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
Date | Firm | Action | From | To |
---|---|---|---|---|
Mar 2021 | Mizuho | Initiates Coverage On | Neutral | |
Jan 2021 | Jefferies | Downgrades | Buy | Hold |
Dec 2020 | SVB Leerink | Maintains | Outperform |
View More Analyst Ratings for CNC
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Posted-In: health care companies Height Capital Markets National Institute on Drug AbuseHealth Care Politics Analyst Ratings Media General