Health care reform's long and winding road continues, as debate will begin soon on several bills in the House and Senate. Each chamber is likely to approve a bill, with the all-important conference committee set to reconcile the two after each chamber's vote.

Let's put on the old political science hat for a moment to see if history and research can tell us anything about the likely shape of the health care reform bill at this stage of the U.S. public policy process.

The House, Senate, and conference committee (CC) outcomes are labeled: Probable, Possible, Doubtful.

After discussing the status of health care with my three trusted economist friends and one equally-trusted public policy colleague, here is their employment advice for if health care reform doesn't pass and rein-in health care costs.

If health care reform doesn't pass, those citizens capable of doing so should consider becoming doctors, nurses, radiologists, surgical specialists, hospital technical support staff etc. -- i.e. consider almost any job/position in or affiliated with health care.

"Capital," Maxwell Emery (Hume Cronyn) said in the finance film Rollover (1981), "has a life of its own."

The market absolutists and conservatives who oppose health care reform are going to find out just how much havoc that capital force can generate in the years ahead, as it relates to health care costs.

Today was one of those days that was going to start out soft, but a key analyst upgrade saved the day. There was actually no early economic data, and traders are putting on their pre-earnings trades. Here is a quick look at the earnings previews for this week's key technology stocks and for this week's key financial stocks.

Here were today's unofficial closing bell levels:

Dow 8,313.92 +167.40 (2.05%)
S&P 500 901.05 +21.92 (2.49%)
Nasdaq 1,793.21 +37.18 (2.12%)

Top Analyst Calls

When my son had a huge boil under his arm, it turned out that it was filled with the killer staph, MRSA. It also turns out that my (otherwise) great doctor used a traditional lab to process the test, which took a week to determine it was MRSA.

Cepheid (NASDAQ: CPHD) manufactures the equipment and test that takes just two hours to do the same thing -- and is better and cheaper than traditional tests. CPHD wins 90%-plus of all competitive bids and its test could be available in low-tech facilities, such as doctor's offices or nursing homes, next year.

The big catalyst for this stock, however, is that Medicare will stop paying for all hospital-acquired infections except MRSA in October. So institutions need a quick test if they are going to be reimbursed for treatment.

The stock has fallen from $30 to under $9. It's worth $20 - $22 to an acquirer.

Your best strategy for life-changing profits?

Buy the call options.

Next: Biotech Stock #4

Humana (NYSE: HUM - option chain) stock is declining today after the company said preliminary 2010 Medicare Advantage payment rates could cause reduced profits in 2010. These comments from HUM are dragging down the entire group, including industry stalwart UnitedHealth Group (NYSE: UNH), which is off by upwards of 15%. If you think this stock won't be rising too far in the coming months, then it could be a good time to look at a bearish hedged play on HUM.

This morning, HUM opened at $36.70. So far today the stock has hit a low of $30.57 and a high of $36.86. As of 11:55, HUM is trading at $31.41, down $9.13 (-22.5%). Prior to today, the chart for HUM looked bullish, while S&P gives HUM a positive 4 STARS (out of 5) buy ranking.

Wellpoint (NYSE: WLP - option chain) stock is dropping today after the company announced it will suspend marketing of its Medicare plans for seniors while it corrects a number of compliance problems. If you think this stock won't be rising too far in the coming months, then it could be a good time to look at a bearish hedged play on WLP.

This morning, WLP opened at $37.40. So far today the stock has hit a low of $36.77 and a high of $39.45. As of 12:25, WLP is trading at $38.74, down $2.22 (-5.4%). The chart for WLP looks neutral and S&P gives WLP a neutral 3 STARS (out of 5) hold ranking.

For a bearish hedged play on this stock, I would consider a March bear-call credit spread above the $50 range. A bear-call credit spread is an options position that combines the purchase and sale of call options to hedge risk in case the stock doesn't do what you think but still leverages nice returns.

For this particular trade, we will make a 6.4% return in two months as long as WLP is below $50 at March expiration. Wellpoint would have to rise by more than 28% before we would start to lose money. Learn more about this type of trade here.

WLP hasn't been above $50 since September and shown resistance around $45 recently.

Brent Archer is an options analyst and writer at Investors Observer.

DISCLOSURE: Mr. Archer owns and/or controls diversified portfolios of long and short stock and option positions that may include holdings in companies he writes about. At publication time, Brent neither owns nor controls positions in WLP.

