

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Oh GOOD! Now they'll have more money to buy ads accusing us of wanting to kill Grandma!

(sarcasm)

[wtbymark]

1. this is sick. And Proof that there needs to be a public option n/t

[tomm2thumbs]

2. That says it all.

[earthboundmisfit]

3. Translation: "The obscene profit-taking will continue!"

:puke:

[Pryderi]

4. Profits over people...same old song..

[nashville_brook]

5. kicking this for visibility...the champagne is flowing for some people today. nt.

[scentopine]

6. Investment. banks, and insurance, nothing like a monopoly to run up the free market

[nashville_brook]

7. Rachel led her show with this tonite.