The ruling was released Friday evening but still had a chilling effect on publicly traded healthcare organizations during Monday trading.
The Dow Jones Industrial Average (DJIA) and numerous healthcare stocks fell sharply on the first day of trading after a federal judge in Texas ruled that the Affordable Care Act (ACA) was unconstitutional.
The long-awaited ruling by U.S. District Judge Reed O'Connor on Friday evening sent shockwaves through the healthcare industry as executives, political leaders, and ACA enrollees speculate about the legal future of the landmark legislation.
Uncertainty surrounding potential federal appeals to the ruling also reverberated on Wall Street Monday, as publicly traded healthcare companies took the brunt of the damage and the DJIA fell by more than 500 points.
Related: Judge Rules ACA's Individual Mandate Unconstitutional, Declaring Entire Law Invalid
The largest slide during Monday trading was Community Health Systems, as the beleagured rural hospital operator saw its stock price drop by 13.65%. Following CHS' struggles were Quorum Health and Molina Healthcare, companies that both slid by more than 8.5%.
Texas-based hospital operator Tenet Healthcare dropped by 6.78%, while Teladoc, the telemedicine company, slipped by 6.41% on the same day that its CFO and COO announced their resignations at year's end.
Related: ACA Exchanges 'Still Open for Business' Despite Dramatic Ruling
Not all healthcare organization stock prices fell Monday, however, as WellCare rose by 0.13% and Humana finished up 1.12%.
How healthcare companies fared:
- Centene slid by 4.79%
- Cigna dropped 3.24%
- Anthem finished down 3.20%
- HCA fell by 2.86%
- Encompass Health Corporation dropped 2.73%
- UnitedHealth Group dipped by 2.61%
- DaVita slid by 2.26%
- Magellan ended down 2.24%
- UHS fell by 2.17%
- CVS dropped 1.67%
- Express Scripts finished down 1.55%
Related: 'The Judge Got It Wrong': Payers, Providers Pan ACA Ruling
Jack O'Brien is the Content Team Lead and Finance Editor at HealthLeaders, an HCPro brand.
KEY TAKEAWAYS
Payers and providers suffered on Wall Street in the first day of trading after a federal judge in Texas ruled the ACA is unconstitutional.
Though the ruling was a declaratory judgment instead of an injunction, the markets reacted negatively to the news.
Not all companies suffered losses on Monday, both WellCare and Humana were up by market close.