Insurers and investors that bet big on Medicare Direct Contracting now face an uncertain future as regulators mull changes to the program.

Payer and provider startups with high percentages of lives under contract through the Center for Medicare and Medicaid Innovation program will be most affected by changes to the model, which was started by the Trump administration and allows companies new to the traditional Medicare space to manage the care of traditional Medicare beneficiaries.

CMS said on Sunday that a decision on the program’s future would come “soon,” following pressure from progressive lawmakers to cancel it and lobbying from provider associations to keep it alive. Progressives object to Medicare Advantage and private equity influence in the program, saying profit -driven motives could compromise patient care. Provider associations want changes to the program to better support provider-led groups as well, but say ending the program would spell doom for CMS’ value-based care initiatives.

While outright canceling the program seems unlikely at this point, changes to level the playing field for provider-backed organizations are essentially guaranteed, value-based care watchers say. Analysts are keeping an eye on how uncertainty around Direct Contracting’s future will impact small insurers that banked on the program, such as Clover Health.

During the company’s most recent third quarter, the insurtech covered 129,100 members, nearly half of which came from the Direct Contracting program. The company, which focuses exclusively on Medicare Advantage and Direct Contracting, generated more than half of its $427 million in revenue through the program. In 2022, the company aims for two-thirds of its revenue to come from Direct Contracting. Clover Health declined to comment for this article, and said it would share more about its Direct Contracting-aligned beneficiaries during an earnings call next week.

The company loses money on every member it manages through the program, noted Ari Gottlieb, a principal at A2 Strategy Group. Getting rid of these enrollees could help control the startup’s losses, which grew to $34.5 million in Q3.

“It’s bad for the story and the narrative for Clover, and it’s bad for the revenue,” Gottlieb said. “But when you’re actually capital constrained, burning through a lot of capital and you lose money on a business, having a business go away actually could have a near-term financial benefit.”

Clover is part of a class of Medicare Advantage companies that went public at the start of 2021 with hot valuations but whose stock price has since cooled. Since social media investor Chamath Palihapitiya took the company public via SPAC last year, Clover’s stock has fallen 80% to an all-time low this week of $2.10. The company’s stock has dropped 18% in the last five days.

A change to the program could lead to a drop in revenue for Clover Health, which could inspire some stockholders to push the business out of their portfolio since Palihapitiya cites revenue as the most important success metric among his fanbase, Gottlieb said.

“For a company that is about to lose a half a billion dollars this year, eliminating a large area of ??loss is actually potentially a good thing,” he said. “But it substantially changes Clover’s story, particularly to the group of uninformed investors that charged into the stock after the SPAC guy took it public.”

Bright Health Group–an insurtech that once held the highest valuation among the health insurer upstarts and now has experienced the greatest fall–has also seen its stock price drop 8% since federal regulators said they would tweak the program. The company declined to comment on how changes to this model would impact its business. Bright Health said it was approved to start operating a direct contracting entity on Jan. 1 through its provider subsidiary NeueHealth.

But the company’s underperforming stock can also be attributed to a high medical loss ratio, said Jeff Garro, a senior equity research analyst at Piper Sandler. The insurtech’s MLR reached 103% during the last quarter. At the end of the year, Bright burnt through so much cash that Cigna invested $550 million to bail out the insurtech. The company’s CEO announced earlier this week he planned to resign.

“Bright’s stock over the last two weeks—while there’s started to be increased controversy around this program—has been really volatile, and there’s been a few different things that you might be able to attribute it to,” he said, adding that it’s hard to say Direct Contracting rumors have been the clear driver of Bright’s stock drop.

Garro estimates about 8% of Bright Health’s 2022 revenue will come from Direct Contracting, but noted the company expects to break even around Direct Contracting in the near term.

agilon health, a physician enablement startup, cares for approximately 80,000 lives through the Direct Contracting model. The company, whose stock price has dropped 8% over the past five days, said political questions about the model tend to be driven by a misunderstanding of what it aims to do, a spokesperson wrote in an email. Many lawmakers are concerned that beneficiaries are automatically enrolled in the program, which is not the case, the company said.

VillageMD, which is responsible for approximately 65,000 lives through six direct contracting entities, likewise attributes criticism of the program to political misunderstanding. Gary Jacobs, executive director of the center for public relations and public policy at VillageMD, said he regularly answers lawmaker questions about the program, which he said builds on previous accountable care models. The primary care startup did not build its business around Direct Contracting, but changing the program could threaten clinical and social determinants of health services the company offers its enrollees, he said.

“It’s a model. It’s testing itself, and it’s always improving,” Jacobs said. “Somebody that is valuing their business solely on a model, it’s challenging in its own right. Because models that come out of the government are always subject to the dynamic we’re going through right now, which is the politics potentially trumps the policy, and that’s really where things get sticky.”