Insurers posted major gains Wednesday as the stock market opened as investors’ fears over “Medicare for All” were allayed with former Vice President Joe Biden’s Super Tuesday performance.
Investors have long feared the ramifications of Sen. Bernie Sanders, I-Vt., securing the Democratic nomination for president due to Sanders’ push for a single-payer “Medicare for All” system that would abolish private insurance. But Biden, who favors installing a public option for the Affordable Care Act and has criticized “Medicare for All,” was winning in nine states out of 14 that voted on Super Tuesday and outpaced expectations.
At the time of publication, major insurers saw opening double-digit gains including UnitedHealth Group at 10%, Cigna at 11%, Anthem (13.7%) and Humana (12%).
Insurers such as Centene and Molina posted gains of 12% each.
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The XLV Health Care Select Sector Index that is comprised of healthcare companies in the S&P 500 was up by 3.6%.
Hospital stocks were also doing well. HCA Healthcare posted gains of 5.06%, Universal Health Services saw a 4.3% gain and Tenet Healthcare at 8.43%.
To be sure the nomination race remains far from over as Sanders won the California primary, which was the biggest prize in delegates. Sanders also won primaries in Utah, Vermont and Colorado while the Maine primary remains too close to call.
However, Biden’s performance in Super Tuesday was a “clear incremental positive for the managed care sector,” according to an analyst note from JP Morgan Chase.
“Yesterday’s assumption of a clear Sanders delegate plurality heading into a contest July Democratic convention is now quite in question, if not unlikely, given Biden’s new delegate lead,” the note said.
The markets overall have been down for the past week due to concerns about the growing spread of the coronavirus. But markets appear to be rebounding slightly as the Dow Jones Industrial Average was up by roughly 2% as of press time.