Small-cap eHealth (EHTH) already has seen substantial political-induced volatility. EHTH stock went from $15 at the beginning of 2013 to $60+ less than a year later on optimism that it would profit from the exchanges created by the Affordable Care Act (colloquially known as “Obamacare”).
By the end of 2014, however, EHTH was at $10, as a buggy rollout and weaker-than-expected demand hit earnings and optimism toward the stock. EHTH has climbed nicely since then, however: the stock has more than doubled in 2018. It will need political help to stay at these levels.
A federal judge has struck down the ACA, bringing uncertainty to the market. Democratic wins in the House likely suggest the status quo will be roughly maintained, but disorder runs the risk of impacting eHealth’s individual and family plans business.
That business admittedly is shrinking, though still profitable. But even the growing Medicare business needs government help. And if there are any notable changes in expectations, perhaps increasing belief that a Democrat will win in 2020, that uncertainty could lead EHTH on yet another roller-coaster ride.