President Obama wasn’t the only winner with the Supreme Court’s landmark health care decision Thursday. Hospitals and health care companies declared a major victory as investors on Wall Street sparked a rally in health-related stocks.
Stock prices for some of the country’s largest hospitals and public insurers shot up within hours of the high court’s 6-3 decision handed down Thursday morning. Tenet Healthcare and Community Health Systems stocks surged, ending the day up over 12 percent. Insurance companies saw more modest gains as stock prices for UnitedHealth Group, Cigna and Aetna rose around 2 to 4 percent, while Humana surpassed all other insurers with 7.13 percent growth.
The gains were even more striking on an overall bearish day for U.S. equities, with the Dow Jones index, the S&P 500 and the Nasdaq losing ground.
The overall health care sector, which makes up about 15 percent of the S&P 500, rose 0.47 percent.
Analysts and industry players said the decision eases a major fear for investors and health executives — a lack of clarity and predictability on the prices, consumer demand and treatment standards.
“As a nation, this is terribly important,” Dr. Kenneth Davis, president and CEO of the Mount Sinai Health System, told Bloomberg TV. “The end of these subsidies would have been the death spiral for the exchanges in the majority of the states in the country.”
SEE ALSO: Health ruling relieves consumers; GOP states remain critical
The federal subsidies will give Americans wider access to health insurance, but many are still left out, according to Kev Coleman, head of research and data at HealthPocket, a consumer advocacy research group.
“The Supreme Court’s upholding on subsidies on the federal exchange is a relief to the millions of consumers who depend on these subsidies to afford ACA insurance coverage,” Mr. Coleman said. “However, the upholding of the subsidies still leaves millions facing the full cost of ACA health plans, plans that on average are dramatically more expensive than the pre-reform plans they replaced.”
A report released earlier this month by HealthPocket and co-authored by Mr. Coleman found that insurers plan to increase health premiums by an average of 12 percent in 2016. Customers receiving subsidies will not be heavily affected, but those paying full price for their plans will suffer the brunt of the premium increases.
The markets appeared to be more relieved that the health care industry had dodged a bullet because of the court’s refusal to block federally-run exchanges from paying out Obamacare subsidies.
If the court’s decision had gone the other way, experts predicted that nearly 6.4 million Americans would have lost the tax credits they received to help pay for their health plans. It was also estimated that 8.2 million people would have become uninsured and faced 35 percent higher premiums, according to a study by the Urban Institute.
Republicans floated a number of plans to address the shortfalls and revamp the nation’s health care system, but the uncertainty remained.
SEE ALSO: Supreme Court ruling shifts health care battle to 2016 presidential race
While health care companies are applauding the Court’s decision, they still say there is much about the law that needs improvement.
“The Supreme Court took clear action today to uphold the critical safety net that exchange tax credits provide millions of American families,” said Sandy Kennedy, president of the Retail Industry Leaders Association, in a statement. “Congress must now take bipartisan action to make much-needed and long-awaited structural changes to the ACA.”
Aetna, one of the largest health care providers in the U.S., also praised the ruling despite calling for additional changes to the law.
“Subsidies played a significant role in attracting the 6.4 million consumers who depended on subsidies to buy health care plans on the federally run health exchanges,” Aetna said on its website. “This decision ensures that their health care benefits will not be disrupted.”
But ’we believe that reform of the ACA is still needed,” the statement added.
• Brennan Weiss can be reached at bweiss@washingtontimes.com.
Please read our comment policy before commenting.