2 Health Insurance Stocks That Should See New Highs in 2021

Widespread job loss in the United States brought with it the loss  job-based health insurance coverage for many. However, the number of uninsured people has not increased significantly. That’s because…

the majority of people that lost their job-based health insurance coverage last year have gained other types of  health coverage through public programs, such as Medicaid, the Children’s Health Insurance Program (CHIP), and health insurance marketplaces established by the Affordable Care Act (ACA).

Along with the recently passed COVID-19 recovery  bill, a rising job market is expected to further reduce the number people uninsured for health care in the United States in the coming months. Moreover, the industry has been benefiting from rising medical costs. According to a report by Aon, the costs of employer medical benefits across the world are forecasted to rise 7.2% in 2021, outpacing general inflation by 5%.

Hence, we think health insurance companies UnitedHealth Group Incorporated (UNH – Get Rating) and Cigna Corporation (CI) exhibit potential to reach hit highs this year. Let’s take a closer look.

UnitedHealth Group Incorporated (UNH – Get Rating)

UNH is a diversified health care company that offers  a broad spectrum of products and services through four segments: UnitedHealthcare, OptumHealth, OptumInsight and OptumRx. The company provides health care coverage and benefits services, along with information and technology-enabled health services.

Last month, UNH’s Board of Directors appointed Andrew Witty as the company’s new chief executive officer, succeeding David S. Wichmann. Witty comes with an extraordinary breadth and depth of health care experience, sophisticated strategic thinking and outstanding leadership development skills, making him well-positioned to help the company grow and deliver for stakeholders.

In January, UNH expanded the availability of virtual care with local physicians and introduced a new Virtual Primary Care service designed to enable access to medical services in a simpler and more convenient way. These services should  improve people’s access to local care providers, thereby paving a path for the company to attract many potential customers.

Despite being impacted by COVID-19 care costs, continued voluntary consumer and customer assistance initiatives, and other pandemic-related factors, UNH fourth quarter results reflect continued strong performance. Its total revenues have increased 7.5% year-over-year to $65.47 billion in the fourth quarter ended December 31, 2020. Its revenue for the UnitedHealthcare segment has risen 4.3% from its  year-ago value to $50.33 billion, while its Optum segment revenue grew 20.3% to $35.85 billion.

Analysts expect UNH’s revenues to grow 7.5% year-on-year to $69.23 billion in the current quarter, ending March 31, 2021. A consensus EPS estimate of…

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