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Obamacare Replacement Bill Pulled: Hospital Stocks Rally
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President Donald Trump and Republican party leaders suffered a setback with a healthcare bill to repeal and replace Obamacare (Affordable Care Act, or ACA) being pulled from the House floor on Friday when it became clear that there would not be enough votes to pass the bill. The House was initially scheduled to vote on the American Healthcare Act (AHCA) on Thursday but the vote was postponed amid concerns regarding the bill garnering enough support. However, even after a lot of discussion and negotiations, it became clear on Friday that the bill would not get enough support.
What Went Wrong?
All throughout his election campaign, President Trump had said that his first course of action, once elected, for Obamacare would be to ask Congress to repeal it immediately.
However, the AHCA failed to get enough support with opposition from both conservative as well as moderate lawmakers. Many are of the view that the AHCA did not fully address the issues associated with Obamacare.
For others, a key concern was that with the new health care act, a large number of Americans would lose coverage. This concern was further supported by a report issued by the Congressional Budget Office last week. According to the report, if the new act were to go through, 14 million people would be uninsured in 2018 with the number expected to increase to 21 million in 2020 and 24 million in 2026.
Moreover, according to a Quinnipiac University national poll released last week, only 17% American voters were in favor of the Republican health plan that would replace Obamacare with 56% against and 26% undecided.
Hospital Shares Rally
While the market remained jittery for a major part of last week due to the uncertainty surrounding the future of the healthcare act, hospital stocks, which were among the worst hit after election results were announced on Nov 8, rallied on the pulling of the healthcare bill. These stocks had benefited significantly under Obamacare given the rise in the number of people with health insurance coverage. Needless to say, these companies would have been among the worst affected had the new healthcare act got support, given the expected decline in insured people.
With the bill being pulled, hospital stocks like Tenet Healthcare Corp. (THC - Free Report) , up 7.4%), HCA Holdings, Inc. (HCA - Free Report) , up 3.5%), LifePoint Health, Inc. , up 3.5%), and Community Health Systems, Inc. (CYH - Free Report) , up 9.7%) were all up. While Community Health Systems is a Zacks Rank #2 (Buy) stock, you can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. The Zacks-categorized Medical-Hospitals industry, which had underperformed the S&P 500 post-election, has picked pace so far this year with the industry gaining 16.9% compared to the S&P 500 gain of 4.6%.
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Obamacare Replacement Bill Pulled: Hospital Stocks Rally
President Donald Trump and Republican party leaders suffered a setback with a healthcare bill to repeal and replace Obamacare (Affordable Care Act, or ACA) being pulled from the House floor on Friday when it became clear that there would not be enough votes to pass the bill. The House was initially scheduled to vote on the American Healthcare Act (AHCA) on Thursday but the vote was postponed amid concerns regarding the bill garnering enough support. However, even after a lot of discussion and negotiations, it became clear on Friday that the bill would not get enough support.
What Went Wrong?
All throughout his election campaign, President Trump had said that his first course of action, once elected, for Obamacare would be to ask Congress to repeal it immediately.
However, the AHCA failed to get enough support with opposition from both conservative as well as moderate lawmakers. Many are of the view that the AHCA did not fully address the issues associated with Obamacare.
For others, a key concern was that with the new health care act, a large number of Americans would lose coverage. This concern was further supported by a report issued by the Congressional Budget Office last week. According to the report, if the new act were to go through, 14 million people would be uninsured in 2018 with the number expected to increase to 21 million in 2020 and 24 million in 2026.
Moreover, according to a Quinnipiac University national poll released last week, only 17% American voters were in favor of the Republican health plan that would replace Obamacare with 56% against and 26% undecided.
Hospital Shares Rally
While the market remained jittery for a major part of last week due to the uncertainty surrounding the future of the healthcare act, hospital stocks, which were among the worst hit after election results were announced on Nov 8, rallied on the pulling of the healthcare bill. These stocks had benefited significantly under Obamacare given the rise in the number of people with health insurance coverage. Needless to say, these companies would have been among the worst affected had the new healthcare act got support, given the expected decline in insured people.
With the bill being pulled, hospital stocks like Tenet Healthcare Corp. (THC - Free Report) , up 7.4%), HCA Holdings, Inc. (HCA - Free Report) , up 3.5%), LifePoint Health, Inc. , up 3.5%), and Community Health Systems, Inc. (CYH - Free Report) , up 9.7%) were all up. While Community Health Systems is a Zacks Rank #2 (Buy) stock, you can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. The Zacks-categorized Medical-Hospitals industry, which had underperformed the S&P 500 post-election, has picked pace so far this year with the industry gaining 16.9% compared to the S&P 500 gain of 4.6%.
Zacks' Top 10 Stocks for 2017
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-hold tickers for the entirety of 2017?
Who wouldn't? Last year's market-beating Top 10 portfolio produced 5 double-digit winners. For example, oil and natural gas giant Pioneer Natural Resources and First Republic Bank racked up stellar gains of +44.9% and +44.3% respectively. Now a brand-new list for 2017 has been hand-picked from 4,400 companies covered by the Zacks Rank. See the 2017 Top 10 right now>>