Health-care stocks rally as Democrats take control of the US House


Health insurer stocks rallied Wednesday after Democrats took control of the U.S. House in Tuesday’s elections, buffering further attempts by the GOP to repeal or further weaken Obamacare.

The approval of Medicaid expansion referendum votesin Idaho, Nebraska and Utah were also seen a positive for insurers. The expansion would mean potentially thousands of poor Americans gaining access to health-care coverage.

Shares of UnitedHealth Group and Humana were up more than 4 percent in intraday trading Wednesday. Anthem‘s stock was soaring more than 5 percent.

More Americans with health coverage was also seen boding well for hospitals. Shares of of hospital stocks HCA Healthcare and Tenet Healthcare were higher midmorning Wednesday.

“Coverage won last night,” Benjamin Isgur, a director of the Health Research Institute, told CNBC. With Democrats taking control of the House, “there probably won’t be some major policy change in terms of the current health-care policy we have going in the system.”

Health care emerged as a key issue this year with 41 percent of voters saying it was their No. 1 concern in election, followed by immigration, the economy and gun control, according to an NBC News exit poll.

Democrats, who pushed a health-care message during midterms, flipped enough seats to take the House majority away from Republicans in Tuesday’s election. Republicans, however, are expected to keep control of the Senate and add seats.

Isgur expects Democrats taking the House likely will slow, but not stop, the Republican Party’s pursuit of their health-care agenda, which he said has focused on recasting the role of the federal government in the U.S. health industry.

President Donald Trump and the Republican Party have threatened to repeal the Affordable Care Act, better known as Obamacare, and GOP lawmakers have cited budget concerns due to increased enrollment in federal health programs.

Both Democrats and Republicans have pledged to bring down high health-care costs in the U.S. but are divided on how to do so.

Matt Borsch, health-care analyst at BMO Capital, said he expects a “mixed” outcome for Medicaid expansion. He said offsetting outcomes include the election of GOP governors in Florida and Georgia who are both against Medicaid expansion.

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