Health care remains a subject of divide between the two parties, with Republicans trying to repeal Obama's nationwide health care reform since 2010. And, while it is unlikely they can overturn the entire law, they can certainly chip away at parts of it.

If Republicans take control, Citigroup estimates that large commercial providers of health insurance plans may see their earnings grow by 5% to 10%. That kind of growth would increase these companies' worth by 20%. The companies are currently estimated to see a 5% to 15% drop in earnings, according to a recent analyst report by the firm.

Within the broader managed care sector, which includes commercials plans, and Medicaid and Medicare plans, Citigroup says that valuations on most stocks should tack on at least an additional 2 multiple points. If a Republican fails to win the presidential seat but the party gains control of the senate, the valuation of the group would add up to one point.

This is all good if Republicans make a sweeping win, but what if President Obama takes office for second term? Even then, investors may benefit yet.

"The market seems to be discounting maintenance of the political status quo," writes Citigroup, which estimates that managed care stocks are trading under the 9.5x 2012 earnings estimates.

Investors may want to skew their picks toward companies providing commercial plans. Under a Republican victory, Citigroup says stocks that would benefit most in this category rank in the following order: WellPoint(WLP_), Coventry Health Care(CVH_), UnitedHealth Group(UNH_), Aetna(AET_), CIGNA(CI_) and Health Net(HNT_).

For Medicare plans, the firm picks Humana(HUM_), HealthSpring(HS_), Universal American(UAM_) and WellCare(WCG_). All these companies provide elderly with Medicare through private health insurance plans called Medicare Advantage.

The idea behind investing in the above Medicare plans is that Republicans have historically encouraged seniors to enroll in Medicare Advantage programs. In addition, Citigroup notes that Republicans have been willing to give the programs a fair reimbursement. By contrast, under Obama's reform, government subsidies to the Medicare Advantage program would be gradually eliminated altogether.

On the Medicaid end of the spectrum, stocks are a tougher pick. Republicans might impact Medicaid in two ways:

The Medicaid market is expected to increase by around 30% in 2014, according to Citigroup. But, Republicans may try to do away with this expansion and cut back the money that states use to fund Medicaid programs. A company like AMERIGROUP(AGP_), with a $3.3 billion market cap, for example would lose a whopping $2.5 billion in revenue, according to Citigroup.

Even so, Citigroup say that Medicaid companies would still prefer a Republican administration to a Democratic one. "Republicans are much more philosophically aligned with moving the care of the dual eligibles into managed care organizations," writes the firm.

What that means is that that those qualifying for both Medicare and Medicaid benefits maybe more inclined to find Medicaid programs under a Republican administration. According to analysts' estimates, that opportunity would deliver more than $320 billion in revenue per year for Medicaid managed care providers. By contrast, Medicaid revenue would only add over $40 billion without dual eligibility.

The bottom line is: Keep an eye on opportunities within health insurance providers, particularly commercial providers, if you believe Republicans will win the election this year. But if you believe otherwise, the space is still worth your consideration.

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The federal government has rejected a request by Texas to be excluded from a new law that limits how much health insurance companies can spend on overhead.

The law is part of the Affordable Care Act, changes made in federal health care law in 2010 that Texas officials say is unconstitutional. Part of the bill requires health insurers to spend at least 80 percent of their revenue on providing health care or health improvement programs. Those that spend more than 20 percent on overhead and executive salaries will be required to give rebates to customers starting this year.

Federal officials at the Department of Health and Human Services said Texas did not prove that the state’s insurance market would be destabilized by the new law. As a result, Texas health insurers will likely pay out $476 million in rebates over the next three years, said Gary Cohen, acting director of oversight at the agency.

“We have determined that no adjustment to the 80-20 rule in Texas is warranted,” Cohen said. “This means that consumers in Texas will get the full benefit of the Affordable Care Act.”

The Texas Department of Insurance issued a statement rejecting the federal agency’s conclusions, saying it did not give insurance companies time to adjust their business models to new rule.

“A reasonable, responsible phased-in approach would still have afforded rebates to Texas consumers without risking disruption, dislocation and withdrawal of carriers,” the department said in a statement.

The Texas insurance commissioner applied for a waiver from the law in July and asked for permission to allow Texas companies to gradually lower the spending requirement for health services to 71 percent in 2011, 74 percent in 2012 and 77 percent in 2013.

Seventeen states have applied for waivers, and after Friday’s Texas decision, two are pending. Nine states, including Texas, have been denied. Six states have been granted a waiver, although in most cases the agency did not give the state as much as it wanted.

The states granted a waiver include four with Republican governors: Maine, Nevada, Georgia and Iowa. The states denied include one with a Democratic governor, Delaware. Florida was denied a waiver. Gov. Rick Scott, like Gov. Rick Perry is a big opponent of Obama’s health care law.

If you don't have LTC insurance, the time to get it is now, when the tax advantage is fresh in your mind, Gott advises, "Then remember to make your claim at tax time next year, and remember to do that again and again, year after year for as long as you pay premiums."

Deduction limits for the 2011 tax year range from $340 to $4,240, depending on age. For the 2012 tax year, the deduction limits range from $350 to $4,370; and they tend to increase every year. "Over the lifetime of many policies, cumulative deduction claims can really mount up, from a few thousand to more than $100,000 in some cases," Gott says.

Many states offer additional incentives for owning long-term care insurance. These usually take the form of state tax deductions or rebates. "LTC protection becomes even more of bargain with this nice double dip," says Gott.

LTCFP does not offer tax advice but teams with accountants and other tax experts to help their clients get all the deductions or other benefits available to them.