JJC:   I spent last week telling you about the potential winners from the new Medicare bill... a bill the senate passed last night by a veto-proof margin last night, even though Bush... you know... he is saying he is going to veto it. It doesn't matter. If he chooses to veto it, the bill will come back to the house and the senate, and they will override the veto.

We are thrilled to see our favorite pick off the bill, Fresenius Medical (FMS), soar almost 4 points, $3.97, to a 52-week high today... as everyone, at last, figured out what we told you would happen last week... I mean, it's good to find a stock that goes up... that's the whole Cramer healthcare manual...

Tonight, I'm going to tell you about, though... different from these guys (bulls)... I'm going to give you the losers... the guys who have to be sold, sold, sold... right off the Medicare bill... Sell, sell, sell!...

These are all new inmates to the Sell Block...

The Medicare bill that the senate just passed is a $12.5 billion affair. We told you where that money is going last week. Now we are going to tell you where it's coming from...

That $12.5 billion will primarily be funded by a 2.5% cut to the Medicare managed care providers... the HMOs that sell Medicare advantage health plans... and the elimination of double payments to teaching hospitals.

These managed care companies get about 13% government subsidy... for each Medicare advantage plan... So, on the surface, a 2% cut probably doesn't seem like a big deal to you, right?... Certainly something the HMOs can absorb without feeling much pain... The problem for them is that this bill is a sign that the HMOs - which flourished under the protection of a republican president and a republican congress - have now lost their political protection as the democrats are now in control... in control of congress... and, possibly, the democrats will take control of the White House, come November...

So, even as I'm recommending that you buy healthcare stocks as part of the Marine Field Guide to Recessions, I am telling you to stay the heck away - Sell, sell, sell! - from the managed care companies, or HMOs, which are already down a lot. I don't care... they're going much lower...

Which are the worst?...

You go by the amount of exposure each has to Medicare...

So, for example, HealthSpring Inc. (HS), which gets 88% of its earnings from Medicare Advantage... that's in the Sell Block... Frankly, I'm putting that one in the Mad Money equivalent of Gitmo, because that percentage is so high... Let's waterboard these guys...

Humana Inc. (HUM) gets 80%... right into the Sell Block... Shawshank... no redemption.

Coventry Health Care Inc. (CVH)... 32% from Medicare Advantage. Sell it.

Health Net Inc. (HNT)... 28%... Sell it.

Triple-S Management Corp. (GTS)... 22%... Sell it.

Solitary confinement for all those players...

Unitedhealth Group, Inc. (UNH) only has 12%, but it's joining the Sell Block too, because that one is a serial killer of wealth... As a matter of fact, I'm giving it capital punishment. I'm not even giving it the needle... I'm giving it the chair...

Now let's talk unemployment...

Managed care companies are the ones businesses go to, when they're offering their employs a healthcare plan. The fewer people working, the fewer people there are to pay premiums to these companies... and we know from past experience that unemployment hurts these stocks... From 2000 to 2002, where the year-over-year monthly growth in unemployment was increasing double digits, the overall membership level of managed care companies declined... So, in other words, big correlation here... big workforce goes down, these companies declined by an average of 1.3% a year for three years...

That's about what you'd expect... More unemployment... fewer members for the companies that provide employees' health benefits.

These companies are coming out of a period from 2004-2006 where the membership levels were increasing on an average of 3% a year, because unemployment was declining on a monthly basis, in the high single digits...

Whoa, man... that party's over.

Here's the bottom line...

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