March 14 (Reuters) - Shares of hospital stocks were sharply lower in early trading on Tuesday after the U.S. Congressional Budget Office forecast that 14 million Americans would lose medical insurance by next year under a Republican plan to dismantle Obamacare.
Shares of HCA Holdings fell 1.8 percent, Tenet Healthcare fell 4.6 percent, Community Health Systems was down 2.8 percent and LifePoint Health was down 1.9 percent.
The S&P 500 healthcare sector was off 0.16 percent.
"While the CBO's estimate... is a negative headline for hospitals, we believe that in its current form, the bill's chances of passing are slim," Jefferies analyst Brian Tanquilut said in a research note.
Tanquilut said he believed legislators "will eventually draft a more palatable, diluted version of 'repeal and replace' that would have a smaller impact on the number of uninsured."
The Affordable Care Act of 2010 expanded medical coverage, aiding hospitals by reducing the number of uninsured patients who could not pay bills. Hospital stocks sold off after the Nov. 8 presidential election of Donald Trump, who vowed to repeal former President Barack Obama's signature domestic policy legislation.
The CBO forecast that 24 million people would be uninsured in 2026 if the plan being considered by the House of Representatives were adopted. Some health policy experts and Wall Street analysts said the report was more draconian than expected, with the uninsured rate declining more quickly than foreseen.
Health insurer stocks also fell, though their moves were less steep.
UnitedHealth Group Inc was down 0.2 percent, Aetna Inc down 0.5 percent and Humana Inc down 0.1 percent.
Reporting by Megan Davies; Editing by Dan Grebler