EHSI: Health stocks gain after federal decision on payments

Emerging Healthcare Solutions, Inc. (Pinksheets:EHSI) voiced encouragement from the climb of healthcare stocks on Monday after a federal announcement on Medicare payment rates - helping offset any worries about a White House proposal to regulate premiums.

Late Friday, the Centers for Medicare & Medicaid Services, the federal agency that administers government-run medical insurance programs, announced an almost 1.4% increase for next year to a baseline rate for Medicare Advantage plans. The announcement follows a decision last year that brought lower-than-anticipated rates this year.

Shares of Humana (NYSE:HUM) and UnitedHealth Group (NYSE:UNH), two of the nation’s biggest providers of Medicare Advantage plans advanced with Humana gaining 5.6% and UnitedHealth climbing 3.6%. Shares of HealthSpring (NYSE:HS), which also generates significant top-line growth from Medicare plans, rose 3.3%.

Other healthcare stocks were up across the board Monday, appearing to be unfazed by the President’s latest healthcare proposals, including a goal to empower the US government to limit premium rate hikes by health insurers. WellPoint (NYSE: WLP), which the Obama administration has made an example of in its goal of pushing through reform plans rose 1.6%. The company is being scrutinized for planning rate hikes of up to 39% for hundreds of thousands of Anthem Blue Cross policyholders in California.

Experts will also be closely watching the only IPO offering this week, drug developer Anthera Pharmaceuticals, hoping to sell 4.6 million common shares for between $13 and $15 apiece. The success of the IPO is expected to be a good indicator of investor’s appetite for emerging medical companies in the coming months.