Investing.com - The Trump Administration wants the entire Affordable Care Act (also known as Obamacare) declared unconstitutional and Cigna (NYSE:CI) shares fell back Tuesday as a result.
The shares were down 1.8% Tuesday afternoon and hit a 52-week low of $160.37. The shares are off 29% since peaking on Dec. 3 and down more than 15% this year.
The administration's position came in a letter sent to the Fifth Circuit Court of Appeals. The court is hearing an appeal of a Texas court decision that declared the entire ACA unconstitutional.
The administration told the appeals court that “it is not urging that any portion of the district court’s judgment be reversed,” the New York Times reported.
Health-insurance stocks generally were lower on Tuesday.
UnitedHealth Group (NYSE:UNH), off 1.6%, was the worst performer among the 30 stocks in the Dow Jones Industrial Average, and Molina Healthcare (NYSE:MOH) was off 9.5%.
Critics of the Administration's current position, who include the health-insurance industry, say gutting the ACA entirely will take away insurance coverage from as many as 100 million Americans and cause chaos for consumers, healthcare providers and health-insurance companies.
The case will likely be appealed to the Supreme Court no matter who wins on the appeal. It will also likely be a political issue for the 2020 election.
Cigna earned $2.46 a share in the fourth quarter on revenue of $14.3 billion. Both beat estimates from analysts polled by Investing.com. The stock has been weak since December in part because of the uncertainty created by the Texas ACA decision.
Cigna will be spending much of this year digesting its $67-billion acquisition pharmacy benefit manager Express Scripts (NASDAQ:ESRX).
Its 2019 results won't be comparable to 2018 because the Express Scripts deal. The current Investing.com consensus is earnings of $3.76 a share on revenue of $34.1 billion.
The Express Scripts deal is part of an industry trend for health insurers and pharmacy management operations to combine in hopes of cutting prices. But the deals will also intensify competition. United Health, which owns Optum Rx and drugstore chain CVS Health (NYSE:CVS)) bought Aetna (NYSE:AET) in a $70 billion deal in late 2018.