Health Care Winners & Losers: Insurers Fall

As Congressional Democrats today announce legislation designed to reinvent the nation's healthcare system, publicly traded HMOs stand to have their profits trimmed, should the bill pass into law.

Under the plan, health insurers would be required to provide coverage to people no matter what (including those with preexisting conditions). Companies could also face competition from government programs created by the new law to sell insurance to the public.

House Speaker Nancy Pelosi and Rep. Henry Waxman unveiled the bill at a press conference in Washington Tuesday afternoon. It will be debated in committee later this week.

The market, however, did not wait to respond.

Managed-care stocks were largely lower Tuesday. Leading the declines were Humana(HUM Quote), which fell nearly 8% to $28.21, and Health Net(HNT Quote), which shed almost 15% to close at $12.04.

The bigger names held up better. UnitedHealth(UNH Quote) slipped only 1% to $24.77; Cigna(CI Quote) lost a mere 11 cents to $24.57; WellPoint(WLP Quote) was down just 9 cents to $49.69; and Aetna(AET Quote) traded basically flat, closing at $26.30.