Healthcare stocks emerged as some of the clearest beneficiaries of the Democrats’ sweeping victory in the November 3 midterm elections, as investors reassessed the outlook for federal healthcare spending. With Democrats gaining control of both the House and Senate, expectations of potential changes to Medicaid funding and Affordable Care Act subsidies helped fuel a rally in health insurance and hospital stocks.
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The immediate reaction was particularly pronounced among companies serving government-funded health programs. According to Reuters, Centene Corporation climbed more than 8% in early trading on November 4, while Molina Healthcare, Inc. gained approximately 6%. Hospital operators, including Universal Health Services, Inc., HCA Healthcare, Inc., and Tenet Healthcare Corporation, advanced between 6% and 8%.
The rally reflects expectations that a Democratic-controlled Congress could seek to delay provisions of President Donald Trump’s 2025 tax and spending legislation that are expected to reduce Medicaid enrollment and constrain certain payments to hospitals. Investors are also weighing the possibility of restoring enhanced Affordable Care Act subsidies, which expired at the beginning of 2026 and contributed to higher insurance costs and declining enrollment. For more insight into the sector, access our meticulously curated list of the 10 Best Healthcare Stocks to Buy According to Hedge Funds for free here.
However, the market’s response should not be mistaken for an immediate change in healthcare policy. As Reuters reported on November 4, JPMorgan analysts cautioned that President Trump’s veto power could limit the scope of legislative changes, potentially producing “legislative gridlock” rather than sweeping reforms. The financial implications also differ across the sector, as health insurers and hospitals are more directly exposed to federal coverage decisions, while pharmaceutical manufacturers, medical-device companies, and life-science suppliers operate under different commercial and regulatory pressures.
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Against this backdrop, we examine ten healthcare and insurance stocks to buy after the 2026 democratic midterm sweep, focusing on their operating performance, financial strengths, and company-specific challenges.
Our Methodology
To compile our list of the 10 Best Healthcare and Insurance Stocks To Buy Following the 2026 Democratic Midterm Sweep, we selected the top ten healthcare-sector companies with the highest hedge fund ownership, taking the data from Insider Monkey’s extensive database. The stocks are ranked in ascending order of the number of hedge funds holding stakes in them.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Insider Monkey’s quarterly newsletter strategy selects 14 small-cap and large-cap stocks every quarter and has returned 612% since May 2014, beating its benchmark by 375 percentage points (see more details here).
10 Best Healthcare and Insurance Stocks To Buy Following the 2026 Democratic Midterm Sweep
10. AbbVie Inc. (NYSE:ABBV)
Number of Hedge Fund Holders: 88
AbbVie Inc. (NYSE:ABBV) has demonstrated that it can expand its pharmaceutical business despite the continuing erosion of sales from Humira, its former flagship immunology treatment. Its newer medicines, particularly Skyrizi and Rinvoq, have become increasingly important to the company’s financial performance.
The strength of this transition was evident in AbbVie’s third-quarter 2026 results. Revenue increased 10.3% year over year to $17.404 billion, supported by 16.3% growth in its immunology portfolio. Skyrizi generated $5.776 billion in global net revenue, while Rinvoq contributed $2.706 billion. Meanwhile, Humira revenue declined 31.2% to $683 million.
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The contrasting performance of these products illustrates how AbbVie has been replacing revenue lost to competition from Humira biosimilars. The company has also expanded its pipeline through the acquisition of Apogee Therapeutics, strengthening its exposure to immunology.
However, AbbVie’s growth is not uniform across its portfolio. Revenue from oncology increased only 0.8%, while aesthetics revenue declined 1.4% on a reported basis. For investors, the continued expansion of Skyrizi and Rinvoq supports the company’s transition away from Humira, although sustaining broader growth will require continuing contributions from additional products and therapeutic areas.
