The healthcare sector is hurting after UnitedHealthcare Group's (UNH) comments rebuking sweeping healthcare reform.
"The wholesale disruption of American health care being discussed in some of these proposals would surely jeopardize the relationship people have with their doctors, destabilize the nation's health system, and limit the ability of clinicians to practice medicine at their best," CEO David Wichmann said on Tuesday morning. "The inherent cost burden would surely have a severe impact on the economy and jobs, all without fundamentally increasing access to care."
Shares of the healthcare giant have slumped on earnings day as the political risks have outweighed a solid print. However, it isn't the only sickly stock in its sector as the implications of the risks reverberate. CVS Health (CVS) , Humana (HUM) , Centene (CNC) , Cigna (CI) , WellCare (WCG) , and Anthem (ANTM) , among others, have been among the market's largest decliners. The S&P Managed Healthcare Index was down over 6% two hours from close.
The issue appears to be that by confronting the issue and citing its pitfalls, UNH management inadvertently gave the government option a great deal of free press.
"While earnings fundamentals for the MCO group remain strong, the Medicare-for-All overhang remains the dominant narrative," Evercore ISI analyst Michael Newshel lamented. "[UNH] stock's rebound on this morning's beat & raise was very short-lived, and the whole group turned over before the conference call concluded. Management faced a bit of a catch-22 on engaging Democrat's Medicare-for-All proposals on the call; they gave the right critique on system disruption and alternatives to universal coverage, but the attention itself elevates the issue in a sensitive market."
The attention has emboldened the "Medicare for All" plan's biggest proponents on Tuesday as well. Most notable of the presidential candidates calling for the program that concerns companies like UNH was Bernie Sanders.
Big surprise: the Trump administration is lying about Medicare for All to protect insurance industry profits. We debunked a few of their outrageous myths: pic.twitter.com/s6pBc9hS2k— Bernie Sanders (@BernieSanders) April 16, 2019
2020 candidate Cory Booker promised a similar platform to the one furthered by Sanders.
Sen. @CoryBooker: "I will fight for Medicare for All and I will start with lowering the age of Medicare eligibility and giving Americans a real public option." https://t.co/1WFIBV32oZ pic.twitter.com/QnfbUJIngO— The Hill (@thehill) April 13, 2019
Of course, the progressive wing of the Democratic party headlined by Alexandria Ocasio-Cortez has also been pushing hard for a single-payer healthcare option, in strong opposition to the Trump administration that has set about dismantling Obamacare. That angle has recently gained support from long-standing representatives as well.
Healthcare is a right, not a privilege. 9 years ago, we passed the #ACA to ensure every American has access to healthcare.April 12, 2019
The market appears to be worried that if these lawmakers get their wish, the insurers will be the first, and the hardest hit. With an election only about 18 months away, it will be a major issue for insurers and their investors to keep an eye on.