Cigna and Aetna probably are the safest choices, because they get the lowest percentage of their revenue and profits from the two sectors most threatened by legislative reform: policies for individuals and small groups (meaning 50 or fewer people) and Medicare Advantage coverage, a privately administered alternative to traditional Medicare that covers 11 million seniors -- 25% of all Medicare participants. Cigna gets just 2% of its revenue from individual and small-group plans and Medicare Advantage, while Aetna gets 21%. Most of Aetna's business is with large companies, which either purchase coverage from the insurer or pay it to administer self-insurance programs. Cigna gets significant revenue from self-insurance plans, and it has sizable non-health-care businesses, including group life insurance and international operations.

Charles Boorady, a Citigroup analyst, favors Aetna and WellPoint, while Goldman Sachs' Matthew Borsch likes Cigna and UnitedHealth. "Health-care reform will result in faster spending growth on health care. Almost nothing is being done to control costs," Boorady says.

Boorady likes Aetna because of its low-risk business, and is partial to WellPoint because of a low valuation. WellPoint should net $3 billion after taxes around year's end from the sale of its pharmacy-benefit-management business to Express Scripts, and plans to use the bulk of the proceeds for share buybacks.

Borsch is wary of Humana because it gets about 70% of its profits from Medicare Advantage. Humana carries the lowest valuation in the group for this very reason. Borsch likes Cigna, which admittedly has a grab-bag of assets, because of its minimal exposure to at-risk insurance programs and its low valuation.

A problem with the stocks is that they pay little or no dividends. "The capital management of this industry has been nothing short of disgraceful," says Leon Cooperman, the chief executive of Omega Advisors, a New York investment firm that holds UnitedHealth and WellPoint shares. UnitedHealth's dividend is just 0.1%; WellPoint has none. These companies have wasted billions of dollars on aggressive share-repurchase programs at high prices, while management has cashed out options and sold stock. UnitedHealth, for instance, has bought back $15 billion of stock since 2005 at an average price of $42 a share, way above the current stock price. "The industry is in an uncertain environment because the Obama administration is hostile to it," Cooperman says. "So why are they buying back stock? They should return money to shareholders in dividends, and let shareholders decide what to do with the money." Cooperman says both UnitedHealth and WellPoint would appreciate 20% if they paid 40% of profits in dividends. At current share prices, a 40% payout ratio would result in 5% dividend yields. One of the arguments against high dividends is that they would play into the hands of political critics like House Speaker Nancy Pelosi, who has complained about the industry's "immoral profits." Cooperman opines that if this country has gotten to the point "that shareholders aren't entitled to a return on their investment, God help us all."