CHICAGO, Aug. 8, 2011 /PRNewswire/ -- Today, Zacks Equity
Research discusses the Health Insurance, including CIGNA
Corp. (NYSE: CI), UnitedHealth Group Inc. (NYSE: UNH),
Aetna Inc. (NYSE: AET).
(Logo: http://photos.prnewswire.com/prnh/20101027/ZIRLOGO)
A synopsis of today's Industry Outlook is presented below. The
full article can be read at
http://www.zacks.com/stock/news/58539/Health+Insurance+Stock+Outlook+-+Aug.+%2711
Though mostly all the carriers are performing well in the
sector, we are positive about CIGNA Corp. (NYSE: CI),
UnitedHealth Group Inc. (NYSE: UNH) and Aetna Inc.
(NYSE: AET).
CIGNA, carrying a Zacks #2 Rank, is relatively safe, owing to
minimum exposure to MLR regulations, unreasonable rate reviews and
health insurance exchanges. The company has also seen its bottom
line boosted by price increases and exits from non-strategic
markets such as the Medicare Advantage individual
private-fee-for-service business. The company has also shown
operating momentum and has gained commercial risk memberships for
four quarters in a row.
We also see a positive risk/reward scenario for UnitedHealth
Group, which carries a Zacks #2 Rank. The country's largest
managed-care company by revenue has been realigning its businesses
by making management changes and undertaking rebranding efforts, in
anticipation of a shifting industry landscape. Its diversified
product offering will allow it to adapt to the health care
regulations.
Driven by an improved customer focus, with better systems,
completed acquisition network integrations and more regional
management, UnitedHealth's performance should continue to improve.
Its strong balance sheet will allow it to annex weaker firms that
cannot adapt to the reformed health insurance system properly. The
company has witnessed significant enrollment growth, and its claims
costs continue to be muted by consumers' light use of health
services.
Aetna Inc., with a Zacks #2 Rank, is another pick. The health
insurer has been making acquisitions and diversifying as well as
strengthening its presence in health information technology,
accountable-care organizations or ACOs, and Medicare plans. It has
stepped up efforts to provide midsize companies with a self-funded
insurance option.
Aetna has been benefiting from higher rates and less membership
declines. It also has been more assertive on hospital pricing and
reimbursements. In May, the federal regulators lifted sanctions
that had blocked Aetna from marketing Medicare plans and signing up
new beneficiaries. The ban has been lifted just before the onset of
the new enrollment season beginning July 1,
2011.
Medicare continues to be a key focus of growth for the company.
However, the growth is likely to be slow as regaining of 44000
Medicare Advantage lives, which the company lost following the
sanction, would be difficult.
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