Health Net Inc.
) is set to capitalize on the ongoing U.S. Health Care reforms.
For this, the company that is a veteran in the field of Medicare
and Medicaid services is collaborating with federal government
agencies like Centers for Medicare and Medicaid Services (CMS)
and the California Department of Health Care Services (DHCS).
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Health Net's wholly owned subsidiary, Health Net Community
Solutions, Inc. has inked deals with the aforementioned agencies.
The objective is to create awareness and improve health outcomes
among the dual-eligibles in Los Angeles and San Diego through a
The duals demonstration program arranged in the regions is part
of Cal MediConnect - California's Coordinated Care Initiative.
Through this deal, Health Net will cater to individuals who
satisfy the eligibility criteria for both the Medicare (Americans
aged 65 years and older and the disabled) and California's
Medicaid program - Medi-Cal (those with family income up to 133%
of the federal poverty level, as per the Patient Protection and
Affordable Care Act). The company intends to offer managed care
services to individuals in the Los Angeles and San Diego counties
by Apr 1, 2014.
Around 1-2 million new individuals are expected to become
eligible for the Medi-Cal program under ObamaCare. Medi-Cal is
being administered by CMS and DHCS. Thus the aforementioned
contracts with the agencies should benefit Health Net by
expanding its clientele.
Health Net's strong operating performance helps it to invest in
the Medicaid and Medicare expansion under the Affordable Care Act
(ACA). The participation in California's Coordinated Care
Initiative also reflects the company's investment capacities.
However, customer attrition over the past few years has jolted
the company to some extent. The aforementioned deal is expected
to help the company recover on this front.
Presently, Health Net carries a Zacks Rank #4 (Sell). Some
better-ranked stocks in the insurance space include
CNO Financial Group, Inc.
American International Group, Inc.
). All three stocks carry a Zacks Rank #1 (Strong Buy).