UnitedHealth Group Inc. (UNH): 7 States With the Lowest Health Care Costs

Winning with the winners
There probably isn’t a clear-cut way for investors to profit from this information. One possible option, though, is to buy stocks of health insurers that have a significant presence in these states that spend less on health care. The premise here is that the insurers could generate more profits if they don’t have to pay out as much to health care providers on a per-capita basis.

Aetna Inc. (NYSE:AET) bought Coventry Health Care in May. Coventry’s Altius Health Plans holds a market share over 9% in Utah. UnitedHealth and Humana Inc (NYSE:HUM) ranked among the top five health insurers in Utah in direct premiums received in 2011. Both companies claimed more than 5% market share.

All three companies also maintain a sizable presence in the No. 2 state on our list, Arizona. UnitedHealth Group Inc. (NYSE:UNH), in particular, stands out in the Grand Canyon State with 2011 premiums from the state of more than $1.1 billion.

Actually, these big insurers operate in all of the seven states that have the lowest health care costs. However, they also operate in all of the states with the highest costs. This doesn’t mean that the stocks aren’t good picks, though. They have all done very well so far this year.

AET data by YCharts.

Aetna Inc. (NYSE:AET) has had an especially good 2013. Even with the nice 30% run, the stock still looks attractively valued.

Changes coming
While these states currently have lower health care costs than the rest of the nation, many people are worried about what will happen with medical costs in the years to come. New technologies, new payment methods — and, of course, a new health care model with Obamacare — will change how much all Americans pay for health care.

The article 7 States With the Lowest Health Care Costs originally appeared on Fool.com and is written by Keith Speights.

Fool contributor Keith Speights has no position in any stocks mentioned. The Motley Fool recommends UnitedHealth Group Inc. (NYSE:UNH).

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