Health insurer stocks rise as Wall Street anticipates Republican victory in Mass.

"Health insurer shares rose on Tuesday, while hospital stocks fell as investors anticipated a Republican victory in the special Massachusetts election for a new U.S. senator that would throw healthcare reform into uncertainty," Reuters reports. "The Street prefers a simple narrative," said Les Funtleyder, a health care analyst with Miller Tabak. "The narrative is Coakley in Massachusetts is in trouble and therefore the healthcare reform bill is also in trouble" (Krauskopf, 1/19).

Market Watch: "[S]hares of Aetna Inc. and other large insurance companies rallied on thinking the close race further thwarts efforts at health reform." Matt Perry, a senior equities analyst at Wells Fargo Securities, said, "We still think that the Congress will pass a health-care reform bill in the next several weeks, but a Brown victory would increase the chances that health-care reform fails from the current level of 0-10% to 25-30%"

Goldman Sachs & Co. analyst Matthew Borsch said, "Investor comfort with the Senate-version of reform has increased significantly over the past three months." He "noted that managed-care stocks would likely rally the most in the event of a [Republican Scott] Brown win, followed by large-cap pharmaceuticals" (Gibson, 1/19).

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This article was reprinted from khn.org with permission from the Henry J. Kaiser Family Foundation. Kaiser Health News, an editorially independent news service, is a program of the Kaiser Family Foundation, a nonpartisan health care policy research organization unaffiliated with Kaiser Permanente.