Hospital shares rally, insurers fall on U.S. health-care ruling…….Schoenberger quoted
June 28, 2012 Leave a Comment
Shares of hospital chains jumped, while large health insurer stocks fell on Thursday after the U.S. Supreme Court upheld the centerpiece of U.S. President Barack Obama’s signature healthcare law.
In a 5-4 decision, the court backed the component of the law that requires that most Americans buy insurance by 2014 or pay a financial penalty. The 2010 law aims to broaden coverage to more than 30-million uninsured Americans, through state-based insurance exchanges where people can shop for coverage and through an expansion of the Medicaid program for low-income Americans.
Widening the pool of paying patients stands to benefit hospital companies, which are often left to cover the high medical bills of the sick who have no coverage.
“For hospitals, this is a huge win,” said Michael Wiederhorn, an analyst with Oppenheimer & Co. “In the short and the long term, it will reduce bad debt.”
Shares of HCA Holdings Inc. and Community Health Systems Inc., the two largest hospital companies, each rose sharply. HCA was up 8.8 per cent at $28.95 (U.S.) and Community Health Systems was up 9.3 per cent to $27.87 around midday.
“It’s good for us,” said Alan Miller, chief executive office of Universal Health Services Inc., which runs acute and mental health hospitals.
“You’ve got a lot of people now who are going to be covered and they’re going to pay their bills, or the federal government or the state or somebody is going to pay their bills.”Read More