Managed Care Stocks Rise As Health Reform Stumbles

TOM MURPHY

INDIANAPOLIS (AP) — Managed care stocks surged Thursday as the health care reform push wobbled in Washington.

Investors have worried for weeks about the possibility of a government payer being created to compete with private health insurers. Many Democrats, including President Barack Obama, strongly support that option as part of a plan to provide coverage for nearly 50 million uninsured people.

But Republicans and businesses groups have argued that it would lead to unfair competition by matching private insurers against a government plan that didn't have to make a profit.

The Democrats' push suffered setbacks this week, as committees working on bills fell behind schedule. The nonpartisan Congressional Budget Office also said a proposal from the Senate Health, Education, Labor and Pensions Committee would cost about $1 trillion over 10 years but still leave 37 million people uninsured.

"We are convinced more than ever that any significantly market-changing legislation stands little to no chance of passage," BMO Capital Markets analyst Dave Shove said in a note to investors. "It appears highly unlikely that any bill will come out of the Senate or the House until after August recess.