9. Boston Scientific Corporation (NYSE:BSX)
Number of Hedge Fund Holders: 99
Boston Scientific Corporation (NYSE:BSX) develops minimally invasive medical devices, with its cardiovascular business spanning electrophysiology, structural heart treatments, and vascular interventions. The company’s long-term investment case rests on its expanding treatment portfolio, although its latest results indicate that sustaining revenue growth remains a challenge. November month-to-date share-price performance through November 6, 2026, shows that the stock gained 1.83%.
According to its third-quarter 2026 results, the company generated net sales of $5.138 billion, up 1.5% year over year on a reported, operational, and organic basis. Cardiovascular sales reached $3.406 billion, up from $3.343 billion in the prior year period, while MedSurg revenue increased 0.6% to $1.733 billion. Management also projected a 1%–3% net sales decline for the fourth quarter of 2026.
Nevertheless, Boston Scientific continues advancing its cardiovascular portfolio. The company reported on November 2 that its SIMPLAAFY trial met its six-month primary endpoints, providing clinical evidence supporting potentially simpler post-implant medication regimens for its WATCHMAN FLX Pro device.
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Meanwhile, the company’s proposed $14.5 billion acquisition of Penumbra, announced earlier this year, would expand its cardiovascular portfolio into mechanical thrombectomy and neurovascular treatments. However, Reuters reported that pricing pressure in China and weakness in certain heart-device businesses could constrain growth in 2027, making sustained product adoption and profitability important considerations for investors.
8. Intuitive Surgical, Inc. (NASDAQ:ISRG)
Number of Hedge Fund Holders: 100
Intuitive Surgical, Inc. (NASDAQ:ISRG) continues to expand the use of robotic-assisted surgery. The company manufactures the da Vinci surgical platform and Ion robotic-assisted bronchoscopy system, with financial performance closely tied to procedure volumes and demand for its equipment and instruments. November month-to-date share-price performance through November 6, 2026, shows that the stock gained 4.81%.
In the third quarter of 2026, worldwide procedures across the two platforms increased approximately 15% year over year. Revenue rose 22% to $3.05 billion, supported by higher procedure volumes and system placements. Intuitive placed 546 da Vinci systems during the quarter, compared with 427 a year earlier. Its installed base reached 12,094 systems, an increase of 12% compared with the prior year period. For more insight, access our meticulously curated list of the 10 Best Healthcare Stocks to Buy According to Hedge Funds for free here.
However, GAAP net income declined to $523 million from $704 million. The company also recorded a $450 million pretax charge related to the proposed settlement of previously disclosed antitrust class-action litigation, making the headline earnings decline less representative of underlying operating activity. The settlement remains subject to court approval.
Investors need to consider the growing procedure volumes and system adoption as important measures of Intuitive’s commercial position. At the same time, litigation costs and capital requirements warrant attention when assessing profitability.
7. Merck & Co., Inc. (NYSE:MRK)
Number of Hedge Fund Holders: 101
The central investment challenge for Merck & Co., Inc. is becoming increasingly focused on the notion that the pharmaceutical company must develop a broader revenue base before its blockbuster cancer treatment Keytruda begins facing significant patent-related competition.
Merck’s third-quarter 2026 results demonstrated why Keytruda remains so important. Total quarterly sales increased 5% year over year to $18.1 billion, with Keytruda and Keytruda Qlex generating $8.6 billion, an increase of 6%. However, other medicines are beginning to contribute more meaningfully. The company reported that Winrevair, which treats pulmonary arterial hypertension, generated $694 million in sales, up 93% year over year. Merck’s animal health business also reported $1.7 billion in sales.
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The importance of this diversification extends beyond immediate revenue growth. Reuters reported that Merck is preparing for Keytruda’s US patent protections to begin expiring in 2028, while management expects newer medicines and pipeline developments to support the business over the following decade. It has plans to raise its revenue forecast from new products over the next decade, which is supported by acquisitions and recent successes in clinical trials.
Merck’s current earnings thus demonstrate the strength of its established portfolio, but the more consequential question is whether newer treatments can offset future pressure on Keytruda revenue.
