- Market Commentary -

March 23, 2010 (FinancialWire) (By Philip Holmes) — As expected, House Democrats passed the Senate-approved version of the health-care reform bill on Sunday night. Investors hit the ground running on Monday, boosting some big players, including hospital operators like Tenet Healthcare (NYSE: THC), while giving mixed reviews to insurers such as Aetna (NYSE: AET) and Wellpoint (NYSE: WLP).

Gains were led by hospital firms, including Community Health Systems (NYSE: CYH) (6.16% gain), and health insurers catering to Medicaid patients, such as Amerigroup (NYSE: AGP) (4.56% gain). But, overall, insurers saw mixed results. Wellpoint, for instance, ended the trading day down bit, at 1.05%.

It’s safe to say three things: that Monday's results may or may not prove the beginning of a trend, that it makes sense that hospital operators would see immediate gains, and that, overall, the market’s reaction to the bill passing was positive.

Without some kind of relief hospitals were facing a bleak future. The law required them to treat the uninsured, and the ranks of the uninsured have grown in the recession. Now, with ObamaCare passing, hospitals face immediate relief in the form of $940 billion in government assistance. Poorer people will have subsidized insurance policies, while individuals will be required to carry coverage.

Do we see a trend with insurers? Not likely. The mandates don’t kick in for four years, so you’d be going waaaay long to price in any increased revenues the mandates might achieve for insurers. Besides, there will be much wrangling over the mandates in coming election cycles.

[Go to http://www.financialwire.net/?s=philip+holmes to see more commentaries by Philip Holmes.]

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