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(Reuters) – An order by President Donald Trump that could scale back enforcement of some Obamacare provisions is unlikely to sink health insurance stocks, but shares of hospitals and Medicaid providers could be under pressure over fears more poor people would lose coverage, analysts said.

President Trump signed an executive order on Friday urging government departments to “waive, defer, grant exemptions from, or delay the implementation” of provisions of the Affordable Care Act, known as Obamacare, that imposed fiscal burdens on states, companies or individuals.

While the order lacked details, it signaled the start of an effort by Trump and Republicans to repeal and replace the program, which expanded health coverage to some 20 million people.

Obamacare has been plagued by increases in insurance premiums and deductibles and by some large insurers, including UnitedHealth Group Inc and Aetna Inc, largely pulling out of the system.

Shares of UnitedHealth and Aetna were little changed in early trading on Monday.

The equity markets dislike uncertainty and Trump’s executive order introduces at least a modest level of new uncertainty, J.P. Morgan analyst Gary Taylor wrote in a note on Monday.

The new administration may no longer enforce an Affordable Care Act rule requiring individual Americans to pay a penalty for not carrying health insurance, Kellyanne Conway, counselor to the president, said on ABC’s “This Week” program on Sunday.

The healthcare exchange system that is the cornerstone of the Affordable Care Act depends on premiums from healthy, younger individuals, typically between ages 18 to 34, to offset higher expenses for covering older, less healthy individuals.

The scrapping of enforcement was “a real risk” for 2017 insurance exchanges enrollment, Sheryl R. Skolnick, a healthcare analyst for Mizuho Securities USA Inc, said in a research note on Saturday.

“We have to wonder why the hospital companies and investors who have pushed the stocks back up to pre-election levels would be so enthusiastic,” Skolnick wrote.

But young people did not buy health insurance at desired levels, even when penalties increased for not having the coverage, said Ana Gupte, a healthcare services analyst for Leerink Partners LLC in New York.

“Fundamentally, I don’t think it’s going to make a difference,” if the so-called ‘individual mandate,’ requiring individuals to buy coverage or pay a penalty, is scrapped, said Gupte.

Some experts also question whether the Obama administration itself was vigilant about enforcing the rule.

“We’re not sure as to how vigorously it was being enforced anyway,” said Les Funtleyder, healthcare portfolio manager for E Squared Capital Management.

ACROSS STATE LINES

Still, Trump’s plans could pressure shares of insurers such as Molina Healthcare Inc, Centene Corp and WellCare Health Plans Inc, who administer state Medicaid plans, over concerns that the number of insured, especially among the poorest, would shrink.

Molina’s shares were down 0.7 percent, while Centene’s shares were down 0.5 percent.

If Medicaid funding becomes less than what states are receiving now, “it will put pressure on the number of people who are covered through Medicaid expansion,” Gupte said.

Hospitals may also be on the hook for more unpaid medical expenses as the number of uninsured individuals increase and seek emergency room treatment, Gupte added.

Longer term, though, the hospital industry is lobbying to get more money for unpaid expenses and “it looks like they will get what they want,” Gupte said.

Shares of hospital operators such as HCA Holdings Inc, Tenet Healthcare Corp and Community Health Systems Inc were down about 1 percent.

“In reality, the executive order is just a sideshow to the main event – the Repeal/Replace legislation that Republicans are expected to introduce this year,” Taylor said.

(Reporting by Suzanne Barlyn; Additional reporting by Ankur Banerjee; Editing by Peter Henderson and Randy Fabi)

IMAGE: President Donald Trump celebrates after inauguration ceremonies swearing him in as the 45th president of the United States on the West front of the U.S. Capitol in Washington, U.S., January 20, 2017. REUTERS/Carlos Barria/File Photo

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