Most major health care stocks were lower on Monday, continuing their descent since the White House confirmed last week that it would halt federal payments for cost-sharing reduction (CSR) payments to health insurers.
Centene Corp. (NYSE:CNC), Molina Healthcare (NYSE:MOH) and Anthem Inc. (NYSE:ANTM) all fell while the weakness spilled over into other health care providers. Unfortunately, for investors and these health care companies, there will be years of uncertainty as the current administration “seeks to develop new, conservative minded policies,” George Huang, director of research & economics at Wells Fargo, told FOX Business.
Huang, a senior analyst covering the not-for-profit health care sector, went on to say: “The health care sector continues to be buffeted by changing policy winds from Washington, D.C. Though not-for-profit hospitals are caught in the middle, there should be some time to adjust to changes ahead of policy implementation. Investors, however, should remain prepared for a sustained period of health care reform related uncertainty.”
He added that risk overhang is likely to linger for at least the next few years.
Last Friday, New York Attorney General Eric Schneiderman announced a new multistate lawsuit to protect the CSR subsidies.