News that Senator Max Baucus’ Finance Committee deal on health care financing excluded a public option sent health insurance stocks soaring Tuesday.
Shares of U.S. health insurers rose broadly on Tuesday on hopes a health reform bill would not include a government-run option, which has drawn strong opposition from insurers who fear it would destroy the private marketplace.
The S&P Managed Health Care index of large U.S. health insurers closed 6.5 percent higher.
Aetna rose 12.6 percent, Coventry was up 12.7 percent and Cigna was 7.7 percent higher, all on the New York Stock Exchange. Centene rose 7.9 percent.
Health insurance executives who have poured money into the campaign coffers of Blue Dogs, Max Baucus, Chuck Grassley, Kent Conrad, Joe Lieberman and Susan Collins (as well as their political action committees) likely made all their money back in the one day rise in stock prices. The companies themselves, which hold huge amounts of their own stock, surely recouped all of their PAC investments on Tuesday alone.
You don’t have to wonder whether Wall Street thinks Max Baucus’ deal is great news for the health insurance industry’s status quo: numbers like these don’t lie.