Hospital Shares Bounce as Obamacare Replacement Opposition Grows

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Bloomberg reports that HCA Holdings (HCA), Tenet Healthcare (THC), and Universal Health Services (UHS) shares have been on a rollercoaster ride in recent days, with the stocks of all three companies seeing wild fluctuations in reaction to “deliberations and developments” concerning the Republican-backed Affordable Care Act replacement.

The stocks tend to rise when there are indications that Republicans are having trouble reaching an agreement. However, they also tumble when it is reported that sponsors of the legislation are moving closer to an agreement. Shares of Tenet have fallen by 50% since the introduction of the legislation at the beginning of this month, while shares in HCA have risen by 20%.

The article goes on to state that industry groups like the American Hospital Association and America’s Health Insurance Plans (AHIP) are campaigning against the replacement bill, warning that there would be “chaos” if it was signed into law.

However, the Street is largely unconcerned about this opposition, believing hospitals stand to gain financially from a repeal of the Affordable Care Act. 

There are currently three replacement bills in Congress, with the most conservative of them not expected to gain enough support to be passed. However, this is unlikely to stop legislators from proposing it anyway, in an attempt to try and convince more moderate Republicans to support their plan.

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