During the recent market turmoil, three healthcare stocks have performed very well. Those stocks are deeply involved in the health insurance industry. They reacted positively after President Donald Trump’s “Liberation Day” press conference. However, this wasn’t because investors believed that tariffs would positively impact these firms. It was largely due to comments made by President Trump on key medical issues as well as other recent events relevant to these firms. President Trump said in the speech that he would not cut Medicare and Medicaid benefits. These programs are vital sources of revenue for these stocks.
Additionally, the United States Senate confirmed Mehmet Oz to lead the Centers for Medicare and Medicaid Services (CMS). Markets may have viewed this as positive due to Oz’s noncommittal attitude when it comes to cutting Medicare and Medicaid. Below are the details on the three stocks that have held relatively firm since the market-rattling tariff news.
Molina Healthcare: Trump's Medicaid Commitment Inspires Confidence
On Apr. 3, the day after Trump’s Liberation Day speech, shares of Molina Healthcare (NYSE: MOH) popped by over 7%. In the speech, the President reiterated his previous statements, asserting that he would not reduce Medicare and Medicaid benefits. In 2024, over 75% of Molina’s total revenue came from Medicaid premiums. For Medicare, the figure was nearly 14%. Seeing these programs go with no or minimal cuts is important for the company to maintain and grow revenues.
Molina said in its last earnings call that it believes any possible cuts to Medicaid will be minimal. The U.S. Senate has approved a budget reconciliation proposal. It suggests cutting up to $880 billion over the next ten years, targeting the committee that oversees Medicare and Medicaid. Republican lawmakers say cuts to Medicare and Medicaid will happen by reducing waste and fraud.
The Government Accountability Office estimates that in 2024, Medicare and Medicaid made more than $85 billion in improper payments. Eliminating this improper spending for the next ten years could achieve nearly all the $880 billion in savings Senate Republicans are aiming for. The focus will need to be on efficiency and accuracy if the administration hopes to do this, as the vast majority of these improper payments were not due to fraud. Overall, Molina's shares are up 3.6% since Trump’s speech as of the Apr. 7 close.
[content-module:TradingView|NYSE: MOH]Centene: Shares Stay in the Green During Mass Sell-Off
Shares of Centene (NYSE: CNC) also responded positively after Trump’s speech, rising nearly 6% on Apr. 3. This also marked the day that the Senate confirmed Mehmet Oz to run CMS. Oz has yet to give a clear answer on what he wants for the future of Medicaid, which Centene gets 51% of its total revenue from.
Oz previously said that he “cherishes” Medicaid but has avoided answering whether he would oppose cuts to the program. Overall, Oz has painted himself as a proponent of improving Medicaid and wants to make sure it is “viable at every level."
However, Trump’s rhetoric regarding the protection of Medicaid has become notably more supportive. On the campaign trail, he talked about protecting Medicare and Social Security but did not talk much about Medicaid. The President has now repeatedly said that he will not sign a bill that contains cuts to Medicaid benefits. Centene is up 1% since Trump’s speech as of the Apr. 7 close.
[content-module:TradingView|NYSE: CNC]UnitedHealth Group Shares Stand Strong, See Big Up Move Post Market on Apr. 7
Lastly, UnitedHealth Group (NYSE: UNH) shares rose by over 3% the day after Trump’s speech. Overall, the stock is up 0.3% in the three days afterward. The company doesn’t separate its revenues by healthcare programs. However, changes in Medicare and Medicaid policy significantly affect its business. Aftermarket news on Apr. 7 from CMS bolstered UnitedHealth’s recent returns. CMS announced that it would increase the amount it pays healthcare firms to administer Medicare Advantage plans by over 5% in 2026.
The higher reimbursement rate gives a direct boost to UnitedHealth’s expected revenues for the year. It’s a major upgrade from the Centers for Medicare and Medicaid Services’ (CMS) original proposal of just a 2.2% increase. UNH shares jumped nearly 6% in after-hours trading on the news as the change delivered a big, unexpected benefit to the company. UnitedHealth is the largest Medicare Advantage provider in the country, with over 3 million more enrollees than its closest competitor.
[content-module:TradingView|NYSE: UNH]Overall, these health insurance stocks have acted as a place of refuge amid the recent market chaos. Going forward, markets will keep a close eye on potential changes to CMS regarding these names.
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