Investing.com - TD Cowen says healthcare policy will take center stage as Democrats control Congress following the midterm elections, creating headline risk for most healthcare sectors except Medicaid and hospitals.
The firm says major reforms are unlikely to pass with Trump in the White House, though the midterm results and catalysts like the debt ceiling give Democrats leverage. Medium-sized policies such as rollbacks of Medicaid cuts or restoring ACA subsidies face an uphill battle.
TD Cowen notes newly elected progressives and many incumbent Democrats will view the election as a voter mandate for bold healthcare reform as part of their affordability strategy. Senator Wyden, who will chair the Senate Finance Committee, recently endorsed Senator Sanders' Medicare for All bill after being a holdout, signaling pressure on moderates to reimagine healthcare.
Other Democratic members worry about blowback from Medicare for All support and want to focus on restoring the ACA and Medicaid, building on IRA negotiation, reducing premiums and deductibles for employer-based coverage, and adding Medicare benefits. Members like AOC looking to run for president will likely be more measured in their healthcare positioning.
TD Cowen expects new Speaker of the House Jeffries to pursue a dual strategy supporting affordability with policies on cost, coverage, and corporate greed while framing congressional Republicans and the administration, especially RFK Jr., as dangerous to Americans' health. The firm anticipates more requests for information from Senate Finance, outputs from the AOC healthcare working group, and new position papers from Democratic think tanks.