Insurer, hospital stocks rise after Republican health-care bill passes House

  • The House voted on the Republicans' Obamacare replacement bill Thursday.
  • Shares of insurers and hospitals rose after the vote
  • UnitedHealth and HCA led the rally.

Shares of hospitals and insurance companies rose after a narrow majority of the U.S. House passed a bill repealing major portions of Obamacare on Thursday. The official vote count was 217 votes to 212.

Shares of major insurer UnitedHealth closed up nearly 1 percent on Thursday.

Leerink Research's managing director of health care services Ana Gupte says she sees the bill's passage as a positive move for major insurers like UnitedHealth, Anthem, and Humana.

"We see the bill passage as positive for the Large Cap Managed Care names UnitedHealth, Anthem, Humana, Cigna, and Aetna, given this repeals the burdensome ObamaCare tax while paving the way for Corporate tax reform with 15-50% of cumulative upside," Gupte said in a note to clients shortly after the bill's passage.

Humana shares closed up 2 percent, while shares of Aetna closed nearly 1 percent higher.

Health-care shares' gains were limited because investors weren't sure of the bill's passage within the Senate. The likelihood for the bill to pass in the Senate would require the replacement legislation to undergo major revisions. As a result, the specific effects on health-care stocks are still unclear.

Despite the slight uptick for HCA, Mizuho Securities' health care analyst Sheryl Skolnick believes passage of a reformed health care bill would be "damaging" for hospital stocks due to political uncertainty.

"Hospitals should not be up, in our view. This is a potentially very damaging bill for them unless amended by the Senate and then passed by the House again," Skolnick said in a note. "Nothing is for sure in this politically bizarre world, but we would avoid the hospitals - this is not good for them in our view - for the most part unless there are compelling cash flows to offset some of the negative impact on Medicaid, cash flow and margins."