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Illustration: Annelise Capossela/Axios

Conventional investor wisdom is to steer clear of next month's election, due to its inherent uncertainty and consequential volatility. But, this morning, Chamath Palihapitiya bet big on a company whose fortunes may be significantly impacted by the presidential victor.

Driving the news: Clover Health, a tech-enabled provider of Medicare Advantage plans, agreed to go public via a reverse merger with a Palihapitiya-led SPAC called Social Capital Hedosophia Holdings III (NYSE: IPOC).

  • The deal values Clover at around $3.7 billion, inclusive of a $400 million PIPE.
  • Clover had raised over $900 million in VC funding from firms like First Round Capital, Greenoaks Capital Partners, Sequoia Capital, and GV.

The politics: Both presidential candidates support Medicare Advantage, a program whereby private insurers provide extra benefits to seniors enrolled in Medicare (e.g., dental, vision, etc.).

  • The big difference, however, is that Joe Biden wants to lower the Medicare enrollment age from 65 to 60 — which could result in nearly 20 million more eligible Medicare Advantage customers.
  • He would, of course, need an amenable Congress.

Palihapitiya tells me that he struck the deal independent of politics.

  • "More than 10,000 people turn 65 each day. Even if Biden doesn't win, that's around a billion dollars in new revenue possibly created each week, and Clover has a share of that, competing against companies like United Health and Humana. It doesn't take a genius to work out the compounding effect."
  • The number of Medicare Advantage enrollees more than doubled between 2009 and 2019, and certain regulations were subsequently relaxed due to the pandemic.
  • Palihapitiya adds that he kicked the tires on Clover during its Series A funding round in 2015, but passed. "I didn't understand Medicare Advantage yet and was just coming up to speed on the intricacies of Obamacare."

The bottom line: Medicare Advantage is likely to be a growing, lucrative business no matter who sits in the Oval Office for the next four years. But the degree of growth may be on the ballot.

Go deeper

Oct 14, 2020 - Health

Private equity-owned air ambulances charge the highest rates

Adapted from Brookings; Chart: Axios Visuals

Air ambulances owned by private equity firms charge the highest rates — more than seven times what Medicare pays, according to a new analysis by the USC-Brookings Schaeffer Initiative for Health Policy.

Why it matters: Air ambulances are frequent sources of surprise medical bills, and even when they're covered by insurance, we all pay for these expensive prices through our premiums.

Dems' immigration plan hits major roadblock

Senate Majority Leader Sen. Chuck Schumer. Photo: Alex Wong/Getty Images

The Senate parliamentarian ruled Sunday that Democrats cannot include pathways to citizenship in the $3.5 trillion budget reconciliation package, per a copy of the ruling obtained by Axios.

Why it matters: It's a blow to Democrats who hoped to provide pathways for millions of undocumented immigrants in the U.S. Using reconciliations would have allowed them to pass politically contentious immigration changes with only 50 votes, as opposed to the usual 60 required.

FBI says human remains found in Wyoming likely Gabby Petito

Gabby Petito. Photo: FBI

Human remains found in Teton County, Wyoming, are "consistent with the description of" missing 22-year-old Gabby Petito, said FBI Denver official Charles Jones at a news conference Sunday.

Details: The cause of death had yet to be determined, but Jones said: "Full forensic identification has not been completed to confirm 100% that we found Gabby, but her family has been notified of this discovery." Authorities said they're continuing the search for her fiancé, Brian Laundrie.