There’s a large-scale shift happening right now as far as healthcare is concerned, and that means opportunities to capitalize are available now.
Certain companies are already making the necessary moves to become big players in this fast-growing field.
So what’s happening in healthcare, and who will lead the charge going forward?
Just last week, Starwood—a hotel and resort company—switched over 26,000 employees to a private health-care exchange from its existing in-house plan…
This sort of action is becoming more and more common, leading me to believe that this isn’t a fad or trend. This is a real shift in the way companies, including big-name companies, handle how they provide healthcare for employees.
Time Inc., DuPont, and IBM are some other large companies that have already at least begun the transition into private health-care exchanges for employees.
And Towers Watson (TW) is leading the charge…
TW became the No. 2 exchange provider for active employees and No. 1 for Medicare-eligible retirees after acquiring Extend Health 3 years ago.
And TW continues to grow. It expects to have 1.2 million people enrolled on its managed exchanges at the end of this fiscal year, which would be significantly more than the 800,000 figure it posted at the end of 2014.
Without getting too excited, some projections have TW shares climbing as much as another 20% on top of the 15% it’s already risen in 2015 (mostly due to a gap up in early February). The current share price for TW is about $130.
A new government-imposed tax could help TW realize these expectations…
The very real threat of a new tax, called the ‘Cadillac’ tax, could push more companies into taking the private health-care exchange route. Without getting into too much detail, doing so could save companies roughly $1,400 per employee in the very first year of the new tax.
The combination of the overall shift in healthcare and the political changes appears to be heading a solid rise for this fast-growing field, and TW certainly expects to be the leader of it.
The only question remain is, WHEN should you invest in TW?
That’s something I expect to discuss in the next issue of Midas Premium…
