Health care stocks have done well in recent months as investors turn toward "defensive" shares and appear to have priced in increasing odds of Democrats gaining power in the midterm elections, Axios' Matt Phillips reports.

Why it matters: The price moves suggest that traders and investors see increasing odds that some cuts to federal health spending imposed by President Trump's big 2025 spending bill could be undone, analysts say.

The latest: The S&P 500's health care sector is up more than 9% over the last three months, the second-best performer of the blue chip index's 11 sectors. (Energy was the best.)

• Pharmaceutical shares like Eli Lilly, Merck and AbbVie were some of the strong contributors over that period.
• Hospital chains such as HCA and Universal Health Services (+21%) as well as insurers like Elevance Health (formerly Anthem, +15%) have also posted gains.

Zoom in: Wall Street analysts suggest that some of the peppiness in health care reflects expectations that costly cuts imposed under unified Republican control in Washington last year could be reversed, delayed or moderated if Democrats win one or both houses of Congress on Nov. 3.

What they're saying: Democratic control of the House and the Senate would open "the door for delays in scheduled cuts to reimbursement for hospital services from the Medicaid program" that were part of the One Big Beautiful Bill Act enacted last year, wrote Brian Tanquilut, an analyst with Jefferies.

• "Investor sentiment has turned notably bullish for hospitals," he added.
• "A Dem sweep could see increased health care subsidies and delayed health care cuts," Citi analysts wrote earlier this month.

The intrigue: The strong showing for drug stocks such as Merck (up 14.4% over the last three months) and AbbVie (up about 12%) is hard to square with the expectations of Democrats taking control of Congress, as they are often seen as more open to policies that curtail the industry's pricing power.

• One answer could be that the drug pricing debate has been a relatively low-profile part of campaigning this year.

Reality check: Analysts say that the health care sector stands to benefit the most if Democrats retake both houses of Congress.

• If they just capture the House, "we do not expect meaningful health care reform to pass in this scenario," analysts at TD Securities wrote.
• Moreover, these analysts said, even if the House and the Senate go blue, it could still be difficult for Democrats to deliver policies they're pushing.
• "The better Democrats do in the midterms, the more progressives will be sent to Capitol Hill, which will push the health care agenda even further left, decreasing the likelihood for bipartisan middle ground," the TD Securities analysts wrote.
• An emboldened left, they said, would "increase the calls for partisan oversight efforts that will inflame President Trump" and make any health care legislation difficult.

Caveat: It's difficult to attribute all of the recent move higher in health care stocks to the looming elections.

• There has been a simultaneous move by investors into other defensive areas of the market, such as consumer staples, amid a cooling off of the previously booming AI trade.
• Some of the uptick for health care might be driven by similar dynamics.

Calls to mental health providers listed in the networks of major commercial insurance plans yielded appointments only 12.4% of the time, a new study published Friday in JAMA Health Forum found.

Why it matters: As has been found in public insurance plans, the study suggests that mental health access within private plans is also much more limited than it appears to be on paper.

The big picture: Advocates and experts for years have pointed out the discrepancy between access to physical and mental health care and have pushed for greater parity between the two.

• Limited provider participation in insurance networks is one big problem. But another is the prevalence of "ghost networks," in which mental health providers are listed in insurance directories but aren't accessible to patients.
• Studies have previously found that though Medicaid or Medicare Advantage plans may include a fairly robust number of mental health providers in their networks, few of them are actually available for appointments.

What they found: The "secret shopper"-style study evaluated the availability of psychiatrists and psychologists listed in the online network directories of the largest commercial carrier in five different states.

• Out of nearly 6,000 total calls, callers couldn't reach a definitive outcome in 61% of them, most often because they reached only an answering machine or automated system.
• Among the calls that did result in an outcome, less than a quarter resulted in a scheduled appointment with the listed clinician, though that number rose to nearly a third when counting calls that led to an appointment with an alternate clinician.

What they're saying: "Health plans are committed to helping consumers access high-quality mental and behavioral health services — including growing behavioral health networks 46 percent over the past three years and helping connect members with available appointments," said AHIP spokesman Chris Bond.

• "Maintaining accurate directories requires ongoing coordination among health plans, providers and facilities."

The bottom line: "Access barriers previously documented in public insurance programs extend to the privately insured population, undermining the assumption that commercial coverage automatically translates into meaningful access to mental health care," the study authors conclude.