Nov. 4 (Bloomberg) -- Cigna Corp. led a rally in health insurers after Republicans won elections for governor in New Jersey and Virginia, spurring speculation their victories will bolster opposition to Democrats’ plans to overhaul the industry.

The “elections will likely provide a ray of hope to managed care investors that some of the moderate Dems may start to push back harder against some of the most progressive elements of the reform bill (such as the public plan) or face risk of losing their Congressional seats in the 2010 mid-term elections,” Deutsche Bank AG analysts including Scott Fidel wrote in a note to clients today.

Health-care stocks in the Standard & Poor’s 500 Index rose 1.3 percent as a group, the most among 10 industries. Cigna climbed 5.2 percent, the most since Sept. 10, to $29.78 after New Jersey’s Jon Corzine and Virginia’s Creigh Deeds, both Democrats, lost to Christopher Christie and Bob McDonnell, respectively. Aetna Inc. rallied 5.2 percent to a five-week high of $28.01, while Coventry Health Care Inc. added 4.5 percent to a seven-week high of $21.74.

Proposed health-care legislation, intended to extend insurance coverage to tens of millions of Americans, has been delayed in Congress because of Republican opposition and a lack of unity among Democrats. Democrats are seeking an expansion of the Medicaid program for the poor and the creation of a government plan to compete against insurers.

U.S. Senate Majority Leader Harry Reid signaled that Congress may not send health-care legislation to President Barack Obama this year, fueling concern among some Democrats that the debate will continue into the 2010 election year.

“We’re not going to be bound by any timelines,” Reid told reporters in Washington yesterday after a closed-door meeting of all Senate Democrats.

To contact the reporter on this story: Lu Wang in New York at lwang8@bloomberg.net.

Last Updated: November 4, 2009 16:31 EST