Health care stocks steady off Affordable Care Act delay

11:18 AM, Jul 3, 2013   |    comments
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Matt Krantz and Brett Molina, USA TODAY

Health care stocks seem largely unfazed Wednesday after the Obama administration delayed a portion of the Affordable Care Act.

Shares of health insurance giants Aetna, UnitedHealth Group, Cigna and Wellpoint dropped modestly Wednesday, with Cigna showing the largest slide of 1.4%.

The White House has delayed a portion of the Affordable Care Act that would have required businesses with 50 or more employees to provide health insurance or face penalties.

Many businesses have been aggressively lobbying the White House for a delay, arguing that they needed more time to implement complicated requirements of the new law that is aimed at providing health care for uninsured Americans who don't get health care through their employers. The provisions would be halted until 2015.

America's Health Insurance Plans, a trade group representing health insurance companies, stated in a release, "We appreciate that the administration is being responsive to the concerns employers and insurers have raised about the workability of the reporting requirements related to employer health care coverage."

The postponed rule will have a "minimal" affect on managed care organizations in the near term, says Vishnu Lekraj, analyst at Morningstar. Already, a large number of companies with 50 or more employees already provide insurance to employees.

The delay gives the limited number of larger companies to "plan what strategy to execute and get a better sense for how the exchange market may actually work," Lekraj says. There could be growth in the mid-term for the insurers here.

The biggest decision for these companies would be deciding whether it make more sense to pay the penalty for not offering insurance or to sign up for a health insurance policy. Managed care organizations would benefit "if these larger employers choose the later option and commercial policies are usually more profitable than individual policies," he says.

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