Yikes! Individual Health Insurance Policy Premiums Expected To Surge
Yikes! Yes Yikes! Individual health insurance policy premiums continue to rise as the options diminish as we move into 2018. The group that makes up the vast majority that is squarely hit by this situation are early retirees, skilled tradespeople, musicians, self-employed professionals, & business owners. This group represents millions of Americans who do not qualify for any assistance and pay the full price of the insurance premium and the continuing hikes. I personally paid just over $1500/month for my family of four in 2016. In 2017 for the same family of four (knock on wood that we are relatively healthy) we are paying over $1800/month. I expect that by the time we start receiving our monthly bills in 2018 they will be for an amountnorth of $2000…This is a problem and it is also an opportunity.
One of the companies that are covered in the Vista Partners’ Coverage Universe and that has benefited from this trend is Tampa, FL based Health Insurance Innovations (NasdaqGM: HIIQ) which operates as a developer, distributor, and administrator of cloud-based individual health and family insurance plans, and supplemental products in the United States. In fact, their stock has gone from a 52-week low of $4 to a recent high of $37.38. They have continued to exceed revenue and earnings expectations over the last year and obviously, the market has liked it.
On Friday, HIIQ’s dropped down to $27.40 but firmed up through the day and closed at $31. This drop in share price came post the Trump admin coming out Thursday stating they want to “stabilize the ACA market” but unfortunately offered no plans. I believe the assumption and reaction is that this would be negative for HIIQ’s business, however, this may be actually positive with higher premiums and fewer options coming forward as a result. In fact, individual health insurance policy seekers would likely be forced to seek less costly alternatives like HIIQ provides.
Note that Canaccord Genuity issued an update on Friday and stated that this pullback was an opportunity to get in at an interesting entry point and has a price target of $39 a share. Cantor Fitzgerald also issued an update report Friday and stated that the weakness in the shares is “unfounded” and maintained their $38 target price and further stated that it also believed this Trump admin action could actually be a positive development for HIIQ.
I tend to agree with both groups and added significantly to my position!
Please visit the Dedicated Company Page for HIIQ located within the Vista Partners Coverage Pages in order to gain a greater understanding of this opportunity and to discover others.