Shares of US health insurers and hospital operators fell on Friday after US president Donald Trump signed an executive order that weakened Obamacare by ending subsidies to healthcare providers that helped them insure lower-income individuals.
Shares in Molina Healthcare fell 4.3 per cent to $60.66, while those in Centene declined 5.2 per cent to $88.78. Both are managed care providers that have a significant exposure to Medicaid, the programme for low-income Americans.
Anthem shares slid 3 per cent to $184.10m, while Aetna shares slipped 1 per cent to $152.78 and shares in Magellan Health declined 2 per cent to $84.05
Meanwhile, shares in Tenet Healthcare declined 5.5 per cent to $13.11, shares in Community Health Systems were down by the same margin to $5.68 and HCA Healthcare shares were down 0.5 per cent to $74.02.
The move to scrap so called cost-sharing subsidies threatens to raise costs for newly insured individuals under President Obama’s Affordable Care Act and risks leaving more people without insurance. Some Republicans had criticised the subsidies, calling them “bailouts” for insurance companies.
The executive order came after Republicans repeatedly failed to repeal and replace the 2010 healthcare law dubbed Obamacara.
With Friday’s sell-off, the S&P 500 healthcare provider and services subindex was down 3.7 per cent for the week and poised for its worst week in a year.