Health care stocks advance after Obama speech

SAN FRANCISCO – Health-insurer shares advanced Thursday after President Barack Obama laid out his proposals for health care reform in a speech that analysts said didn’t add any new dangers to managed-care companies’ bottom lines.

Obama talked about slapping new fees on pricey insurance plans and creating a government-run insurance option in front of a joint session of Congress on Wednesday night. But his speech was not a game changer because the concepts were not new, health care analysts said.

Shares of Cigna Corp. gained 5.6 percent, Humana Inc. added 3.9 percent, HealthNet Inc. advanced 5.4 percent and UnitedHealth Group Inc. rose 2.5 percent.

Humana reached a six-month high to close at $39.54.

“The plan for health care reform Obama introduced last night consisted of broad strokes,” said John Sullivan, analyst at Leerink Swann & Co., a health care equity research firm, in a note. “We’ve heard it all before.”

Other health care stocks, such as hospitals and drug companies, also rose.

Shares of Community Health Systems Inc. gained 4.1 percent, Tenet Healthcare Corp. added 6.3 percent and Pfizer Inc. increased 1.1 percent.

“We still expect benign signed reform legislation in 2009 and view such an outcome as good news for health care investors,” Sullivan said.

Benign legislation, in that view, would be one without a public option, one that calls for insurance cooperatives, or one that only offers a public option if other health care reform initiatives don’t drive down costs.

A bill in the Senate Finance Committee headed by Sen. Max Baucus, D-Mont., includes a cooperative, which would be a nonprofit, nongovernment plan run by program users. The committee plans to act on the bill next week. But Baucus has said in the past he doesn’t think a public option can pass the Senate.