Major for-profit hospital operators' stock prices dropped Thursday after a federal judge ruled the Obama administration has been improperly funding cost-sharing subsidies under the Affordable Care Act.
Franklin, Tenn.-based Community Health Systems' share price fell 11 percent to $12.56 at the New York close Thursday, according to Bloomberg. Dallas-based Tenet Healthcare and Nashville, Tenn.-based HCA Holdings were also down, with share prices falling 9.8 percent and 3.2 percent, respectively.
The ruling was made in a challenge to the Obama administration's implementation of the ACA. House Republicans argued the administration overstepped its powers when it began paying health insurers billions of dollars to reduce co-payments for lower-income Americans and families. U.S. District Court Judge Rosemary M. Collyer agreed with the House GOP. She held that Congress never appropriated funds for the cost-sharing subsidy program.
The ruling, if it stands, could discourage patients from purchasing health insurance, which would take a toll on hospital finances.
The ruling also negatively impacted major health insurers' stock prices, as shares of Aetna were down 3.06 percent and shares of Anthem dropped 2.82 percent in afternoon trading Thursday.
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