Sen. Bernie Sanders announced on Wednesday that he would be ending his presidential campaign.
The health care system is taking a beating as it prepares to deal with an increasing load of COVID-19 coronavirus cases, and, like the rest of the economy, health care stocks have tanked in recent weeks as profit forecasts and business outlooks get thrown out the window.
But today offered a sliver of good news for health care stocks: Bernie Sanders has dropped out of the presidential race.
"As I see the crisis gripping the nation, exacerbated by a President unwilling or unable to provide any kind of credible leadership, and the work that needs to be done to protect people in this most desperate hour, I cannot in good conscience continue to mount a campaign that cannot win, and which would interfere with the important work required of all of us in this difficult hour," Sanders said.
Shortly after the announcement, health care stocks were up 4.7 percent, according to Barron's–a not insignificant gain, given the current market. Shares of Cigna were up 3.8 percent, while Anthem and Humana jumped 6 percent and 4.5 percent. Sanders's lagging performance in the past weeks has also been bolstering stock prices, as it became more and more likely that he would not win the Democratic nomination.
In the early days of the Democratic presidential campaigns (When there were closer to two dozen candidates, not two), the popularity of Medicare for All or a single-payer system among voters and candidates served an ill omen for companies profiting off of our current health care model. Still, despite his withdrawal from the race, Sanders took the opportunity to once again voice his criticism of the current health care system.
"This current, horrific crisis we are now in has exposed for all to see how absurd our current, employer-based health insurance system is," Sanders said. "The current economic downturn we are experiencing has not only led to a massive loss of jobs but has also resulted in millions of Americans losing their health insurance."
Sanders's decision leaves former vice president Joe Biden the presumptive nominee and puts an end to the momentum of the Medicare for All movement.
"Bernie suspending his campaign will have many impacts on the general state of the 2020 elections but nowhere is it more evident than as it relates to health care in the U.S.," says Mick Rodgers, founder of Axial Benefits Group. "Its not like the high cost of prescription drugs, out of pockets in insurance premiums and uninsured are moving from the list of top concerns of most Americans, it's just that most tend to favor using the framework that's already in place, the Affordable Care Act."
Biden has repeatedly advocated for continued investment in and improvement upon the ACA, though even that strategy may have to be reevaluated as we await the Supreme Court to take up a challenge to the health care laws' constitutionality.
Rodgers hopes that the end of the Medicare for All movement (at least for now) does not decrease the sense of urgency about health care reform in the industry overall. "My hope is that the greater brokerage community doesn't rest on their laurels with this Medicare for all effort going away and miss the fact that an even bigger threat to our livelihood is in our already here and moving among us," he says. "Nontraditional health insurance competitors, such as Google, Apple, Amazon, all of who have invested millions (and billions in some cases) to establish themselves into this market place, also understand the tweaking the ACA framework will yield little and will most assuredly redouble their efforts to stake their claim in health care."
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Emily Payne
Emily Payne is director, content analytics for ALM's Business & Finance Markets and former managing editor for BenefitsPRO. A Wisconsin native, she has spent the past decade writing and editing for various athletic and fitness publications. She holds an English degree and Business certificate from the University of Wisconsin.
