United Health gains as healthcare reform doubts creep (UNH)

Posted in General, Options 
June 18th, 2009

United Healthcare (UNH) shares are up more than a point on stronger-than-usual volume for this time in the session, on speculation that President Obama will need to cede more ground to the private insurance system already in place in order to pass healthcare reform legislation.

In the options market, calls are outnumbering puts at a ratio of about 2.5-to-1, in what appears to be directional market bets by traders.

United Health is the opposite bet on an Obama healthcare plan. And on several fronts, the Obama plan is meeting new resistance.

For starters, the timing of any new federal insurance plan appears to have been pushed back. The Washington Post reports today that a bipartisan set of reforms proposed by the Senate Finance Committee could be delayed until after the July 4 Senate recess.

It also appears that Senate Democrats already are ceding some ground on key reform tenets. One idea that could gain bipartisan support is a proposal by Sen. Kent Conrad (D-N.D) to form insurance cooperatives that are fun by consumers, rather than the government.

Other healthcare stocks that might benefit from Obama plan alternatives include Humana, Wellpoint, Aetna, Cigna, Coventry Health and Healthnet.

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