Managed Care Rallies on Aetna, Obama
(Aetna, Obama story updated for Democratic Party comments on health vote)
WASHINGTON D.C. (
) -- The conventional wisdom in the debate over where the greatest pain will be felt in health care reform zeroes in on the managed care sector. If Friday morning's trading in managed care stocks is any guide, health care investors are modestly positive on the year-long effort -- and the year-long stock overhang -- finally nearing the legislative finish line.
The biggest managed care stocks --
Aetna
(AET)
,
Cigna
(CI) - Get Report
,
WellPoint
(WLP)
, and
UnitedHealth Group
(UNH) - Get Report
-- were all in positive territory on Friday morning.
Aetna and Cigna were leading the way among managed care stocks, up in the range of 3% on Friday in the early afternoon. Aetna and Cigna were both trading at elevated levels early on Friday afternoon, with Aetna surpassing its average daily volume by 3 million shares.
The Aetna-led managed care rally was not just related to health reform, though.
Aetna reaffirmed its 2010 guidance on Thursday, and held a conference call with investors and analysts on Friday morning to discuss the outlook. The conference call was originally intended to be an investor day, however, Aetna cancelled the investor day given "the current political environment," the managed care company said in a statement.
While Aetna raised its first quarter 2010 estimate to 66 cents, its full year outlook was unchanged.
On the Aetna call, CFO Joseph Zubretsky was upbeat, saying, ""Early indications are positive.... While we are in the midst of a challenging economic and political environment, we remain committed to health-care reform that addresses access, affordability and quality."
Cigna and Aetna's gains were followed by between 2% and 3% gains in share price from UnitedHealth,
Health Net
(HNT)
, WellPoint and
Coventry Health Care
(CVH)
, with a gain over 2%, also.
Even
Humana
(HUM) - Get Report
, which is considered worst-positioned of the managed care stocks based on is exposure to Medicare, was in modestly positive territory.
On Friday, Democratic leaders were scurrying to shore up the math of the 216 votes required for passage of the reform package.
Democratic House Majority Leader Steny Hoyer said to reporters on Friday, "We're going to have the votes."
Jim Clyburn, the Democrat's de facto vote-accountant in the House, said to the press, "I feel very sure that we will vote sometime after 2 p.m. on Sunday and the bill will pass."
The lining up of the votes from nervous Democrats facing mid-term election wrath was the second-consecutive day of simultaneous numbers games being played out along the health care legislative abacus. On Thursday, the Congressional Budget Office estimate that the reform package would save $138 billion in ten years and in the subsequent decade would save $1.2 trillion, buoyed the President Obama's earlier claims about deficit reduction.
President Obama postponed a trip to Pacific nations on Thursday to stay home and lead the fight for enactment of the health care reform package, and it's hard to argue with that logic, as there are likely a few more election votes tied up in health care reform than in Guam.
President Obama spoke on Friday morning in forceful terms describing the upcoming vote and potential passage of health care reform as "a victory for the American people."
In the least, resolution on health care reform -- coupled with the upbeat Aetna outlook -- seemed to be a minor victory for managed care stocks on Friday.
-- Reported by Eric Rosenbaum in New York.
RELATED STORIES:
>>Obama Stays Home to Finish Health Fight
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