The rhetoric generates uncertainty, explains Joe Terranova and as a result I think the health care space is under-invested. Personally, I'd play it with a long position in Cigna (CI).

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.

I continue to believe that Wellpoint (WLP), UnitedHealth (UNH), Cigna (CI), Aetna (AET) and Humana (HUM) can be bought off this Senate shift.

In an Aug. 11 blog post, Cramer wrote:

"Even as Vince Farrell has correctly outlined the nutty House health care bill, it is obvious that the Senate will strike it down, so the managed care non-dip -- especially as Cigna filed to sell some securities last night -- makes a ton of sense to buy. WellPoint's moved a lot but it has an awful lot to gain from the "victory" that Obama's going to declare."

And on "Stop Trading!" that day, Cramer said that health care stocks such as Cigna, WellPoint and UnitedHealth "are doing well," which signaled that they wouldn't be hurt "nearly as badly as people thought."
-- Written by Rebecca Corvino in New York.

"Stop Trading," Aug. 11: Health care stocks such as UnitedHealth (UNH), Cigna (CI) and WellPoint (WLP) "are doing well," said Cramer, which is a signal that they are "not going to be hurt nearly as badly as people thought."

How could it suddenly dawn on holders of Cigna (CI), Aetna (AET), United Health (UNH) and Wellpoint (WLP) that they are PENOs instead of HMOs! That means Public Enemy No. 1, by the Anti-HMO-in-Chief Barack Obama. I have been telling people to sell these stocks endlessly because the president wants their business to be nonprofit, which is difficult if you are a public company.

He's destroying the margins of Aetna (AET) and Cigna (CI). These companies, particularly Humana, have this tremendous Medicare senior plans where they were just raking it in and were subsidized by the government.

It's health care that is most unexpected: anti-Obama health care, like Cigna (CI) and UnitedHealth (UNH) and Aetna (AET). These health care cost containers were supposed to be crushed by Obama because of their unfeeling, unthinking ways. The perspective Obama came in with would make you believe that the key issue for these companies is to ruin their margins. It also doesn't hurt that Tom Daschle got dinged, because he has a real socialist approach to medicine. With him out of the picture, the group has room to run.

Mad About Options: Test-Driving PACCAR: The Mad About Options crew reviews Jim Cramer's recent bullish comments about PACCAR and offers options strategies for traders and investors. Also hear options ideas for Aetna and Nordic American Tanker.
Click here to watch the video.

because I own a lot

not good business model

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