Managed care stocks rally as health reform evolves

[The Straight Story]

Managed care stocks rally as health reform evolves


Health insurance stocks soared above broader indexes in trading Thursday, as investors appeared to be emboldened by health reform news coming out of Washington, D.C.

Hartford, Conn.-based Aetna Inc. ( AET - news - people ) and Philadelphia-based Cigna Corp. ( CI - news - people ) led a pack of large private health insurers that saw their stocks climb. In contrast, the Standard and Poor's 500 index fell nearly 2 percent.


Analysts who cover the managed care sector said they think investors have become reassured that private insurers may not have to compete against a government-run plan structured like Medicaid or Medicare.

President Barack Obama and many Democrats favor such a plan, which could compete with private insurers to enroll middle-class workers and their families. But a government-run plan has drawn Republican opposition, and insurers have said it would hurt them.

http://www.forbes.com/feeds/ap/2009/05/07/ap6394220.html