The Biden administration is looking to expand access to healthcare. Oscar Health (NYSE:OSCR) is a low-cost healthcare insurance plan company positioning to capitalize on this movement. Teladoc Health (NYSE:TDOC) should continue to thrive as people get back to work, and Illumina (NASDAQ:ILMN), with it's DNA sequencing solutions, should continue to be a steady climber with the current administrations' renewed emphasis on research and development.

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1. Individual mandates and Oscar Health

Should the U.S. see the return of the individual mandate, which requires individuals to have healthcare insurance or face financial penalties, one big winner could be Oscar Health. The company offers health plans in the individual insurance market, and is the third-largest for-profit insurer in the individual, small group, and Medicare Advantage markets. These three markets represent an estimated addressable market of $450 billion in direct policy premiums in 2020 across the U.S., according to the company. Currently, Oscar Health offers health insurance plans in 291 counties across 18 states, and has its eyes on expansion.

What the company believes sets it apart is its ability to provide frequent, personalized and engaging member experiences. As of Dec. 31, 2020, 89% of the company's customers had interacted with its digital channels and almost half of the company's customers had downloaded the Oscar Health app, approximately nine times higher than other insurers. This has led to 68% of the company's surveyed members stating that they trust Oscar Health to advise them on how and where to get healthcare needs, compared to an industry average of only 45%. Likewise, according to the company, Oscar Health has a net promoter score (NPS) of 30, versus an average score of three for other health insurers.

Since the company's inception in 2014, Oscar Health has experienced quite a bit of growth. As of Jan. 31, 2021, the company had 529,000 members, up from 82,000 as of Jan. 31, 2017. Despite taking in direct policy premiums of $2.3 billion in fiscal year 2020 (up from $1.3 billion in fiscal year 2019), the company is still running at a loss, generating $406.8 million in losses in FY 2020 an $261.2 million in FY 2019. Should the individual mandate return, those losses may quickly narrow for this $4.6 billion market cap company.

2. Cost savings with technology and Teladoc

With Teladoc Health, a little nudge goes a long way. Teladoc utilizes personalized health "nudges" to encourage the customer to veer toward a healthier lifestyle. For instance, a diabetic patient with multiple elevated sugar readings is nudged to check in with a health coach. The patient is then coached on healthier choices and is encouraged to discuss their medications with their healthcare provider. This has added up for insurers, as groups that have utilized Teladoc experienced a cost-of-care savings as high as $1,908 per person year in individuals with diabetes. Teladoc is looking to expand "the nudge" and its associated cost savings into other treatment markets such as depression, hypertension, and obesity.

Teladoc loves to land and expand, and has over 40 opportunities to cross-sell the company's pipeline of products. Once consumers join and start to explore Teladoc offerings, the company's products stick well. There is greater than 90% client retention if the client uses more than one product, and a five-point higher net promoter score for members who utilize two or more products.

With a focus on increased access to health and wellness, as well as cost containment, Teladoc could be a big winner during the Biden administration and long after the pandemic ends.

3. Renewed focus on research and Illumina

Scientists, rejoice! President Joe Biden requested a 20% increase for the National Science Foundation budget and a 21.4% increase for the National Institutes of Health (NIH).

That is great news for gene sequencing behemoth Illumina. Already guiding for fiscal year 2021 revenue growth of 17% to 20%, the company came out with preliminary guidance last week for the first quarter of 2021 to post record revenue of $1.4 billion, up 28% from Q1 2020.

Plus, the company is fighting the U.S. Federal Trade Commission's challenge to Illumina's planned acquisition of early cancer screening company GRAIL. While GRAIL may be in a hyper-competitive market of liquid biopsy and cancer diagnostics, it is awfully hard to bet against Illumina's $58 billion market cap, its sequencing expertise, and its $3.5 billion cash on hand. Given there is so much competition within the field, I think Illumina may eventually be able to acquire GRAIL, at which point I am eager to see what the two can do for the field, especially with support in Washington. Thanks to a renewed focus on the scientific community, in no small part because of the COVID-19 pandemic, Illumina will likely reap rewards for the next few, if not several, years.

Rock the vote

I think all three companies have an excellent chance to outpace the market during the next few years. Oscar Health is the riskiest of the three, as it competes against much larger competition and continues to generate losses. It is a tough call between Teladoc and Illumina, but I think a GRAIL acquisition and the rewards reaped from both GRAIL and its core sequencing market make Illumina the better play for healthcare investors for the remainder of this administration and beyond.

 
This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.