Aetna’s stock reached a new 52-week high recently as investors became more confident of the industry in general. The company has also done an excellent job at growing both revenue and earnings.
Aetna Inc. (NYSE:AET) is also encountering significant increases in healthcare costs and insurance payouts. This could lead the company to look at increasing its short-term insurance policies.
Humana Inc (NYSE:HUM) is another major insurance company that offers short term health insurance under the branded name HumanaOne. Humana has the largest market share of insurance of these three companies with 4.56%. Aetna has 4.13% and Cigna has 1.83%.
Although this company has the largest market share, it is the cheapest of the three in relation to earnings. Its price to earnings ratio is 9.78 while both Aetna Inc. (NYSE:AET) and CIGNA Corporation (NYSE:CI) have price to earnings ratio of over 11.
Humana has growth plans of providing more services to customers in the wake of announcements from the government on favorable reimbursement plans for optional Medicare.
Humana’s stock price had dipped because of fears that Medicare reimbursements would dip. The stock has begun to recover and may be attractive to investors.
The healthcare industry is extremely complicated. Consumer demand, government regulation and the medical industry all add to the difficulties in finding the right company in which to invest. As the Affordable Care Act brings more changes in the future, one product to consider is short term health insurance. These companies offer this product and may be worth a look from investors.
The article Healthcare Changes Provide New Opportunities originally appeared on Fool.com.
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