Republicans Present Healthcare Bill: Top 5 Gainers

Health insurers rallied after the Senate Republicans released a draft Bill to replace Obamacare, with expansion of Medicaid being seen as one of the most encouraging moves. Hospitals have benefited from higher rates of insured people under Obamacare.

Senate Republicans’ unveiling of the Healthcare Bill was also a shot in the arm for drug companies, as they hope that the much-awaited tax reforms will get implemented. Biotech stocks are already fueling the healthcare sector as recent reports suggest that efforts by Washington to rein in drug prices would not be as harsh on the industry as feared.

The Senate Healthcare Bill in Details

After weeks of heated discussions and arguments, Senate Republicans unveiled the text of their health care refurbish plan. The new Bill won’t change the Obamacare as drastically as the House legislation passed in May, but demands significant cuts that would likely benefit the uninsured.

Medicad was expanded by Obamacare, which provided health coverage to millions of low income Americans who couldn’t afford it earlier. The Senate Bill will continue Medicad expansion under Obamacare for the next three years and will roll it back in 2021. But, from now, states won’t receive an open ended funding and instead will receive a fixed amount.

Obamacare had assured coverage to people with pre-existing ailments and restricted insurers from charging them based on health conditions. The Senate Bill, however, will allow insurers to provide less than needed coverage in states that get waivers for essential health benefits. Obamacare also required every health plan to cover essential benefits. These included maternity and hospital care, prescription drugs and mental health, to name a few. The Senate Bill, did allow states to redefine what qualifies as an “essential” element of a healthcare plan.

In order to expand healthcare coverage, Obamacare raised money by imposing two new taxes on the wealthy. The Senate Bill, however, eliminated those taxes. Obamacare, in the meantime, provided tax subsidies to help people with a certain level of income; the Senate Bill being largely in line with it. Obamacare also aided young people to get insured by allowing them to stay on their parent’s insurance until they turn 26. The Senate Bill won’t remove such a provision. Last but not the least, when it comes to employer affordability mandate, the Senate Bill wants large employers to provide affordable coverage to most Americans.

Overall, as rightly pointed out by Spencer Perlman, director of health-care research at Veda Partners, the Senate plan has the “same architecture” but with “nicer furnishings”.

GOP Health Bill Boosts Hospital, Health Insurers

Hospital and insurers rallied following the release of the Senate GOP health bill, which have been more favorable to them than the House of Representatives Bill passed in early May. The rollback of the expansion of Medicaid, the government insurance program for low income Americans was particularly seen as a positive move.

Hospitals have already benefitted from Obamacare’s coverage expansion. HCA Healthcare Inc (NYSE:HCA) rose 2.5% following the release of the Bill, while Tenet Healthcare Corp (NYSE:THC) gained 1.5%. Among large insurers that specialize in Medicaid also gained, with Centene Corp (NYSE:CNC) up 3.6% and Molina Healthcare, Inc. (NYSE:MOH) rising 2.3%.

Drug Stocks Hit Record Highs

Healthcare stocks skyrocketed, with the SPDR S&P Pharmaceutical (HN:XPH) rising 1.3% and the SPDR S&P Biotech (MX:XBI) Zacks Investment Research

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Written By: Zacks Investment Research