HEALTHCARE shares rose yesterday as a bill to reform the health system passed a first critical test in the US Senate, without many of the provisions, such as a government-run health insurance option, that investors most feared would hurt profits.
The S&P Healthcare Index rose 1.4 per cent, while the Morgan Stanley Healthcare Payor stock index rose 3.6 per cent. The S&P Managed Health Care index rose 4.6 per cent.
“All in all, relative to the last version of health reform issued by the Senate, things have turned out pretty well for the health insurance industry,” said Carl McDonald, an analyst at Oppenheimer.
The original Senate bill taxed the health insurance industry a fixed $6.7bn (£4.2bn) a year. Under the new proposal, the health insurance industry would face a $2bn tax in 2011, with increases over time to $10bn in 2017.