Wells Fargo analyst Gary Lieberman has downgraded his rating for both Community Health Systems and HCA Holdings to 'market perform' from 'outperform,' saying the companies could be affected by the Supreme Court's decision to hear King v. Burwell, a circuit case related to federal insurance subsidies.
Lieberman's move is notable because analysts' views of hospital stocks have in recent months been overwhelmingly positive based on health reform and Medicaid expansion expectations. Lieberman also cut his CHS price target to $48 from $52 and his HCA target to $64 from $70.
Shares of CHS (Ticker: CYH) fell nearly 4 percent Wednesday to $46.85 and were down another percentage point Thursday. Shares of HCA (Ticker: HCA) dropped about 2 percent to $64.84 Wednesday are were down a little more Thursday.
The Tennessee Hospital Association is again teaming up with Enroll America, a national group that provides support services for people looking to sign up for health insurance through the federal marketplace. The open enrollment period starts on the 15th.
Middle Tennessee's hospital companies have some notable reform-driven tailwinds helping their bottom lines these days. Late last week, the Obama administration added another one when it said Pennsylvania will become the 27th state to expand Medicaid coverage to about 500,000 residents. That stands to benefit, among others, locally based Community Health Systems and LifePoint Hospitals. The former has been steadily building a Pennsylvania presence in recent years and now gets 12 percent of its revenues there. The latter is buying its way into Western Pennsylvania through its Duke LifePoint partnership.
SEE ALSO: Word from Gov. Bill Haslam last week that his administration plans to submit a Medicaid expansion plan this fall. For the record, Tennessee generates 7 percent of CHS' revenues and almost 11 percent of LifePoint's.
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