- Mizuho's Sheryl Skolnick says the Trump administration's plan to end cost-sharing subsidies to health insurers will weigh on hospital operators saying Q4 and 2018 estimates are "likely too high" adding, "the effect of the order is likely to be profoundly destabilizing, disruptive and potentially materially damaging to hospitals and those exchange plans who are still required to offer benefits."
- She says the change could motivate (NYSE:HCA), the largest publicly traded hospital chain in the U.S., to go private while further tarnishing the credit quality of operators like Tenet Healthcare (NYSE:THC), Community Health Systems (NYSE:CYH) and Quorum Health (NYSE:QHC).
- Evercore ISI's Michael Newshel says Trump's executive order is "likely not the final word" on the issue since bipartisan talks to appropriate funds will probably be pushed forward and lawsuits should keep the money flowing. He also believes the move Is a "blow the market could ultimately absorb" since insurers have been exiting the market and have assumed the end of subsidies in their 2018 rate hikes.
- Leerink's Ana Gupte says the order is most bearish for Centene (NYSE:CNC) considering that ~15% of its earnings are through Obamacare exchanges.
- Source: Bloomberg
- Selected tickers: HUM AET CI MOH LPNT HQY UHS UNH
- Now read: Quorum Health Corporation (QHC) Presents At 2017 Wells Fargo (NYSE:WFC) Healthcare Conference - Slideshow
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