The first order of business for the new president and congress in 2009 will be renewing SCHIP, the children’s health program, Credit Suisse notes.
Stocks likely to benefit: Amerigroup (AGP), Centene (CNC), Molina Healthcare (MOH) and Wellcare Health Plans (WCG), which all provide managed care services to Medicaid and SCHIP beneficiaries. Charts for these stocks are here.
Also, congress will deal with a law that would cut by 21% payments to
physicians serving Medicare beneficiaries. The most likely solution
will take money out of Medicare Advantage, which contracts with HMOs to
serve Medicare beneficiaries. This will hurt Coventry (CVH), Humana
(HUM), UnitedHealth Group (UNH) and Wellpoint (WLP). Charts are here.
Full Disclosure: I don’t own any of these stocks. This post first appeared on Johnson’s "The Business Word."
I guess Congress renews SCHIP but the deficit picture is going to be brutally ugly. My bet when the dust settles that the deficit will be north of $1 trillion given how the bank equities are being priced. Democrats will probably pick up SCHIP but the til is empty and we are going into a brutal recession with little-to-no ammo except to print more money which is likely to have a nice boomerbang effect on inflation rates once the deflation finally abates.