Hospital and health insurer stocks leapt after Democrats won majorities in both chambers of Congress in the Nov. 3 midterm elections. A week after the Democrats’ swath of victories, hospital stocks have maintained this momentum, something that writer David Wainer said in The Wall Street Journal may continue with Democrats running Capitol Hill.
Democrats want to reverse HR1’s Medicaid cuts and restore the enhanced ACA subsidies Republicans allowed to falter, a key driver of the stock gains, according to the Journal.
Many Democrats also oppose the law’s curbs on state taxes on hospitals and the Medicaid supplemental payments they fund, with major changes beginning in 2028. Baird analyst Michael Ha estimates those arrangements account for 15% to 20% of Nashville, Tenn.-based HCA Healthcare’s earnings and an even larger share of King of Prussia, Pa.-based Universal Health Services’ earnings, the Journal reported.
Eight days after the midterms, hospital stocks are still performing well, with many having an initial spike Nov. 4, followed by a slight dip and maintaining better prices since the midterms.
Here is how hospital stocks have moved between Nov. 3’s close and Nov. 11, according to Yahoo Finance market data:
Universal Health Services: up 10.6%, down from a 12.1% post-election peak Nov. 5.
Dallas-based Tenet Healthcare: up 9.32%, down from 9.6% gain Nov. 4.
HCA Healthcare: up 8.7%, down from 10.3% gain Nov. 4.
Franklin, Tenn.-based Community Health Systems: up 5.4%, down from a 16.1% gain Nov. 4
Brentwood, Tenn.-based Ardent Health and Franklin, Tenn.-based Acadia Healthcare posted larger gains, rising 55% and 30.5%, respectively, after both beat third-quarter earnings expectations Nov. 4.
