Democrat candidate, U.S. President Joe Biden, and Republican candidate, former U.S. President Donald Trump, attend a debate ahead of the U.S. presidential election, in Atlanta, Georgia, U.S., June 27, 2024.One group of health insurance stocks appeared to be rallying on the notion President Joe Biden's poor debate performance would bring another term for former President Donald Trump.
RBC analyst Ben Hendrix chalks up the last night's debate dynamics for Friday's rally in Medicare Advantage stocks on the thesis that "a second Trump term would ease regulatory and reimbursement headwinds weighing on the managed care stocks, particularly the Medicare Advantage leaders" likeUnitedHealth and CVS popped more than 2% as of noon Eastern time. Humana gained more than 4%. All three names are down on a year-to-date basis, however.
These shares have faced pressure because of regulatory changes in reimbursement for Medicare Advantage at a time when medical costs among seniors have seen a resurgence.