Sector Snap: Hospitals surge on health care ruling
NEW YORK (AP) — Shares of hospital operators jumped Thursday after the Supreme Court upheld the 2010 health care overhaul law.
In a highly anticipated decision, the court ruled the health care law is Constitutional by a 5-4 majority. The vote upheld almost the entire the law, including a provision that requires most people to have health insurance or pay a fine. The law is expected to help hospitals because they will see more patients and more bills will be covered by insurance.
President Obama signed the Patient Protection and Affordable Care Act in to law in March 2010 after a year of intense national debate. The law allows children to remain on their parents' insurance until the child turns 26, bars health insurers from dropping plan members who became ill, prohibits insurers from excluding children under 19 who had pre-existing health problems, requires insurer to spend certain percentages of their premium dollars on medical care, and authorizes the Food and Drug Administration to approve generic versions of biotech drugs.
Parts of the law are still being phased in. By 2014, health insurers will not be allowed to exclude people to people with pre-existing health problems or make them pay higher rates and people will be allowed to buy health insurance through exchanges.
In morning trading, shares of HCA Holdings Inc., the largest U.S. hospital chain, rose 1.89, or 7.1 percent, to $28.50. Shares of Community Health Systems Inc. gained $1.25, or 4.9 percent, to $26.74, and Tenet Healthcare Corp. stock added 30 cents, or 6 percent, to $5.28. Health Management Associates Inc. shares picked up 26 cents, or 3.8 percent, to $7.14, and LifePoint Hospitals Inc. rose $1.96, or 5.1 percent, to $40.43. Universal Health Services Inc. stock picked up $1.36, or 3.5 percent, to $40.61. Vanguard Health Systems Inc. shares edged up 4 cents to $8.28.
