Healthcare stocks were hammered Tuesday after the Senate passed President Donald Trump’s sweeping “One Big Beautiful Bill,” sending shockwaves through the sector amid concerns over deep federal spending cuts and structural changes to public healthcare programs.
Leading the declines were Molina Healthcare (MOH), which plunged 22%, Oscar Health (OSCR), down 18.7%, and Elevance Health (formerly Anthem), which dropped 11%. The sell-off followed investor fears that major provisions in the bill — including an estimated $930 billion cut to Medicaid and $230 billion reduction in Affordable Care Act (ACA) subsidies — will significantly reduce coverage and revenue streams for insurers heavily exposed to government-sponsored plans.
“This is a massive shake-up for companies tied to Medicaid and the ACA marketplace,” said one healthcare analyst. “The funding changes are both immediate and long-term, and the market is reacting accordingly.”
Molina, which has substantial exposure to Medicaid contracts, was hit hardest. Oscar, a newer insurer focused on individual ACA plans, saw a sharp decline as the bill threatens the core of its customer base. Elevance, with a broader business mix but notable Medicaid participation, also saw double-digit losses.
The bill introduces new eligibility requirements, including mandatory monthly work or community service hours for Medicaid recipients — measures that are expected to lead to widespread disenrollment. The Congressional Budget Office (CBO) estimates nearly 12 million Americans could lose coverage by 2034 due to the healthcare provisions.
Investor sentiment had already been shaky after Centene Corp., another Medicaid-heavy insurer, recently withdrew its guidance, citing unexpected spikes in medical costs and enrollment softness. That announcement, paired with Tuesday’s legislative news, triggered a broader sell-off in the sector.
“This is worse than the market expected,” said a healthcare investment strategist. “The bill passed without meaningful offsets for the insurance industry — and that’s showing up in share prices.”
Compounding market anxiety was the sudden resignation of two top CBS News executives who had opposed a separate legal settlement with President Trump, adding to a week of politically charged developments across corporate America.
While supporters of the legislation tout its tax cuts and fiscal savings, critics — including hospital associations and public health groups — warn the healthcare provisions could strain emergency services, increase uncompensated care costs, and leave vulnerable populations without coverage.
The bill now heads to the House of Representatives, where Freedom Caucus members have expressed concern but GOP leadership is pushing for swift passage ahead of the July 4 deadline.
As Wall Street recalibrates to a new reality for public health policy, analysts expect continued volatility in healthcare shares — especially those with Medicaid and ACA exposure.
