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Fly News Breaks for September 25, 2019
EHTH, HIIQ
Sep 25, 2019 | 07:41 EDT
The Centers for Medicare and Medicaid Services announced yesterday in a press release its prediction of a ~10% increase in Medicare Advantage enrollment for the 2020 open-enrollment period, which is November 1 to December 15, B. Riley FBR analyst Randy Binner tells investors in a research note. At the same time, CMS predicted an average 23% decline in Medicare Advantage premiums expected to be paid by consumers, the analyst points out. He believes the market misinterpreted the announcement, causing Heath Insurance Innovations (HIIQ) and eHealth (EHTH) to trade lower. eHealth is a well-established distributor of Medicare Advantage products, and Heath Insurance Innovations is pivoting its strategy to have MA and similar products comprise a larger share of its overall production in the second half of 2019, explains Binner. He believes a larger, predicted volume of MA contracts should be positive for distributors like Heath Insurance and eHealth. As such the analyst recommends using yesterday's selloff in Heath Insurance Innovations as a buying opportunity. He reiterates a Buy rating on the shares with a $45 price target.
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