Public Health Care Coming, But Stocks Trade Higher

A historic health care overhaul bill passed through the House late Sunday evening and is on the way to the White House for President Barack Obama for his signature which will put the improbable near-universal medical coverage action into law.

Despite the major changes promised from the measure, health care company stocks are mostly higher.

The Senate passed the bill with a 219-212 vote that saw not a single Republican vote in favor of the overhaul as coverage will now be extended to 32 million uninsured American, while insurance practices such as denying coverage to people with pre-existing conditions will be banned.

"We proved that this government – a government of the people and by the people – still works for the people," Obama said following the vote. "This is what change looks like, change we can believe in."

The GOP lawmakers are outraged by the bills passing as Minority Leader John Boehner, Republican-Ohio said, "We have failed to listen to America and we have failed to reflect the will of our constituents."

John McCain, Obama's GOP opposition in the 2008 presidential election, said that he is disgusted at what happened on Sunday evening while he and his fellow republicans have vowed to repeal the bill.

The reform on the health care industry will affect nearly every American on some level.

The Congressional Budget Office said the bill will cost $940 billion over the next 10 years, while adding that the legislation will cut the national deficit by $138 billion over that period. Most Americans will be required under the bill to purchase insurance, while allocations of the budget will be devoted to helping lower to middle class households to pay for the premiums.

The mandate to have purchased insurance will take effect in 2014, while an exemption will be in place for low-income Americans. Those who are uninsured by this time will be required to pay a fine.

A policy that will take effect this year will forbid insurance companies from placing lifetime dollar limits on policies, canceling policies if someone becomes sick and denying coverage to children because pre-existing conditions.

Additionally, parents will be allowed to keep children on their insurance until the age of 26 and uninsured people with high-risk medical conditions will be eligible for coverage before the program takes full effect before 2014.

The bill will expand the federal-state Medicaid insurance program to include childless adults for the first time starting in 2014, while also adding the 100 percent coverage of costs for newly eligible people through 2016.

Seniors will receive help in paying for prescription drugs as the "doughnut hole" coverage gap, which older Americans fall into once they have spent $2,830 under the Medicare prescription drug benefit. When the gap is closed completely in 2010, seniors will be responsible to pay 25 percent of the cost of medications.

Employers will not be required under the bill to offer coverage, but they will be hit with a fine if the government has to step in to subsidize the coverage. The fine will be $2,000 per employee and companies with 50 or fewer employees will be exempt from the requirement.

The proposal keeps the abortion provision that was included in the Senate bill that states that no health plan will be required to offer coverage for abortion. Exceptions would be made in cases of rape, incest and danger to the life of the mother.

The bill does not include many of the ideas proposed by the GOP lawmakers that Obama said would be considered for addition into the legislation. The one that did make it included an increase in payments to primary care physicians under Medicaid.

The news has wide-spread implications on a number of U.S. health care companies, but most sectors impacted by the measure are trading higher in early trading Monday.

In the hospital sector, Tenet Healthcare (NYSE: THC) is trading 6% higher, Lifepoint Hospitals Inc. (Nasdaq: LPNT) is 3.5% higher and Health Management Associates Inc. (NYSE: HMA) is 7% higher.

In branded drugs, Pfizer Inc. (NYSE: PFE) is 1.6% higher and Merck & Co. Inc. (MRK) is 1.9% higher.

In managed care, Aetna Inc. (NYSE: AET) is 1.2% higher and Unitedhealth Group, Inc. (NYSE: UNH) is flat.

In medical supplies and equipment, Stryker Corp. (NYSE: SYK) is 1% higher and Baxter is (NYSE: BAX) is 1% higher.

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