Zacks Industry Outlook Highlights: UnitedHealth Group, CIGNA, WellPoint, Aetna and Coventry Health Care

Zacks Industry Outlook Highlights: UnitedHealth Group, CIGNA, WellPoint, Aetna
                           and Coventry Health Care

PR Newswire

CHICAGO, March 21, 2013

CHICAGO, March 21, 2013 /PRNewswire/ --Today, Zacks Equity Research discusses
the U.S. Health Insurance, including UnitedHealth Group Inc. (NYSE:UNH) ,
CIGNA Corp. (NYSE:CI) , WellPoint Inc. (NYSE:WLP) , Aetna Inc. (NYSE:AET) and
Coventry Health Care Inc. (NYSE:CVH).

(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 

Link: 
http://www.zacks.com/commentary/26387/health-insurance-stock-outlook-march-2013

The health insurance industry has confronted many external challenges in the
recent past, such as federal, state legislative and regulatory reforms,
inability to meet the demand of more price- and service-conscious consumers, a
fiercely competitive market, shift of customer mix and uncertain economic
conditions in the U.S. and abroad, just to name a few.

Notwithstanding the headwinds, the industry is thriving under stress. Most of
the top six players -- UnitedHealth Group Inc. (NYSE:UNH) , CIGNA Corp.
(NYSE:CI) , WellPoint Inc. (NYSE:WLP) , Aetna Inc. (NYSE:AET) and Coventry
Health Care Inc. (NYSE:CVH) -- ended 2012 on a high note with impressive
earnings growth in the final quarter. Most of the carriers even raised their
2013 earnings estimates.

About the Industry

The health and medical insurance industry is an integral part of the U.S.
economy. According to the Centers for Medicare and Medicaid Services, U.S.
health expenditures account for about 18% of the country's annual GDP.
According to the World Health Organization, health care expenditure per person
in the United States is the highest in the world.

Despite huge sums of money spent on health care, millions of Americans lack
health insurance coverage or are underinsured. This was largely attributed to
a dysfunctional health care system, which was working for the past several
years. To rein in the wastage and make health care more accessible effective
and affordable, President Obama came out with the Health Care Reform in an
attempt to overhaul the nation's ailing health care system.

Health Care Overhaul

The Patient Protection and Affordable Care Act (PPACA), which was passed in
2010, marked the beginning of a multiyear implementation process. It is the
most substantial overhaul in the history of the nation's health care sector.

The reform was intended to provide coverage to the 32 million uninsured
Americans. The primary focus was to make health care facilities more
affordable, expand coverage for customers with pre-existing health conditions
and keep a check on health insurers.

Certain significant provisions of the legislation were: mandated coverage
requirements, rebates to policyholders based on minimum benefit ratios,
adjustments to Medicare Advantage premiums, the establishment of state-based
exchanges, greater investment in health IT, annual insurance industry
premium-based assessment, reduction in Federal assistance on Medicare
Advantage, restriction on rescission of policies and elimination of annual as
well as life time maximum limits.

The Reform had a rough patch since inception with opponents challenging its
individual mandate and Medicaid expansion clause as well as dragging it to
court. Insurers lobbied against most of its provisions and opposition
political parties swore to repeal the whole law if they were elected. But the
law survived the challenges with the Supreme Court upholding the
constitutionality of its individual mandate – the core of the reform.

Also, the re-election of Barack Obama provides the necessary ratification to
the health care reform. That said, the full implementation of the reform is
far from guaranteed given the substantial leeway states enjoy in enforcing key
parts of the legislation, particularly the setting up of exchanges and
expansion of Medicaid.

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