INDIANAPOLIS_Managed care stocks soared in a down market Monday, after the Obama administration downplayed a government-backed public health plan that many investors fear would hurt private health insurers.

The largest publicly traded managed care companies all saw their stocks rise about 3 percent or more while the broader Standard & Poor's 500 index fell 2 percent. In fact, the four top performing stocks in the S&P 500 were managed care companies.

Overall, nine of the 10 best percentage gainers in the S&P 500 through midday trading were managed care and health care-related stocks.

Over the weekend, President Obama called a public option for insurance coverage "just a sliver" of the overall proposal for healthcare reform. Obama's health and human services secretary, Kathleen Sebelius, also told CNN Sunday that a direct government role in a system intended to provide virtually universal coverage was "not the essential element."

Obama has touted the creation of a government-backed public health plan as part of a push to cover uninsured Americans and trim rising health care costs. He has said such an option would help keep private insurers honest.

But the president appears to be willing to compromise, BMO Capital Markets analyst Dave Shove said.


"That's a positive from the investor's point of view that he's not going to draw a line in the sand," Shove said.

Investors worry that a public plan will create unfair competition for private insurers.

Such a plan would come with lower administrative costs, and it would reimburse providers at rates below what private insurers pay. Morningstar analyst Matt Coffina said factors like that mean a public plan could offer premiums at 20 percent or more below what private plans could offer.

Nonprofit cooperatives, which have been mentioned as an alternative to the public plan, are seen as less of a competitive threat, Miller Tabak analyst Les Funtleyder said.

Analysts have talked for weeks about the government plan option fading in favor of cooperatives. Nevertheless, they say investors found reassurance in the administration's statements this weekend.

"It's been out there for a while that this was coming, but it's the first time you saw ... government officials en masse say it," Funtleyder said.

Bethesda, Md.-based Coventry Health Care Inc. rose 5.7 percent, or $1.28, to $23.88 in trading Monday; Hartford, Conn.-based Aetna Inc. rose 4.6 percent, or $1.30 to $29.58; Philadelphia-based Cigna Corp. rose more than 4 percent, or $1.26, to $30.08; Minnetonka, Minn.-based UnitedHealth Group Inc. climbed 3.5 percent, or 97 cents, to $29.03; Louisville, Ky.-based Humana Inc. was up 3.4 percent, or $1.17, to $35.86; and Indianapolis-based WellPoint Inc. rose nearly 3 percent, or $1.54, to $53.73.