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Hospital stock spike says Senate bill won’t pass: Cramer

June 24, 2017

The recent rally in hospital and HMO stocks means the Senate Republicans’ health-care bill will not pass, CNBC’s Jim Cramer said Friday.

“You can’t have both of those go up. It’s antithetical,” Cramer said on “ Squawk on the Street .” “That is like oil and water.”

Cramer spoke one day after health-care stocks posted sharp gains, with hospitals and insurers climbing, after the release of the Senate GOP health-care reform bill , which would replace the Affordable Care Act, better known as Obamacare .

HCA (HCA) rose as much as 3 percent, while Tenet Healthcare (THC) jumped 9 percent on an intraday basis Thursday. Aetna (AET), UnitedHealth (UNH), and Centene (CNC) also rose on the news.

Health care stocks pulled back Friday, but the sector was still on track to post a weekly gain of more than 3 percent.

The bill proposes phasing out Medicaid’s expansion program and capping Medicaid spending, repealing Obamacare taxes and restructuring subsidies to insurance customers.

Hospital stocks have been under pressure from the possibility of health-care reform because they have been more profitable under Obamacare, which the Congressional Budget Office said would result in 23 million more Americans with insurance over a decade than under the House GOP plan. The Senate version is expected to be scored as early as next week.

“I really feel that people have to recognize a vote to be able to cut back Medicaid, which is what this really is … is a vote to be able to lose your seat whether you’re in the Senate or the House. So, I think this rally was about how this thing’s dead,” Cramer added.


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