In the Affordable Care Act-centric election cycles over the last several years, it was pretty clear that insurers stood to benefit from Democrats being in control. But those political interests have been somewhat scrambled amid the party's harsher scrutiny of Medicare Advantage.

Why it matters: Whether and how to expand coverage is no longer the only big health insurance fight in town.

• "The basics of it used to be that Democrats would work to expand the number of people covered, decrease the uninsured rate and that's on net positive for insurers. Period," said Raymond James analyst Chris Meekins.
• But things have changed amid the Biden administration's crackdown on Medicare Advantage.
• "I think now, while there will likely be more uninsured if Trump ends up winning, the benefit [of a Trump presidency] if you specialize in an area like MA really outweighs any increase in the uninsured population," Meekins added.

Where it stands: You've seen all of the recent headlines about insurers' MA troubles, especially CVS, which last week ousted CEO Karen Lynch, and Humana, which has seen its stock price tumble. United has also predicted lower 2025 earnings, citing both Medicare and Medicaid issues.

• A big part of those problems is that seniors are using more care than expected (which we'll talk a bit more about below). But another factor is the Biden administration's approach to the program, including payment rates and quality ratings tied to bonus payments.
• But, as we've talked about many times here before, health insurance companies aren't just insurers anymore. They also control the vast majority of the PBM market — and PBMs are definitely in the crosshairs of the FTC under Biden.
• And one more thing: The election is likely also the X factor when it comes to the outcome of Cigna and Humana's rekindled merger talks, as former President Trump is expected to take a more lenient stance toward consolidation than a Harris administration would.

Yes, but: The idea that the federal government is overpaying insurers through MA isn't exactly partisan, and some Republicans — including former Trump health care officials — have also raised concerns.

• PBM and industry consolidation skepticism aren't very partisan either, although how active the FTC should be is.

The other side: Insurers with larger ACA or Medicaid footprints stand to gain from Democrats' general goals of strengthening and expanding those markets.

• The fate of the Biden administration's enhanced ACA subsidies, which are tied up with Trump's tax cuts, will be one of the first giant political debates under the new administration.
• "If you're to look at 100% assurance that the ACA would continue, Harris' strategy would be better" for the company, Oscar Health CEO Mark Bertolini told me this week.
• He said that under the company's three-year plan — which doesn't factor in an extension of the enhanced subsidies — the stock price could be at $66 a share. If they do continue, the price would be in the $80s, he said.
• But parts of Oscar's strategy, like catering to employees who have received money from their employer to get insurance on the individual market, "lean more toward the Republican side. So I'm not going to let the election get in our way," he added.
• 👀 When I asked him if Harris was better for the industry writ large, he said no: "I think the pressure[s] you see on the big insurers right now are coming from the [Biden-]Harris administration."

And some insurers with a large Medicaid presence, like Elevance, are already struggling with the effects of enrollment declines following redeterminations of who's eligible for the program post-pandemic. Further enrollment reductions could spell more trouble.

• "Medicaid and the ACA likely have targets on their backs if Republicans sweep the election, as they'll be looking for spending reductions to help pay for tax cuts. Cuts to the ACA and Medicaid would mean fewer people with coverage, and also less revenue for insurers," said KFF's Larry Levitt.

The last word: "In any election scenario, we're going to make the case that [the ACA] market is working and should be supported and strengthened," America's Health Insurance Plans CEO Mike Tuffin recently told reporters.

• "And you know, we hope that on a bipartisan basis, whether it's the employer market, the individual market, public programs, there's a recognition that all involved want to avoid disruption for people, and so we'll see when the dust settles after the election," he added.

You're hearing it all the time now: Some patients, especially seniors, are using more health care than expected, and that's giving insurers an enormous headache — including in the form of their stock prices.

Between the lines: Higher utilization, as it's officially called, is obviously a business problem. But depending on how long it lasts — or whether it just becomes a new normal — high utilization could easily translate into an all-of-us problem through even higher health care spending.

State of play: The Wall Street Journal published a good piece last weekend detailing the confluence of factors behind these higher costs for insurers.

• Some are pandemic-related. One ongoing narrative is that seniors are making up for care that they put off during the pandemic, and low-income Medicaid enrollees are seeking more treatment for things like mental health conditions that may have worsened.
• And as states have pruned their Medicaid rosters in the post-pandemic era, many of those who lost coverage were higher earners and healthier, leaving Medicaid insurers with a costlier group of enrollees.
• What's tricky about government programs is that insurers can't just renegotiate higher payment rates the way they do in commercial insurance — which is exactly what they're expected to do in the face of rising medical costs in the employer market.

Here's the kicker to the WSJ piece: "But what seems to have unnerved investors is how, after consecutive quarters of disappointing results, insurers still don't seem to have a full understanding of what is going on or when it will improve."

• And that points to a larger question: How temporary is this higher health care usage?

Where it stands: As of the beginning of this year, most health services' spending exceeded pre-pandemic levels and health costs were increasing at a faster rate than they had in recent years, according to a Peterson-KFF health tracker.

• In 2024, growth in the overall use of health care services has been higher than the growth in prices, according to Altarum's most recent health sector insights.
• A recent Trilliant Health analysis concludes that "healthcare utilization patterns suggest that Americans' health status is on a downward trajectory."
• And one huge wildcard when it comes to costs is whether — or really, when — insurers will be on the hook for covering more patients' GLP-1 costs, especially as the drugs get approved for more non-obesity uses.

The intrigue: Oscar Health's Bertolini, who used to be the CEO of Aetna, offered an alternate explanation for insurers' MA problems.

• "I think what you're hearing from the big health plans on Medicare is an excuse. The way you compete in Medicare Advantage is you ... have more zero-premium plans with richer benefits to keep the members," he told me.
• As the market has made it more difficult to offer no-premium plans, "what you got is mispricing by the industry to try and keep zero-premium plans when they knew they weren't going to get as much in risk adjustment," he added. "So they mispriced."
• 🌶️ Spicy!

With just an image of your face and the help of artificial intelligence, a new iPhone app can tell you your heart rate, blood pressure, oxygen saturation and even whether you are getting enough sleep.

Why it matters: The app from FaceHeart Vitals was one in a slew of digital health devices on display at the HLTH conference in Las Vegas this week that offered a glimpse of how digital health companies are thinking about health care's biggest problems, my colleague Tina Reed reports.

Many devices aimed to track patients' biometric data in real time.

• One of the latest consumer wearable devices tapped into the women's health trend: a pair of earrings from Incora Health that can track different health metrics, including internal body temperature, from the ear lobes.
• The earrings, which look like typical golden studs, aim to help women optimize their health and fitness based on what phase of their menstrual cycle they're in.
• Another tracker, from a company called Muse, uses technology that's been deployed in sleep clinics via a headband to help users train their brains for better focus and to improve their sleep quality.

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