6. Revolution Medicines, Inc. (NASDAQ:RVMD)
Number of Hedge Fund Holders: 105
Revolution Medicines, Inc. (NASDAQ:RVMD) has entered a new phase following the US approval and commercial launch of Rasonque, its treatment for certain patients with metastatic pancreatic cancer. The development transforms the company from a primarily research-focused biotechnology business into one with an approved commercial product. Its third-quarter 2026 results were particularly significant, showing that Rasonque generated $197.6 million in net product revenue despite being commercially available for only approximately five weeks following its August 26 approval.
However, the company cautioned that early sales included the effects of several factors, including patients transitioning from the U.S. Expanded Access Program (EAP), individuals awaiting an approved treatment, and initial distribution-channel stocking. These factors mean the first quarter’s sales should not be treated as representative of recurring demand.
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Revolution Medicines also reported a quarterly net loss of $407.5 million, compared with $305.2 million a year earlier. Research and development expenses increased substantially as the company continued expanding its oncology pipeline, going from $262.5 million in fiscal Q3 2025 to $417.1 million in fiscal Q3 2026.
Its financial position remains significant, with approximately $3.7 billion in cash, cash equivalents, and marketable securities at September 30. The commercial launch therefore provides meaningful validation of the company’s development efforts. Establishing sustainable demand and controlling the costs of commercial expansion remain separate challenges for the company.
5. Danaher Corporation (NYSE:DHR)
Number of Hedge Fund Holders: 108
Danaher Corporation (NYSE:DHR) provides exposure to healthcare through the tools and technologies used in scientific research, biotechnology manufacturing, and diagnostics. Its business is less directly tied to government insurance reimbursement than hospitals or managed-care companies, with performance depending substantially on spending by laboratories, pharmaceutical manufacturers, and healthcare customers.
The company’s third-quarter 2026 results demonstrated improving financial performance. Revenue increased 8.5% year over year to $6.6 billion, while net earnings rose 34.5% year over year to approximately $1.2 billion, or $1.71 per diluted common share.
However, reported revenue growth tells only part of the story. Danaher’s non-GAAP core revenue increased 3.0%, while core revenue excluding respiratory revenue increased 5.5%. This shows that acquisitions, changing diagnostic demand, and other adjustments affect comparisons between reporting periods. The company also generated $1.9 billion in operating cash flow and $1.6 billion in non-GAAP free cash flow.
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Although diagnostics reported substantial sales growth, its underlying core performance was considerably weaker than the headline increase, reflecting the different conditions across Danaher’s businesses. For investors, the improving cash generation and strength of its life-science operations provide evidence of operational progress, but sustained underlying growth across biotechnology and diagnostics remains more important than acquisition-driven increases in reported revenue.
4. Johnson & Johnson (NYSE:JNJ)
Number of Hedge Fund Holders: 117
Johnson & Johnson has two major healthcare businesses: Innovative Medicine, which develops pharmaceutical treatments, and MedTech, which provides medical technologies across several specialties. November month-to-date share-price performance through November 6, 2026, shows that the stock gained 1.1%. In the third quarter of 2026, Innovative Medicine sales increased 7.7% year over year to $16.757 billion, while MedTech sales grew 2.5% to $8.642 billion. It further reported sales growth of 5.9% year over year to $25.4 billion, supported by growth across its healthcare businesses.
However, GAAP diluted EPS fell to just $0.09 from $2.12 a year earlier. The company attributed the result partly to a one-time special charge associated with its proposed talc litigation resolution, alongside expenses related to acquisitions and collaborations.
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Adjusted diluted EPS was $2.59, compared with $2.80 in the prior-year quarter. Consequently, the company’s revenue growth did not translate into an improvement in adjusted earnings during the period. Johnson & Johnson has also continued advancing its MedTech portfolio, including receiving market authorization for its OTTAVA robotic surgical system.
The underlying healthcare business remains substantial for the company, but the difference between revenue growth and reported profitability warrants attention. The financial consequences of litigation and continued investment in new technologies remain important considerations.
