Medicaid expansion chatter boosts hospital stocks

Hospital stocks are finishing the week on a high note thanks to Medicaid expansion chatter in Virginia and Pennsylvania, says UBS analyst A.J. Rice. The firm says Community Health Systems has more than 11 percent exposure in Pennsylvania and LifePoint Hospitals gets nearly 13 percent of its revenues in Virginia.

Virginia Gov. Terry McAuliffe has made clear that expanding Medicaid is a top priority, but state Republicans are pushing back, MSNBC reports.

The governor insists he won't approve a budget without Medicaid expansion; Republicans insist they won't approve a budget with Medicaid expansion. It's pushed McAuliffe to try to get creative, though the details of his plan remain elusive.

Pennsylvania's shot at expansion seems a bit more likely, with three Republican House members joining with Democrats this week to vote in favor of expanding Medicaid. However, Gov. Tom Corbett does not support expansion, the Pittsburgh Post-Gazette reports, and has submitted a "Healthy PA" plan to the federal government in its stead.

Shares of CHS (Ticker: CYH) are up 8 percent this week to $45.12. Shares of LifePoint (Ticker: LPNT) are up 5 percent this week to $64.16.