NEW YORK (Reuters) – Shares of U.S. health insurers that have rebounded in the past two months could come under pressure this week as Democrats square off in their first presidential debates, with healthcare policy reform potentially high on the agenda.
Traders work on the floor at the New York Stock Exchange (NYSE) in New York, U.S., June 24, 2019. REUTERS/Brendan McDermid
Support for government-run “Medicare for All” plans from U.S. Senator Bernie Sanders and other left-leaning politicians and candidates shook the stocks earlier this year, and has contributed to the overall sector’s underperformance, despite the recent recovery.
The debates take place on Wednesday and Thursday in Florida – with 10 candidates taking part each night – as Democrats vie for their party’s nomination for president in 2020. Other debates are expected in July and later in the fall.
The stocks have also faced uncertainty because of changes proposed by the Trump administration involving how the industry uses drug discounts and policies regarding disclosure of hospital and physician pricing.
Of all healthcare companies, insurer stocks have “the most to win or lose” from the debates, said Martin Jarzebowski, sector head of healthcare for Federated Investors.
“They have already been hit the hardest when you looked at all of the different Medicare for All proposals,” Jarzebowski said.
With a variety of healthcare reform ideas – some more radical than others – clouding their prospects, health insurer stocks have lagged this year. The S&P 1500 managed care sub index is up barely over 1% in 2019. That trails a 7.5% rise for the