NEW YORK (
) -- Shares of health-insurance providers leaped Monday after a key Senate vote on the country's health-care overhaul put legislation on track for passage before Christmas.
"The ultimate passage of health care reform, expected early next year, will serve as a positive catalyst for the managed-care universe," said Gregory Nersessian, in a note to investors.
Nersessian raised his price targets on Aetna, Cigna, Humana, Molina, UnitedHealth and Wellcare Health Plans among others. He also boosted his profit estimates for Health Net.
shot up 4.7% to $34. In its third-quarter earnings report, Aetna said it expected in 2010 that ongoing uncertainty about the U.S. economy with respect to employment and growth would continue to impact provider and member behavior as well as customer preferences. Despite this uncertainty, it said it continued to have a great deal of confidence in its long-term future, given its well-positioned, diverse portfolio of businesses, its customer-focused strategy and its underlying financial strength.
jumped by 4% to $38.40. In its third-quarter earnings report, Wellcare said that its membership as of September 30, 2009, decreased to 2.3 million compared with 2.5 million members as of September 30, 2008. It said that while its investments in infrastructure are strengthening service to its members, providers and government clients, its financial outlook for 2010 remains challenging -- it faces declining membership in its Medicare segment and continued substantial investments to improve its capabilities and cost structure.
jumped 3.9% to $37.20. In its third-quarter earnings report, Cigna said that it expected full-year 2009 shareholders' income from continuing operations, excluding realized investment results, the results of the GMIB (guaranteed minimum income benefits ) business and special items, to be higher than 2008 due to lower losses in the Run-off Reinsurance segment. The company said it expected 2010 shareholders' income from continuing operations, excluding realized investment results, the results of the GMIB business and special items, to be comparable to or slightly higher than 2009.
rose 3.5% to $45. It was reported today that Humana has entered an agreement with a Denver practice.
Denver primary care group practice
New West Physicians
will provide services to Humana plan members, the health insurer said Monday.
New West serves about 250,000 patients in and around Denver. Humana described the agreement as long-term but did not disclose financial considerations. It said New West has 13 offices with 49 physicians and 12 nurse practitioners and physician's assistants. The contract covers Humana commercial health-plan members and does not include Humana Medicare Advantage members. Humana has about 110,000 members in Colorado.
Other major gainers in the insurance sector included
, which rose 3.2% to $11.60, and
, which gained 2.4% to $23.80.
increased 2% to $32.20, while
advanced 2.9% to $60.
rose 2.7% to $24.20 and
jumped 3.3% to $23.20.
Shortly after 1 a.m. on Monday, 60 senators voted to shut down a threatened Republican filibuster on a health-care reform bill. The Senate bill would make health insurance mandatory for nearly everyone, covering 30 million currently uninsured Americans. A final vote in the Senate is expected by Christmas Eve.
The House passed health-care legislation in November. The two bills must still be merged into one before President Barack Obama can sign it into law.
The Senate bill does not contain a provision for a government-run insurance plan, which managed-care companies have contested. The House bill, however, does include that option.
Investors have been worried for months that a public option would provide unfair competition to private insurers in part because it would receive government financial backing and could set reimbursement at artificially low levels.
-- Reported by Andrea Tse in New York
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