An IPO to Play the Aging Boomers
The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.
By Tom Taulli, InvestorPlace Writer
NEW YORK ( InvestorPlace) -- Back in the 1980s, U.S. companies moved away from defined-benefit pensions to defined-contribution, or 401(k) plans, essentially pushing the responsibility for retirement saving to employees. Of course, the main reason was to help reduce corporate costs.
Interestingly enough, the same trend is happening in the U.S. health care industry: Employers are moving away from group-based plans to individual arrangements.
That's creating opportunity for health care operators. Just take a look at Extend Health, which has the largest exchange for Medicare coverage and is preparing for a public offering. The lead underwriters include Morgan Stanley, Barclays and Wells Fargo. Extend Health's platform focuses primarily on programs like Medicare supplement, Medicare Advantage or Medicare Part D prescription drug coverage. These involve some federal subsidies and offer additional benefits, such as dental.
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