- Stocks of hospital companies like Hospital Corp. of America and Quest Diagnostics had steep jump after ‘Obamacare’ announcement
- But stocks were down as they awaited decision
Stocks of hospital companies rose sharply and insurance companies fell Thursday after the Supreme Court upheld a requirement that almost all Americans carry health insurance.
The stock of Hospital Corp. of America, the largest private hospital chain in the United States, rose 8.5 per cent. Quest Diagnostics rose almost 3 per cent.
The sharply divided Supreme Court upheld the centrepiece of Obama’s signature healthcare overhaul law that requires that most Americans get insurance by 2014 or pay a financial penalty.
The 2010 law is designed to expand coverage to more than 30 million currently uninsured Americans, through insurance exchanges where people can shop for coverage and an expansion of the Medicaid program for low-income Americans.
Expanding the pool of paying patients stands to benefit hospital companies since they will have more paying customers with insurance instead of uninsured patients.
‘The status quo was maintained,’ said Tim Nelson, an analyst with Nuveen Asset Management.
‘There was fear that if the mandate went away, hospitals would lose volume. Hospitals should be a major beneficiary of this whole thing, but the uncertainty isn’t going away. Now it’ll just shift to the election.’
Under the law, insurers face government review of premium rate increases, requirements of spending on medical care and fees on the sector starting in 2014.