Obama's Firm Stance Is Killing Health Stocks

Talk about the opposite of President Clinton. Both Clinton and Obama campaigned on the idea of reining in health care costs. Clinton even went so far as to go to Merck's (MRK - commentary - Cramer's Take) headquarters and rail against big pharma, something that exceeded any of the tough talk of Obama.

But once Clinton came in, his health care plans were so diffuse and convoluted, it turned out to be all bluster. The stocks rallied and rallied, his bashing turned out to be a great opportunity to buy just about every private enterprise having to do with health care, from devices and pharmaceuticals to health maintenance organizations and cost containers.

Wow, what a difference! Obama, it turns out, meant it!

He's waging war against the health maintenance organizations, the cost containers. He's changing the rules on Medicare in a way that Humana (HUM - commentary - Cramer's Take) or UnitedHealth (UNH - commentary - Cramer's Take) never thought was possible. He's destroying the margins of Aetna (AET - commentary - Cramer's Take) and Cigna (CI - commentary - Cramer's Take). These companies, particularly Humana, have this tremendous Medicare senior plans where they were just raking it in and were subsidized by the government.

So now they are coming for everything in the sector, as reimbursements could be cut for everything. That means some pain in Genzyme (GENZ - commentary - Cramer's Take), which has high-priced drugs that may not be protected. And some heart assists, like St. Jude (STJ - commentary - Cramer's Take), which have been doing excellently, are getting killed. Drug stocks -- no one thinks they can get through unscathed now.

It didn't help that Express Scripts (ESRX - commentary - Cramer's Take) sees some weakness, as people might even be cutting back on taking drugs! Nasty.

This group's been a lone winner. It might regain luster if we can find out that the war is just against this health care cost containment group, which Obama said didn't cut costs or contain anything. In fact, he came perilously close to saying that this group is just a tax on the system, not unlike Sallie Mae (SLM - commentary - Cramer's Take), which he wants to destroy because it would be better to give loans direct from the government. Look at that stock!

I have felt that Obama thought that the Aetnas and the UnitedHealths should be nonprofits. He is sure making it that way.

Health care had been a safe haven from the awful economy. That might be true, but now we see it's no safe haven from Obama.

The worst dreams of the capitalists are being realized; stocks just got even more unsafe than they were before this budget came out.

At the time of publication, Cramer had no positions in the stocks mentioned.

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