With a Democrat now elected to the White House and the economy remaining on slippery ground, one fund manager recommends investing in the nation’s largest health-care company as a defensive play against a tough economy.

Adrian Bachman, portfolio manager for the Arrow Alternative Solutions Fund (ASFFX), said his fund has been purchasing shares of health insurance giant WellPoint (WLP).

Bachman said WellPoint’s price-to-earnings ratio, cash flow, and other technical indicators make it one of the best investment plays within its industry.

This is especially in light of an economy most likely in a recession.

“Health care is considered one of the best defensive sectors,” Bachman said. “It’s not as cyclical as other sectors like technology or financial companies, but in a tough market, it’s a sector that many investors turn to.”

While WellPoint shares are down significantly so far this year -- more than 55% -- it has traded in the same range as its competitors. 

More importantly, WellPoint is cheaper than its competitors looking at price-to-earnings ratio and other technical indicators. WellPoint shares trade at 6.75 times earnings, while competitors Humana (HUM) trades at 8 times earnings and Aetna (AET) at 7.26 times earnings.

Bachman recommends WellPoint, and the health-care industry in general, because in a recession people will still need to go see a doctor. And with WellPoint being the nation’s largest participant in the BlueCross BlueShield health-insurance system, it should benefit as people continue to go to the doctor and visit the emergency room. 

There's also the long-term story of an aging Baby Boomer population.

Secondarily, because of the election of President-elect Barack Obama and now a larger Democratic majority in Congress, Bachman believes that managed-care providers stand to benefit from a political push for universal health care.

One large promise President-elect Obama made while on the campaign trail is to massively reduce the number of uninsured families. More importantly, one policy push is to get health insurance companies to accept people with a wider variety of pre-existing medical conditions. That could translate into more customers for WellPoint and its competitors.

In order to get the insurance companies to take on these higher-risk customers, the government could provide subsidies.

“The new administration could be a huge boost for the insurance industry,” Bachman said.