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Politics can be an ugly business. Healthcare policies, especially so. Healthcare companies that are blended into politics? It was $ 28 billion worth of nasty on Tuesday, and stock market damage continued on Wednesday.
"Presidential primary politics," says Evercore ISI analyst Michael Newshel, is "more in focus than basics."
The slide began seriously on Tuesday when UnitedHealth Group Inc. – treated by investors as a bellwether for the insurance sector – entered the debate on "Medicare for All", which would extend government administration to most of the population and rewrite the business of US health insurance companies. hospital and doctors.
Although it is a longer picture to become law despite the support of some challengers to the democratic presidential election, the proposal has the ability to offset the company's stock prices. Together, the shares of hospitals and insurance companies lost $ 28 billion in market value on Tuesday, according to data prepared by Bloomberg. Tuesday's losses covered the worst five-day stretch since 2011 for health insurance companies, despite UnitedHealth's reporting revenue beating analysts' estimates and increasing the forecast for 2019.
The slide in hospitals and insurance stocks continued Wednesday, wiping out billions of dollars more In market value from some of them The largest health enterprises in the United States fell UnitedHealth 3 percent at 10:30 in New York. Its competitor Anthem Inc. was down 4.8 percent, and Cigna Corp went 3.1 percent. The hospital chain HCA Healthcare Inc. fell 2.5 percent, and Community Health Systems Inc. lost 7 percent.
For months, health insurance companies have largely ruled out the proposal to extend Medicare, the government program that covers about 60 million mainly elderly Americans. As UnitedHealth's CEO began wrapping up his remarks on Tuesday morning during the company's conversation with analysts, this changed.
The proposal would be a "wholesale disruption of American health care" and would "certainly have a major impact on the economy and jobs – all without fundamentally increasing access to care," said CEO Dave Wichmann on the conversation.
As a source of coverage UnitedHealth is almost as big as Medicare itself, providing health insurance services to 49.7 million people, and last year's revenue of $ 226.2 billion, along with insurance, operating physician practices, selling consulting and data services, and managing drug benefits. It also covers millions of people in private versions of Medicare and Medicaid.
While UnitedHealth had a low profile, there are signs that it had already become a target before Wichmann's comments Tuesday.
Last week Senator Bernie Sanders sent of Vermont, which is challenging for the democratic presidential election, discussed his support from Medicare for everyone at Fox New s Town Hall in Bethlehem, Pennsylvania, on Monday night. Fox anchor Bret Baier asked the audience for the incident to pick up their hands if they had private health insurance from an employer.
"Now, many are willing to go over to what the senator says, a state system? Baier asked the audience. There was cheers in the room when people raised their hands, and afterwards Sanders sent a clip from the incident, tweeting" lift your hand if you are tired of your private health insurance company. "
Last week, Sanders specifically called out UnitedHealth, saying in a April 12 tweet" your greed is going to end. "
Sanders specifically referred to Steve Nelson , CEO of UnitedHealthcare, the company's insurance department, Sanders quoted a Washington Post story of comments Nelson did at a corporate meeting.
According to the post, Nelson answered a question from an employee about the insurer's role in the political discussion and said: "It The last thing you want to do is become a poster child during the presidential campaign. "
A spokesman for the company said UnitedHealth has long supported the expansion of health care.
(An earlier version of this story corrected the name of Community Health Systems.)
– With help from Tatiana Darie.
For to contact journalists on this story: Drew Armstrong in New York at firstname.lastname@example.org; John Tozzi in New York at email@example.com
To contact the editors responsible for this story: Drew Armstrong at darmstrong17 @ bloomberg .net, Mark Schoifet
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