3. Thermo Fisher Scientific Inc. (NYSE:TMO)
Number of Hedge Fund Holders: 118
Thermo Fisher Scientific Inc. (NYSE:TMO) occupies a central position in the healthcare supply chain through its scientific instruments, laboratory services, diagnostics, and technologies used in pharmaceutical research and manufacturing.
Its investment case differs from that of drug developers because its business provides products and services to companies undertaking scientific research and commercial production. This creates exposure to a broad range of healthcare and biotechnology activity rather than the success of any single therapy.
In its third-quarter 2026 results, revenue increased 9% year over year to $12.14 billion, including 6% organic revenue growth. GAAP diluted EPS increased 9% to $4.64, while adjusted EPS rose 15% to $6.68. The difference between these measures is relevant when evaluating profitability and the effects of items excluded from adjusted results. Gain insight into how TMO compares with other popular stocks in the sector with our comparative article on Thermo Fisher (TMO) vs Danaher (DHR): Which Life Sciences Stock Looks Better Positioned?
Thermo Fisher’s growth also needs to be assessed against spending conditions across pharmaceutical development, laboratory services, and scientific equipment markets. The company’s diversified customer base and improving earnings provide an established operating foundation. However, investors need to keep in mind that continued organic growth is an important indicator of demand across its businesses, particularly when evaluating performance independently of acquisitions.
2. UnitedHealth Group Incorporated (NYSE:UNH)
Number of Hedge Fund Holders: 143
UnitedHealth Group Incorporated (NYSE:UNH) is the company on this list with the most direct exposure to the healthcare policy debate following the Democratic midterm victory. Through UnitedHealthcare and Optum, it operates across health insurance, medical services, pharmacy-related services, and healthcare technology.
The election has renewed attention on potential changes to Medicaid funding and Affordable Care Act coverage, although those developments should not be treated as guaranteed improvements in UnitedHealth’s financial performance.
The company’s third-quarter 2026 results showed revenue of $112.7 billion and earnings from operations of $6.6 billion. Operating cash flow reached $5.1 billion, equivalent to approximately 1.2 times net income. UnitedHealth also raised its full-year earnings outlook, projecting adjusted net earnings of at least $20.50 per share.
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Nevertheless, the company’s financial performance remains tied to medical costs, reimbursement arrangements, and the economics of its insurance and healthcare services businesses. Policy changes could affect those operations differently. The election introduces a new consideration for investors, but the company’s ability to manage medical expenses and sustain operating profitability remains central to the investment case.
1. Eli Lilly and Company (NYSE:LLY)
Number of Hedge Fund Holders: 152
Eli Lilly and Company (NYSE:LLY) has continued to distinguish itself through the commercial success of its diabetes and obesity treatments, particularly Mounjaro and Zepbound. Unlike health insurers benefiting from expectations of changes to federal healthcare spending, Lilly’s immediate financial performance could continue to be driven principally by demand for its medicines.
The company’s third-quarter 2026 results demonstrated the scale of that demand. Revenue increased 39% year over year to $24.4 billion, supported by 53% volume growth. However, realized prices declined 15%, illustrating the importance of distinguishing expanding treatment volumes from the prices received by the company. Mounjaro generated $10.7 billion in worldwide quarterly revenue, up 65%, while Zepbound contributed $5.3 billion in U.S. revenue for the quarter, up 48%. Access our extensive research on Lilly’s bull and bear case for free here.
Lilly also raised the midpoint of its full-year 2026 revenue guidance to a range of $91 billion to $92 billion. Reported diluted EPS increased 16% to $7.22, although the quarter included substantial acquired research and development charges and approximately $900 million in benefits, primarily from $410 million of Jardiance milestones and favorable adjustments to rebate and discount estimates.
Lilly’s growth demonstrates the commercial strength of its leading medicines. The sustainability of that growth depends on continued demand, manufacturing capacity, realized pricing, and the broader development of its pharmaceutical portfolio.
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