Biden would look to expand ACA (Obamacare) and include a public option. A publicly funded health plan option would compete alongside private health insurers, possibly with the ability to operate at a loss, and thus offer healthcare coverage at a significantly cheaper price.
We believe the introduction of a public option is unlikely, given the probability of a narrowly divided Senate, and Biden’s likely reluctance to end the filibuster. However, Biden may feel enough pressure from the Sanders wing to push for this option aggressively.
During the 2009 ACA debate, investors viewed a public healthcare option as inevitably resulting in single-payer healthcare, effectively putting private health insurers out of business. Despite the barriers that implementation faces, the threat of a public option could reemerge and linger as an overhang on managed care. Given the low likelihood that a public option would survive a narrowly divided Senate, the much more likely resulting status quo scenario would be a strong positive for managed care sentiment.