Sector Snap: Insurers gain ground after speech
NEW YORK — Shares of health insurers gained some ground Thursday after President Barack Obama reaffirmed his commitment to reforming the health care system in a televised speech to a joint session of Congress.
The debate over specific ways to reform the system continues, and the Wednesday night speech had few surprises in that area. But, analysts have said the speech seemed to signify that a potential public health insurance option, a negative concern for the insurance industry, will be less likely to wind up in a final bill.
Minnetonka, Minn.-based UnitedHealth Group Inc. gained 17 cents to reach $28.57, while Indianapolis-based WellPoint Inc. gained 96 cents to reach $53.80, and Hartford, Conn.-based Aetna Inc. rose 59 cents, or 2 percent, to reach $29.84. Shares of Louisville, Ky.-based Humana Inc. jumped $1.12, or 2.9 percent, to $39.19.
Obama remained open to discussion on the public plan issue, but insisted that a public option is not crucial on its own.
“It is only one part of my plan, and should not be used as a handy excuse for the usual Washington ideological battles,” he said.
The plan has been a key industry concern, with some companies citing its potential to take customers and revenue away from private insurers.
“While the President called for the creation of an insurance exchange and a public health insurance option, soothing liberal Democrat concerns, he downplayed the idea of the public option being a government takeover of the health care system as well as the impact on managed care providers,” said Jefferies & Co. analyst Arthur I. Henderson, in a note to investors.
Still, he expects to see increased volatility in health care stocks as the Senate Finance Committee begins to mark up its proposed reform bill.
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