Hedge funds short healthcare providers as subsidies debate intensifies

By Nell Mackenzie LONDON, Dec 22 (Reuters) – Hedge funds last week sold more U.S. healthcare stocks than they bought for the first time in 14 weeks, Goldman Sachs said in a note on Friday, as expiring subsidies leave lawmakers scrambling to curb costs. About 24 million Americans buy health insurance through the Affordable Care Act, known as Obamacare after Democratic President Barack Obama. Subsidies boosted during the COVID pandemic expire on December 31 unless Congress acts, leaving users facing sharply higher costs. U.S. President Donald Trump said on Friday he wanted to meet health insurers in coming weeks to discuss ways to lower prices. Hedge funds finished the week net sellers of healthcare providers and services, pharmaceutical and biotech firms, Goldman said in a client note seen by Reuters on Monday. Life sciences and healthcare technology were the only sub-sectors with net purchases. Short bets outweighed long positions by more than eight to one, the bank said. Short positions anticipate price declines, while long bets expect gains. Healthcare holdings remain relatively high versus the past year and five-year averages, Goldman said. Rising healthcare costs and other consumer prices have fueled public discontent and could loom large at the 2026 midterm elections. House Republicans this week passed a Trump-backed bill to cut premiums for some while reducing subsidies and raising costs for others from January 2027, two months after voters go to the polls. In November, telehealth firm Him & Hers and scientific instrument maker Bruker were the top short picks among mid-sized U.S. stocks, according to Hazeltree, which tracks 700 asset managers and 15,000 stocks globally. Bruker and Him & Hers did not immediately respond to requests for comment. (Reporting by Nell Mackenzie. Editing by Amanda Cooper and Mark Potter)

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