MW Trump gives a lift to healthcare stocks with comments on Medicare and Medicaid

By Ciara Linnane

President's cryptic 'America First drug prices' posting also lends support in a deeply negative market

Managed-care and healthcare stocks were higher in a deeply negative market Monday, buoyed by comments made late Friday by President Trump in support of Medicare, Medicaid and Social Security.

"We are going to love and cherish Social Security Medicare and Medicaid," Trump told reporters. "We are not going to do anything with that other than if we can find some abuse or waste we'd do something but the people won't be affected. It will only be more effective and better."

The comments put Trump at odds with Republicans who have discussed cutting back on Medicaid, in particular, to help fund tax cuts.

Raymond James analyst Chris Meekins noted that Trump has pledged to protect Social Security and Medicare throughout his campaign, but this was the first time he added Medicaid to the list.

"Trump was talking about this in the context of DOGE, and he did not reference the tax reconciliation package at all," Meekins wrote in a note to clients on Sunday. " Definitions of what is and what is not abuse (would state actions around state directed payments with exponential growth in recent years be considered abuse?) and waste is really in the eye of the beholder."

Raymond James is expecting Medicaid to remain a topic of sizeable cuts from Republicans in Congress, but the degree to which will come down to how much money they need to offset the impact of tax cuts.

"Medicaid is not likely to be the first thing targeted, but targeted it will be at least from a headline risk perspective," he wrote.

Trump also posted "America first drug prices," over the weekend without clarifying what that meant.

"We believe some investors got lulled into a false sense of security after the dinner with pharmaceutical executives at Mar-a-Lago with Trump in December," said the analyst. "Our view is that we hear more on most favored nation type policies this year, it is really just a question of when."

Molina Healthcare Inc. $(MOH.AU)$ led the gainers with a 2.2% rise, and was second-biggest gainer among S&P 500 companies.

Elevance Health Inc. (ELV) was up 0.8% and Centene Corp. $(CNC)$ was up 0.5%.

Drugmaker AbbVie Inc. $(ABBV)$ was up 3.2%, hospital operator HCA Healthcare Inc. $(HCA)$ was up 1% and drug company Gilead Sciences Inc. $(GILD)$ was up 1%.

The Dow Jones Industrial Average DJIA was down 628 points, or 1.4%, while the Nasdaq Composite $(COMP)$ was down 2.4% and the S&P 500 SPX was down 1.9%.

-Ciara Linnane

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February 03, 2025 10:36 ET (15:36 GMT)

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