NEW YORK (Reuters) - The slumping U.S. healthcare stocks at the center of efforts to dismantle the Affordable Care Act are expected to stay volatile as Republican legislation heads into a vote on Thursday that could signal how protracted their battle to repeal the law will be.

Traders work on the floor of the New York Stock Exchange (NYSE) shortly after the opening bell in New York, U.S., March 21, 2017. REUTERS/Lucas Jackson

In the two weeks since Republicans unveiled their plan to overhaul the law, known as Obamacare, shares of hospital operators and Medicaid-focused health insurers have struggled - with some stocks falling more than 10 percent - due to concerns the benefits the companies gained from coverage expansion will diminish.

Investors and analysts expect more sharp moves in reaction to new developments with the bill as the process evolves, starting with Thursday’s expected vote on the legislation in the House of Representatives.

“They definitely are trading off of headlines and that’s mainly because the situation is very fluid currently,” said Mark D’Cruz, senior investment analyst at Key Private Bank in Cleveland.

D'Cruz manages investment strategies that hold shares of large diversified health insurer Aetna AET.N but no hospitals or smaller Medicaid insurers.

“I don’t think there’s much upside right now from trying to guess what the final outcome of the legislation will be,” D’Cruz said.

Hospital shares have slumped since House Republican leaders unveiled their Obamacare repeal plan on March 6. Shares of HCA Holdings HCA.N, by far the most valuable publicly traded hospital operator, have fallen about 7 percent while shares of Tenet Healthcare THC.N tumbled 22 percent.

Concerns about the stocks heightened after congressional researchers estimated 24 million people will lose healthcare by 2026, which could mean a return to massive unpaid patient bills for hospitals.

“Hospitals benefited dramatically from Obamacare, simply because all of a sudden they had more people with insurance and less bad debt expense,” said Scott Schermerhorn, chief investment officer with Granite Investment Advisors, which does not own hospitals. “And now it looks like it’s going the other way.”

The recent declines blunted momentum in hospital stocks, which had been rising to start 2017.

The enterprise values of hospital companies are generally around 6.5 times to 7 times their expected operating earnings, which is still above their historic low of about 6 times, according to Jefferies analyst Brian Tanquilut, suggesting the stocks could have more room to fall.

“A lot of investors are asking the question: Do I need to be in the hospital group right now when I know there’s going to be a lot of volatility?” Tanquilut said.

Shares of health insurers that specialize in managed care for the Medicaid program for low income Americans have also been pressured, with the legislation set to roll back an expansion of Medicaid.

Since the bill's introduction, shares of insurers Centene CNC.N and WellCare Health Plans WCG.N have declined about 4 percent each. Shares of Molina Healthcare MOH.N, which also issued disappointing financial results in mid February, have tumbled 11 percent.

Larger insurers, which derive a smaller portion of business from Medicaid, have seen less impact to their shares.

“On the insurer side, it’s a little bit more complicated,” said John Nolan, portfolio manager at WBB Asset Management, noting that he would avoid insurers with heavy Medicaid exposure.