Cramer: Sell These Health-Care Stocks Now!

The survival of health-care reform was a big topic on Wednesday, after a Republican captured the Massachusetts Senate seat once held by Ted Kennedy. The win by State Senator Scott Brown over State Attorney General Martha Coakley killed the Democrats’ majority and threatened to derail President Obama’s agenda, leaving investors wondering how to trade the news.

Cramer's suggestion? Clear out of the Medicare-related HMOs. If Washington decides to implement spending cuts, they will most likely come from that massive government program.

“They should be sold right now,” the Mad Money host said of the HMOs, specifically mentioning UnitedHealth Group and Humana . “They could be losers either way from here.”

He recommended instead health-care companies that are reporting strong earnings, such as Covidien. Cramer said that if it weren’t for an overall bad day in the markets, Covidien might have climbed $5 on Wednesday rather than just $2 and change.

“That’s how great that quarter was,” he said.

Cramer also endorsed Bank of America’s report, pointing to what looked like a peak in bad loans. That peak is the point in the cycle where investors want to buy banks, he said, rather than wait for the perfect quarter.

“When things are perfect,” Cramer said, “the move is over.”

Lastly, Cramer tried to dispel the speculation swirling around Citigroup CEO Vikrim Pandit. The talk on Wall Street is that he will be fired, but Cramer can’t understand why. Pandit “delivered the numbers,” pushed through mass layoffs and moved his company into growing emerging markets. Cramer urged investors to recognize the enormous task on Pandit’s shoulders.

“This thing is a giant aircraft carrier,” Cramer said of Citigroup. “It’s not a speed boat.”

Cramer said Citi’s low is most likely the offering price of its most recent secondary: $3.15.

Cramer's charitable trust owns Bank of America.

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