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HEALTH-CARE STOCKS WERE mostly up in midday trading Monday in the wake of the House of Representatives' passage of historic health-care reform legislation

The S&P Health Care Index was up 0.45%, in midday trading, led by big gains from hospitals stocks. But drug makers and medical device makers were also up in midday trading.

All three health-care sectors have been viewed as winners under legislation which should add about 32 million Americans to the health-insurance rolls.

"Most of the industry wins from this legislation," says Les Funtleyder, a health-care strategist at Miller Tabak & Co.,"But circumspect investors realize that it will take time for the legislation's provisions to kick in. Individual company fundamentals are what will drive share performance."

Among the hospital companies, shares of Tenet Healthcare (THC) rose 7% to $6.15 a share, while Health Management Associates (HMA) rose 7.5% to $8.74 a share.

Medical device giant Medtronic (MDT) gained 2.9%, while St. Jude Medical (STJ), a competitor, rose 2.3% to $40.25 a share.

Health-insurance stocks, however, were mixed in trading due to worries about Medicare cuts that are part of the health-care reform legislation and increased regulations facing the industry.

Humana (HUM), one of the nation's largest providers of private Medicare health plans, fell about 1% to $49.45 a share while UnitedHealth Group (UNH) and WellPoint (WLP) also lost a bit of ground.

Aetna (AET) and Cigna (CI) rose slightly in morning market action. Aetna's share price climbed 26 cents a share to $34.72 a share, while Cigna's shares rose 12 cents to $37.20.

On Sunday night, the House adopted the Senate's health legislation on a dramatic 219-to-212 vote. A short while later, the House narrowly approved a companion bill making changes to the Senate legislation. Those changes now head to the Senate, where action is expected this week.

The legislation will extend health coverage to millions of Americans now without insurance, making it possible for them to pay their hospital bills, buy medications and pay for laboratory tests and medical devices.

It will mandate that almost every American carry health insurance, expanding the health insurance market. To help people get covered, the legislation provides subsidies to some families to buy insurance and expands Medicaid, the federal-state health program for the poor.

A popular provision requires insurance companies to accept all comers, even people who are already sick. And insurers will be required to sell their policies for individuals and small business in state-supervised marketplaces called exchanges.

The final legislation is far kinder to the health-care industry than many initially feared, a fact that fueled a rally in health-care stocks last week.

But the bill will actually have little impact on industry fundamentals anytime soon. The bulk of the bill's provisions will be implemented in 2014. And Republicans have vowed to repeal the legislation if they regain control of Congress during the mid-term elections in November.

Meanwhile, unemployment remains a big concern for health-care companies, especially hospitals laboring to reduce bad debt.

Still, health-care stocks remain cheap, trading at just over 12 times forward earnings. And Legg Mason fund manager Bill Miller told Reuters that he sees cheap health-care stocks performing well in the coming months.

Shares of Merck & Co. (MRK) rose 2.1% to $38.90 a share, while drug giant Pfizer (PFE) climbed 1.8%.

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