Author Topic: HIIQ - Health Insurance Innovations  (Read 3000 times)

ratiman

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HIIQ - Health Insurance Innovations
« on: May 12, 2016, 05:28:41 AM »
Health Insurance Innovations is an online/call center broker of temporary/supplemental health insurance with possibly the dullest name for a company on the stock market. Revenues are expected to grow 30-40% in 2016 and earnings at a rate of 40-55%. It currently trades at about 16x the midpoint of the earnings guidance. Revenues are expected to come in around $142M this year.

The  main competitor is ehealth, which is not growing nearly as fast. I'm not quite sure why HII is growing so much faster than eHealth, except that HII is newer and has newer technology? About two years ago it purchased Healthpocket for $30M, a kind of Kayak for health care plans, and then used the tech to create agilehealthinsurance.com, which grew very rapidly in the last year and is now catching up to ehealth's site. Healthpocket isn't growing so fast but Agile is growing very fast.

Here is a comparison of the two:

Ehealth 2016
Revs $200M
EV $175
Price $13.20
Earns 64c
PE 21
Rev Growth 6%


HII
Revs $142
EV $42M
Price $6.31
Earns 40c
PE 16
Rev Growth 30-40%

So it's pretty obvious that HII is MUCH cheaper than eHealth. I guess there is a risk that the users of these temp/supplementary plans could get hit this year with Obamacare penalties and decide next year to go on Obamacare? That's possible though it could go the other way and we could see reduced penalties. The O-Care penalties have to be a huge political loser, but health insurance is not something I want to know more about. Anyway, the comparison of the two makes plain that HII is a better bet, at least at first sight.
« Last Edit: May 12, 2016, 05:36:15 AM by ratiman »


ratiman

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Re: HIIQ - Health Insurance Innovations
« Reply #1 on: May 12, 2016, 06:23:27 AM »
A good overview of the market HII is serving.

https://www.facebook.com/AgileHealthIns/posts/455778501286042

siddharth18

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Re: HIIQ - Health Insurance Innovations
« Reply #2 on: May 12, 2016, 10:31:17 AM »
How sustainable is their business model? Seems they trick people into believing that their policies are ACA compliant...and once people find out it's not true, the company makes it very hard for them to cancel the policy.


http://www.yelp.com/biz/health-insurance-innovations-tampa

http://www.bbb.org/west-florida/business-reviews/health-insurance/health-insurance-innovations-in-tampa-fl-90072827/complaints
« Last Edit: May 12, 2016, 10:33:04 AM by siddharth18 »

ratiman

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Re: HIIQ - Health Insurance Innovations
« Reply #3 on: May 12, 2016, 11:53:16 AM »
How sustainable is their business model? Seems they trick people into believing that their policies are ACA compliant...and once people find out it's not true, the company makes it very hard for them to cancel the policy.


http://www.yelp.com/biz/health-insurance-innovations-tampa

http://www.bbb.org/west-florida/business-reviews/health-insurance/health-insurance-innovations-in-tampa-fl-90072827/complaints

All transactions like that at a call center are recorded, so if that is the business model, it wouldn't last very long. I worked at a call center and dealt with claims like that all the time, it's hard to rip somebody off when it's being recorded.

ratiman

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Re: HIIQ - Health Insurance Innovations
« Reply #4 on: May 13, 2016, 04:32:20 AM »
HII was essentially a shell that was sold at the IPO in early 2013 as an opportunity to profit from Obamacare. At the time the company had nothing but a few insurance carrier relationships and a couple of call centers. Without the Obamacare hype, no way would the underwriters have ever considered taking this public. The COO was 70 years old and the CEO was running what was effectively the family business. The shorts were immediately all over it.

But what's interesting is that it has turned into quite a well-run business in the last three years. In 2014 (about a year after the IPO) HII bought Healthpocket, which was built by two former eHealth employees. They built a newer, shinier version of eHealth. Then in 2015 HII hired Patrick McNamee, who had spent the last seven years as COO of Express Scripts and is way overqualified to run a $50M company. In other words, they replaced Jim Zorn with Mike Shanahan. OK, Mike Shanahan didn't work out so well, but he did get the Redskins to the playoffs. Right now the market doesn't seem to get that HII is not even close to the same company that came public three years ago.

Here is his bio:

  Mr. McNamee began his career at the General Electric Corporation, attaining increasing levels of achievement and responsibility over a 14-year period.  His first role at GE was in product management at GE Medical in development of radiology information systems, after which he was promoted successively to Chief Information Officer GE Power Plants, Chief Information Officer and General Manager of e-Business for GE Transportation, Chief Information Officer and Chief Quality Officer for NBC, and lastly as President and CEO of GE Surgery, a division of GE Medical Systems.

Mr. McNamee then took on the role of President and CEO of Physician Systems at Misys Healthcare Systems.  Most recently Mr. McNamee served as EVP & Chief Operating Officer of Express Scripts Holding Company, where he helped grow the company from $10 billion to more than $100 billion in revenues over a nine- year tenure. Mr. McNamee joined HII in June 2015 as President.

 
« Last Edit: May 13, 2016, 06:57:56 AM by ratiman »

ratiman

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Re: HIIQ - Health Insurance Innovations
« Reply #5 on: June 08, 2016, 04:08:29 PM »
 
Looks like Obama administration is going after HIIQ:

http://www.cnbc.com/2016/06/08/government-moves-to-curb-short-term-health-insurance-to-boost-obamacare-risk-pool.html


Federal officials Wednesday moved to improve the financial outlook of Obamacare insurance plans by calling for limits on increasingly popular short-term health plans that are siphoning off healthier customers from coverage sold both on government marketplaces and outside those exchanges.

The government's move would limit short-term health coverage for an individual to less than three months each year and bar renewal, as opposed to the almost 12-month term that some of those non-Obamacare-compliant plans are offering, along with a chance to renew.

The proposed rule, one of several moves announced Wednesday, is designed to nudge those healthier customers now in short-term plans into Obamacare plans sold on and outside of government-run exchanges, and improve their so-called risk pool, by balancing out less-healthy customers.

walkie518

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Re: HIIQ - Health Insurance Innovations
« Reply #6 on: April 15, 2019, 01:08:04 PM »
this is an old thread but the company might deserve a little attn?

addressable market only set to spike?

the Simple Health relationship seems to be a problem, but not a material enough % of business?

I suppose if the carriers underwrite poorly, HIIQ will suffer, but that doesn't mean when combined ratios turn bad for cash flow HIIQ will be impacted other than possible loss of clients?

healthcare in general has taken a hit, this one might be leveraged to a return to historical valuations as well as an asset light model?