President Barack Obama's speech to Congress urging a health-care overhaul eased investor concerns that insurers will face competition from a government-sponsored health plan, helping move stocks a bit higher Thursday.

The president's address, however, wasn't necessarily cause for relief for the managed-care industry, as Obama called for changes that could be troubling for the industry, such as suggesting insurers should take on greater financial risks and provide more affordable plans at the same time.

Obama, in an address Wednesday to a joint session of Congress, advocated a public health-plan option while appearing willing to consider alternatives. He called the public insurance option "only one part of my plan" and "only a means" to the goal of making coverage available to those without it.

Before the speech, managed-care stocks rallied, with UnitedHealth Group Inc. (UNH) and WellPoint Inc. (WLP) hovering near their 52-week highs. The industry saw continued gains Thursday, and Citi analyst Charles Boorady expects shares to benefit further from higher member volumes as the passage of any health-coverage legislation this year should expand enrollment.

Obama's speech was hardly friendly to the managed-care industry, however, as the president said a public health plan would "keep pressure on private insurers to keep their policies affordable and treat their customers better," and avoid some of the "excessive" administrative costs and executive salaries of private companies.

Paul Keckley, a health-care economist and executive director of the Deloitte Center for Health Solutions, said in a memo that "the tone of the president's remarks was sharply critical of the insurance industry, more so than of any other sector in the current system."

Even without a public health option, health-care analyst Sheryl Skolnick, managing director at Pali Capital, sees troubles for managed-care companies in Obama's proposals. She noted he called for an end to annual and lifetime caps on the coverage people can receive and for limits on out-of-pocket expenses, while also demanding affordable options.

"And that combination ... I think is a near impossibility," she said. "I don't know how you build an actuarially sound model" with that kind of product. Eliminating coverage caps asks insurers to take on great risk, and they can bear that risk "only at an extremely high price." The Democrats, said Skolnick, want to tax the high-premium health plans.

"This is where the devil is in the details," the analyst said.

Because it appears Obama will not garner significant Republican support, the plan will be almost a purely Democratic one, and "that means that there will be these pretty significant insurance market reforms," Skolnick said. "He basically said insurance plans have to be forced to offer products that have open ended risks at low prices."

Obama called for charging insurance companies a fee for their most expensive policies, "which will encourage them to provide greater value for the money," he told Congress. That coincides with the Senate Finance Committee's draft framework for health-care legislation - one that analysts expect the overhaul to resemble - which calls for a $6 billion annual fee on the health insurance industry.

Hospitals, which earlier agreed to provide $155 billion in Medicare and Medicaid savings over 10 years, "appear to be unscathed in all of this," she said, and the proposals seem to be positive for pharmaceutical companies, as Obama aims to fill the gap in Medicare prescription coverage that forces many seniors to pay high out-of-pocket costs.

Despite the lingering concerns about the overhaul, most managed care stocks rose Thursday. Cigna Corp. (CI) recently traded up 4.3% to $30.68, while Health Net Inc. (HNT) rose 4% to $17.29. Humana Corp. (HUM) added 3% to $39.22, and other major health insurance stocks climbed between 1% and 2%.

-By Dinah Wisenberg Brin, Dow Jones Newswires; 215-656-8285;