In this series, we take a look at the 25 stocks on the S&P 500 Index (SPX) that have turned in the worst performance during the past decade -- what went wrong, and what happens next.

Former hippies might notice that the ticker symbol for Tenet Healthcare Corporation (NYSE: THC) is also the acronym for the active compound in marijuana, but this apparent inattention to detail is likely the least of the company's concerns. When Tenet was formed in 1995, it was born out of a merger between American Medical International and scandal-plagued National Medical Enterprises. Executives at the newly reborn healthcare services company hoped that its new name would help erase any unpleasant investor associations with its previous incarnation.

What went wrong? At number 19 on our list of SPX losers, THC shed 73% of its value during the 10-year period ending June 30, 2008. Prior to a stomach-churning sell-off in the fall of 2002, the shares were entrenched in a near-vertical uptrend that peaked at $52.50. It seems that a seedy healthcare services company by any other name ...

October 2002 marked the stock's peak, as well as the beginning of its steep descent. First, the company reported fiscal first-quarter earnings that surpassed analysts' estimates by 2 cents per share. A few weeks later, Tenet was named co-defendant in a lawsuit filed by the widow of a man who'd accepted an artificial heart, which she alleged "stripped him of his human dignity." This relatively minor suit, worth just $100,000, wouldn't break THC -- but it nonetheless heralded the beginning of the end. Toward the end of the month, the shares tumbled sharply after an analyst downgraded Tenet and warned that it was too dependent on Medicare reimbursements from the government.

Baby Boomers, in some cases already facing the 'double demands' of caring for kids and aging parents, have another economic concern, at least for the next phase of the housing cycle: substantially lower household net worth, as a result of declining home prices, so says a Washington-based think tank.

The Center for Economic and Policy Research says the median households head by those ages 45-54 in 2009 will have about 25% less wealth than the similar demographic in 2004. In dollars, household wealth will decline to $113,268 from $150,113.

Further, the above assume March 2008's housing prices hold for 2009: if they don't and prices fall another 10%, household net worth declines by about 35%; 20%, by about 45%, the CEPR said.

Economist Peter Dawson, who is not affiliated with the CEPR or the study, told BloggingStocks part of the problem was "unreasonable expectations regarding home appreciation rates, the belief that 10-15% real estate gains would continue for decades. It got too many adults out of the traditional saving and investing mode and into thinking their home would serve as a major return on investment." Most homes do appreciate, and they can help build wealth, Dawson said, but homeowners must think in terms of a 6-9% average, annual appreciation rate, "which is a more-realistic return for residential dwellings."

UnitedHealth (NYSE: UNH) shares are in the red today even though a bill that would have reduced Medicare reimbursements to health insurers was defeated in the House of Representatives yesterday. However, shares of UNH are declining this morning with other insurers on news that Congress will likely pass a different bill with slightly smaller cuts next week. If you think this stock won't be rising too far in the coming months, then it could be a good time to look at a bearish hedged play on UNH.

After hitting a one-year high of $59.46 in December, the stock hit a one-year low of $31.49 in May. This morning, UNH opened at $30.30. So far today the stock has hit a low of $30.00 and a high of $30.88. As of 1:25, UNH is trading at $30.70, down 31 cents(-1.0%). The chart for UNH looks neutral and improving, while S&P gives the stock a neutral 3 Stars (out of 5) Hold rating.

For a bearish hedged play on this stock, I would consider a September .bear-call credit spread above the $35 range. A bear-call credit spread is an options position that combines the purchase and sale of call options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make a 9.9% return in three months as long as UNH is below $35 at September expiration. UNH would have to rise by more than 14% before we would start to lose money. Learn more about this type of trade here

UNH hasn't been above 35 since May and has shown resistance around $34.50 recently.

Brent Archer is an options analyst and writer at Investors Observer.

DISCLOSURE: Mr. Archer owns and/or controls diversified portfolios of long and short stock and option positions that may include holdings in companies he writes about. At publication time, Brent neither owns nor controls positions in UNH.

With a sluggish economy, uncertain job growth, the most serious housing recession in more than 20 years, record oil and gasoline prices, ramping food costs, and a foreign policy landscape that's challenging (to say the least), decision makers in the United States, public and private, have more than enough to be concerned about, near-term, most analysts and citizens would agree.

