Insurers and others in the health sector have stopped the plunge in stock price they’ve experienced since the Obama administration and Democrats forced the legislation through against the will of the American people. Today that has started to change some, as insurers were up, and companies like Medco Health Solutions (NYSE:MHS) and Express Scripts (Nasdaq:ESRX) were touted by Morgan Stanley (NYSE:MS) as being strongly positioned in that sector as the contract season for 2010-2011 arrives.
Medco Health Solutions and Express Scripts are companies which manage the benefits of pharmacy employees.
Some of the insurers enjoying at least a temporary resurgence are HealthNet (NYSE:HNT), Humana (NYSE:HUM) and UnitedHealth Group (NYSE:UNH), all of which were up over 2 percent on the day, with HealthNet rising as high as 5.5 percent, although it has pulled back some as the day has went on.
Humana, which has been under a lot of pressure, got an upsurge from the announcement that Cigna (NYSE:CI) would be offering some of their plans to some of their corporate clients.
While some insurance and health companies are making some moves in relationship to the health-care reform package signed by Obama, it remains to be seen whether it will be repealed or not, and I think many health and insurance companies, as well as investors, are waiting to see what happens in the November elections before going to far to implement what may not be law within a year or so. Hopefully that’s the case, but we’re all going to have to wait to see how deeply the Democrats are beaten in the elections before making any decisions in that regard.
Until that time, it seems the health and insurance sector will experience a lot of ups and downs based on temporary data until all of this works out.
There will be a much clearer picture on where it all will go after the elections, and an even clearer one after that if the political dynamics are changed and voters demand the health-care bill is repealed and real health reform enacted.
If that happens, we’ll then have to wait and see what the public wants after that and proceed accordingly. That implies the health and insurance sector will largely be on hold until those decisions are made. That could be as long as two years into the future, depending on the many variables mentioned above.
