That would be a huge blow for uninsured patients.
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By Sy Mukherjee
March 27, 2017

Not every health sector is reacting positively to the GOP’s Obamacare repeal bill’s failure. But a quick glance at the stock market shows that there’s one unambiguous winner from the American Health Care Act’s (AHCA), aka Trumpcare’s, stunning demise in the House of Representatives last Friday: hospitals.

Some of the nation’s largest hospital networks saw their shares soar in early Monday trading after House Speaker Paul Ryan and Republican leadership pulled the AHCA at the behest of President Donald Trump. Tenet Healthcare (thc) is up 7%, HCA Holdings (hca) has spiked 5.5%, Community Health Systems has risen more than 4%, and rural care provider LifePoint Health is up more than 3%.

This shouldn’t come as much of a surprise. Multiple independent analyses had shown that the AHCA’s enactment would lead to widespread insurance coverage losses—to the tune of 24 million fewer insured Americans over the next decade relative to current law. That helped galvanize widespread opposition to the legislation from major medical industry groups like the American Medical Association (AMA) and the American Hospital Association (AHA), as well as advocacy organizations such as the AARP.

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Ratings agencies like Moody’s had also warned that the expected coverage losses under Trumpcare would hit hospital finances especially hard by swelling the ranks of patients who wouldn’t be able to pay for their medical treatment.

Broader health care indices and ETFs also rose modestly Monday, with the iShares Dow Jone Healthcare ETF up about 0.3% and the Health Care Select Sector SPDR ETF up about 0.2%.

Insurance company stocks were a bit of a different story, however. Health insurer giants like Anthem (antm), Aetna (aet), UnitedHealth (unh), and Cigna (ci) all fell anywhere from 0.5% to 1.1% Friday.

Although the main trade association representing firms like these, America’s Health Insurance Plans (AHIP), did not endorse the AHCA, it did contain some measures that would benefit the firms by repealing certain taxes and allowing insurers to provide less generous (and less costly) benefits to customers. And now that Obamacare remains the law of the land under a hostile White House and Congress, insurance companies may be feeling the pinch of uncertainty over what the future holds for Obamacare’s marketplaces.

Finally, biotech and pharmaceutical stocks rose modestly Monday, with broad index funds and biotech ETFs up about 0.7% and big cap companies like Pfizer (pfe), Amgen (amgn), Celgene (celg), and others up anywhere from 0.3% to 1.7%. This could, in part, be attributable to the fact that Republicans were considering repealing an Obamacare policy that requires individual and small group health plans to cover “essential benefits” including prescription drug coverage, which could have hit the industry’s bottom line.

But there is now also uncertainty over whether or not the Trump administration will be able to pursue comprehensive corporate tax reform, as the president had promised to big pharma CEOs during a January meeting. Repealing Obamacare and its various taxes was a major component of the GOP’s tax cut strategy.

The Dow Jones and NASDAQ composites were both down modestly early Monday.

This essay appears in today’s edition of the Fortune Brainstorm Health Daily. Get it delivered straight to your inbox.

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