Still, the above wasn't enough to prevent the annual "alarm sounding" about long-term concerns, such as Social Security and Medicare, the likes of which occurred again this week when the Social Security Trustees released their revised 2008 actuarial balance, which is a status report.

Moreover, while it's never prudent to ignore the tax and benefits implications of entitlement programs as large as Social Security and Medicare, it's important that investors and taxpayers also keep in mind one undeniable reality pertaining to statistical analysis of this sort. Namely, that we're dealing with longitudinal projections stretching out decades in which -- if any one of 20 variables (or more) change -- receipts and outlays would change substantially.

While it comes as no surprise, both Medicare and Social Security are financial disasters waiting to happen. In a report issued today by trustees of these two large government programs, while the dates of bankruptcy are unchanged, the date of the programs being cash flow negative have moved up to a date closer than was previously thought.

According to an AP report: " The first year that payments will exceed income for Social Security will occur in 2017, just nine years from now, reflecting growing demands from the retirement of 78 million baby boomers. Medicare is projected to pay out more than it receives in income starting this year.

"The financial difficulties facing Social Security and Medicare pose enormous challenges," the trustees said in their report. "The sooner these challenges are addressed, the more varied and less disruptive their solutions can be."

American President George Bush announced his new budget spending plan today, and the package came out to a total of $3.1 trillion.

Today's federal budget proposal marks the first time in America's history that a budget plan has been in excess of $3 trillion. Bush claims that his budget is "good" and "solid" and that the passing of this budget will help keep the troubled American economy growing.

All in all, this budget looks to lift government spending by 6% during the fiscal year 2009, and it will probably come to no one's surprise that defense gets a nice little boost from today's budget. Bush is looking to allocate 8.2% of his spending on security, and the budget is looking to stake a $70 billion "placeholder" for war costs during 2009. The Pentagon should be pleased with its figures, as Bush is looking to allocate $515.4 billion its way... the highest allocation since WWII (and represents a 7.5% jump).

A recent ruling handed down by the Equal Employment Opportunity Commission has given employers discretion in using Medicare eligibility as a factor when calculating health care benefits for retired employees, as reported by Marketplace. The AARP had raised a stink about the issue claiming that having employers shift health care costs to Medicare when applicable amounted to age discrimination. My question is, if the level of care and benefits remains the same, who really cares from what direction the bills are paid? If employers carry the burden then we all see it in our bottom line. If the government pays for it, then we all see it in our tax load. The end effect to us as a society is basically the same.

This decision reaffirms in part exactly what Medicare was intended to do. The system has two major intents. First and foremost, Medicare is meant to fill the gap in cases where health care coverage is lacking. Secondly, Medicare is intended to help free the business world from the administration of benefits for people who no longer participate as an active part of their work force.

If the level of actual benefits is in no way reduced and the process of accessing those benefits is in no way hampered, then there's no room to gripe about employers shifting the burden. In fact, this kind of move is exactly what American business needs right now. However, if this decision in any way dilutes the benefits that hard working people have bargained their working careers for, then the AARP has an extremely valid argument and they desire to have that argument tested by the Supreme Court.

In a choppy/consolidating (or perhaps worse) market, discretion dictates that one looks for companies where the demographics are running in the company's favor. Health care services in the United States is one such sector, and in this category, Stryker Corp (NYSE: SYK) is worth an evaluation.

Stryker (NYSE: SYK) is a leading provider of artificial hip, prosthetic knee and trauma products.As one might sense, orthopedic implant demand is robust and looks to remain so in the immediate years ahead, and probably beyond. Not only because the U.S.'s population is aging, but also the population in key international markets.

Analysts see sustained, double-digit earnings growth driven by the above demand and by new product launches. Further, Stryker also has modest pricing power, and analysts also see market share gains in selected business segments. The Reuters F2007/F2008 EPS consensus estimates for SYK are $2.40/$2.88.

The risks? A negative change in Medicare reimbursement rates would hurt Stryker's results. The company also remains vulnerable to the emergence of a 'game changer' -- an innovative product launch by a competitor in one of its tech-intensive business lines.

The First Call mean rating for SYK is: Buy [22 firms]. Mean 2008 target: $82.00 [high: $90, low: $74].

Stock Analysis: Stryker is a moderate-risk stock not suitable for low-risk investors. Investors with an investment horizon longer than two years should be rewarded from SYK's shares. Sell / Stop Loss: $48.