August 16, 2009: Today's Playbook On Health Insurance Stocks, Post- Public Option

In an astute political move, Health and Human Services Secretary Kathleen Sibelius on Sunday said that providing citizens with the option of government-run insurance is not essential to the Obama administration's overhaul of U.S. health care. Evidently, the administration has caved on this very important issue, leaving the door open for private health insurance companies to move forward with creative products and profits for shareholders. Of course the devil will be in the details, but at fist glance Team Obama will expand health using cooperatives similar to the public/private scheme in the domestic utility industry.

Here are potential winners for investors to explore. Beware using the insurance index ETFs as your vehicle, as the health care sub-sector is in play now, not all insurance stocks.

Aetna (AET) $28.28/$12.3b market cap/ 0.14%

American Independence Corp. (AMIC) $4.75/$40.4m market cap/0%

AMERIGROUP Corp. (AGP) $23.98/$4.3b market cap/0%

Amerisafe (AMSF) $16.83/$317m market cap/0%

Assurant, Inc. (AIZ) $28.20/$3.3b market cap/2.93%

CIGNA Corp. (CI) $28.82/$7.9b market cap/.14%

Coventry Health Care, Inc. (CVH) $22.60/$3.4b market cap/0%

Health Net, Inc. (HNT) $14.67/$1.5b market cap/0%

Humana, Inc. (HUM) $34.69/$5.9b market cap/0%

Molina Healthcare, Inc. (MOH) $19.90/$508m market cap/ 0%

Triple-S Management Corp. (GTS) $16.45/$335m market cap/0%

UnitedHealth Group, Inc. (UNH) $28.06/$32.6b market cap/0.11%

Universal American Corp. (UAM) $9.10/$702m market cap/0%

WellCare Health Plans, Inc. (WCG) $24.85/$1.0b market cap/0%

Well Point, Inc. (WLP) $52.10/$475m market cap/0%

I like Molina and Health Net as they provide extensive private and government managed health care services, which may be a sweet spot to be focused upon.

As we all know, things turn on a dime in politics. The "progressives" will go nuts without a public option, but it is apparent the country just will not sanction that approach. As Democratic Senator Kent Conrad said Sunday, "There are not the votes in the Senate for the public option.....To continue to chase that rabbit, I think, is a wasted effort."