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 Shares of HCA Holdings <HCA.N>, the largest publicly traded hospital
operator, fell 3.2 percent, while Tenet Healthcare <THC.N> was off
4.8 percent and Community Health Systems <CYH.N> dropped 6.3
percent.
Top White House officials met moderate and conservative Republicans
in the U.S. House of Representatives on Monday in an effort to
revive a plan to repeal and replace the 2010 health law, commonly
called Obamacare.
Perhaps tempering pressure on the stocks, House Speaker Paul Ryan
said on Tuesday that Republican lawmakers are having productive
talks on a new healthcare reform bill, but it was too soon to say if
and when a new proposal would be put forth.
Hospital stocks surged late last month after House Republicans
pulled their health bill when it appeared the legislation lacked
enough support. But the stocks have now given up much of those
gains.
Investors have been concerned that a healthcare overhaul will
curtail benefits the hospitals have gained from expanded insurance
coverage under Obamacare.
In the options market, puts on Community Health, Tenet and HCA
traded at a faster-than-usual pace on Tuesday, as traders sought
protection against declines in the shares, according to data from
options analytics firm Trade Alert.
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Put options convey the right to sell shares at a fixed price in the
future.
Shares of Medicaid-focused health insurers also fell on Tuesday,
with Centene down 2.1 percent and Molina Healthcare down 2.4
percent.
Those stocks have been pressured by Republicans' plan to roll back
an expansion of the Medicaid health program for low-income
Americans.
(Additional reprting by Saqib Iqbal Ahmed; Editing by Nick Zieminski)
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