UNH UnitedHealth Group Inc

By Anna Wilde Mathews 

Few companies had more at stake in this election than health insurers, which are at the center of the changes brought by the Affordable Care Act.

Donald Trump's victory leaves the industry with a huge question mark, which is likely to immediately weigh on shares of the companies. Many analysts think it is unlikely all of the ACA's effects would be truly undone, but the lack of clarity would likely pressure the industry. "A Trump victory just increases uncertainty, which the market doesn't like, " said Thomas Carroll, an analyst with Stifel Financial Corp.

Indeed, on Wednesday morning, analysts warned of a plunge in health-care stocks, including insurers but also among hospital companies. The near-term "impact and shock of the result will weigh on stocks across our coverage until we get greater clarity on agenda and details" around Mr. Trump's health-care policies, wrote Ralph Giacobbe, a Citi analyst. Writes analyst Ana Gupte of Leerink, "The unthinkable has happened."

Though Mr. Trump has committed to repeal the health law, he has been vague about how he would do so and what would replace it. Like other Republicans, he has endorsed policy ideas including selling health plans across state lines and increased use of health-savings accounts.

In a statement, America's Health Insurance Plans, the main lobbying group for the industry, said it would "work across the aisle -- with every policy maker and the new administration -- to find solutions that deliver affordable coverage and high-quality care for everyone."

The insurance industry's experience with the ACA has been a mixed bag, with upsides and downsides. If Mr. Trump somehow did away with the law's expansion of Medicaid, insurers could lose new enrollees they have gained and the prospect of further growth in that business from states that hadn't yet expanded their programs. A rollback of the Medicaid expansion would also be a blow to hospitals that have benefited from having more paying customers.

It isn't clear what would happen to the law's signature marketplaces and the widespread changes the ACA brought to the individual insurance business. Many insurers have lost money in the exchanges, and some major national players have pulled back from them for next year, including UnitedHealth Group Inc. and Aetna Inc. Others that retain major exchange footprints, including Anthem Inc., have said they need to see reforms to assure the marketplaces are sustainable.

The danger for insurers would be if Mr. Trump and Republicans retained some politically popular elements of the ACA, such as the requirements that insurers sell insurance to consumers regardless of their health conditions, while dumping those less appealing to voters, such as the penalties for those who lack insurance. That could accelerate the unraveling of the health marketplaces, though the earnings impact on insurers that already have largely withdrawn would obviously be limited.

Still, if Mr. Trump chooses to take a pragmatic stance, leaving parts of the ACA in place while easing some of its rules, the industry could benefit, said Chris Rigg, an analyst with Susquehanna Financial Group. "The political reality is much more nuanced than the market might initially think," he said. Analysts point to Republicans' traditional support for private companies' role in government health programs, particularly Medicare, as a possible silver lining for insurers.

Write to Anna Wilde Mathews at anna.mathews@wsj.com

(END) Dow Jones Newswires

November 09, 2016 09:19 ET (14:19 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.