Democratic control of both chambers of Congress after the 2026 midterm elections is unlikely to have material near-term credit implications for U.S. health insurers, providers, pharmacy benefit managers, drugmakers or medical device manufacturers, Fitch said in a Nov. 11 report.
Seven things to know:
1. Further federal funding cuts are off the table, Fitch said, but any significant healthcare legislation will still require bipartisan support.
2. Democrats have signaled plans to restore enhanced ACA subsidies and reverse the Medicaid changes in HR 1. Either move would be credit positive for insurers and providers, but neither is in Fitch’s base case. Democrats lack the votes to override a presidential veto or break a Senate filibuster.
3. Democrats’ main lever is must-pass appropriations, which they could use to tie healthcare priorities to government funding bills. A negotiated trade of some provisions for administration priorities is plausible, Fitch said.
4. Incremental enrollment standards that reduce Medicaid volumes will continue to pressure Medicaid-focused insurers and providers with heavy exposure to government-funded patients, including those that benefit from provider taxes.
5. The expiration of enhanced ACA premium tax credits will keep weighing on provider and exchange insurer revenues as more people drop coverage. Because those leaving are likely to be healthier on average, the remaining ACA population’s risk profile is likely to deteriorate.
6. PBMs and vertically integrated insurers will remain under regulatory scrutiny. Fitch expects Congress to rely on hearings rather than legislation, which could bring reputational and legal costs for companies under inquiry.
7. Drug pricing is a lower-likelihood, higher-impact area for bipartisan legislation, Fitch said. Lawmakers could codify the administration’s most-favored-nation pricing measures, which so far rely on executive orders, industry agreements and pilots. Patent expirations and supply chain risks remain bigger credit drivers for drugmakers. Fitch expects little credit impact for device manufacturers, though tariffs and supply chain disruptions remain cost headwinds.
