Changes to Obamacare will impact hospital stocks

Trump's changes to Obamacare will impact shares of hospitals because of the expected spike in uninsured patients.

WASHINGTON (REUTERS) - President Donald Trump backed away from a bipartisan deal reached by Republican Senator Lamar Alexander and Democratic Senator Patty Murray. That deal aims to stabilise Obamacare by restoring subsidies to health insurers.

Trump wrote in a tweet: "I am supportive of Lamar as a person & also of the process, but I can never support bailing out ins co's who have made a fortune w/ O'Care."

His decision comes one day after he had signalled his support for the plan. That boosted insurers' stocks, with United Health, Anthem, and Aetna taking the lead.

They did not come down after Trump changed his mind.

However, hospital stocks, such as Tenet and Select Medical Holding, traded lower.

Also falling are shares of drugmakers Pfizer, Johnson & Johnson, and Eli Lilly.

"I think bigger impact will be on the healthcare facilities, the hospitals. If the premiums raise because the healthier, younger patients start signing up for the loser-cost plans, it will result in high level of uninsured patients. And that will impact the hospitals because, you know, they're gonna have more uninsured patients walking through their doors," analyst CFRA Research Jeffrey Loo said.

Last week, healthcare stocks fell after Trump said he would end funding of Obamacare subsidies for people with incomes below the federal poverty level.