Health care moving on debates. Governor Mitt Romney's performance last night has investors in certain health care sectors a bit nervous. (Read more: Kudlow: A Huge Victory for a Principled Mitt Romney)
Obamacare is perceived to be a positive for hospitals, slight negative for HMOs.
Today, that trade is being reversed: hospital stocks are down, HMOs are up.
To summarize: Obamacare is perceived to be a positive for hospitals. The reason: more insured means fewer uninsured at hospitals. That makes sense. Tenet, HCA, Health Management all down.
Obamacare is perceived by Wall Street to be a slight negative for HMOs. The reason: employers and employees may gravitate to cheaper, government exchange plans. UnitedHealth, Cigna and Aetna all up.
Under this theory, the 40 million uninsured who would get insurance under Obamacare would be offset because a lot of employers may drop their healthcare and put their employees into government exchange plans. Those government plans will offer a low-cost, low-benefit plan, and that might attract a lot of other people who are not part of employee plans.
One other point: HMOs with heavy exposure to Medicaid are down today: Centene and Wellcare. This is likely because Obamacare expands Medicaid.
—By CNBC’s Bob Pisani
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