President Donald Trump delivers remarks during a campaign rally in Bossier City, LA, November 14, 2019.
Tom Brenne | Reuters
Health-care stocks rose Friday after President Donald Trump discussed his administration’s new rule that will force hospitals to disclose the discounted prices they negotiate with insurers.
Insurers UnitedHealth, Cigna, Humana and Anthem were each moving to session highs in intraday trading Friday. Shares of hospitals HCA Healthcare, Tenet Healthcare and Community Health Systems were also higher. The XLV, an ETF that tracks the health-care industry’s biggest companies, was more than 1% higher.
The federal rule, set to be enacted in 2021, is expected to face legal challenges. It will require hospitals to post their standard charges for services, including the negotiated rates with insurers and the discounted price a hospital would accept directly from a patient who paid in cash, among other measures.
Speaking from the White House on Friday afternoon, Trump said his plan gives Americans “control over their health-care decisions.”
The stock reaction to Trump’s rule means hospitals and insurers “aren’t very afraid,” said Zeke Emanuel, a medical doctor and former White House health-care advisor.
Emanuel added that the $300-a-day penalty under the plan for hospitals that don’t comply with the rule is “not going to be very painful” for most.
The plan “may backfire in the worst way,” he said.
Hospital and insurance groups quickly criticized Trump’s plan, saying it was the wrong approach and it would do little to bring down health-care costs for consumers.
The American Hospital Association, an industry trade group, said later Friday it will join with member hospitals to file a legal challenge to the rule on grounds including that it exceeds the administration’s authority.
Trump’s plan comes as health care remains a top issue for voters ahead of the 2020 presidential election. Trump and Congress are also trying to pass legislation before the end of the year that would bring more transparency to health-care costs and, ultimately, lower costs for consumers.