Market Overview

Height Capital Markets Picks Winners, Losers From Congressional Opioid Legislation

Height Capital Markets Picks Winners, Losers From Congressional Opioid Legislation

Opioid legislation recently passed in the House of Representatives includes a temporary lift on the ban on Medicaid funding for substance use disorder and the definition of eligible institutions for mental disease facilities, according to Height Capital Markets

The Thesis

The bill will temporarily repeal the IMD exclusion and require Medicaid issuers to rebate payments exceeding an 85-percent medical loss ratio, creating a "material tailwind" for inpatient behavioral health providers like Acadia Healthcare (NASDAQ: ACHC) and a material headwind for managed care organizations levered to Medicaid like Centene Corp (NYSE: CNC), Molina Healthcare, Inc. (NYSE: MOH) and WellCare Health Plans, Inc. (NYSE: WCG), the Height analysts said. 

This legislation will likely proceed at an expedited rate, according to Height Capital Markets.

"We expect the Senate will send final opioids legislation to President Donald Trump's desk this week, following the House's passage of H.R. 6 on Friday, Sept. 28 by a vote of 393-8. Included in the final legislation are policies that represent tailwinds for behavioral health providers and headwinds for Medicaid managed care issuers.”

According to data from the National Institute on Drug Abuse, between 8 and 12 percent of patients develop an opioid use disorder, accounting for 115 daily opioid overdoses in the U.S, Height said. 

Price Action

Centene was trading 0.69 percent at $145.78 at the time of publication Monday, while WellCare experienced a rise of 0.31 percent for a $321.49. share price. Acadia Healthcare Co. (NASDAQ: ACHA) was up 0.82 percent at $20.93 at the time of publicatioon Monday, while Molina was down 0.22 percent at $148.41.

Related Links:

22 Stocks To Watch After President Trump Declares Opioid Epidemic A National Health Emergency

Analyst: Opioid Legislation Likely Stalled In Senate Until After November Elections

Latest Ratings for CNC

Mar 2019MaintainsNeutralNeutral
Feb 2019Initiates Coverage OnOutperform
Jan 2019Initiates Coverage OnOverweight

View More Analyst Ratings for CNC
View the Latest Analyst Ratings

Posted-In: health care companies Height Capital Markets National Institute on Drug AbuseHealth Care Politics Analyst Ratings Media General


Related Articles (CNC + ACHC)

View Comments and Join the Discussion!

Latest Ratings

View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Trading Daily
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Thank You
for registering for Benzinga’s newsletters and alerts.
• The Daily Analysts Ratings email will be received daily between 7am and 10am.
• The Market in 5 Minutes email will be received daily between 7am and 8am.
• The Fintech Focus email will be received every Friday between 2pm and 5pm.

Mizuho Downgrades Lam Research, Western Digital, Remains Positive On Micron

Censorship, Regulation 'Pretty Big Concerns' For Alphabet, Says WSJ Reporter