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Last up on our list of Rocket Stocks is
CI), the health insurer for more than 13 million Americans. Technically, Cigna's biggest business isn't insuring its subscribers. Instead, it manages policies for employers in exchange for a fee. That seems like a small distinction, but in fact, it means that the risks of a health insurance plan fall on the shoulders of employers rather than Cigna's balance sheet. Instead, the firm earns a pre-set fee for its expertise.
Scale matters in the health insurance industry, and even though Cigna's 13 million members put it on the smaller side of the insurance spectrum, they're big enough to provide some advantages. For instance, Cigna's size has a big impact on its ability to negotiate with health care providers, who bill their services at a preset rate to Cigna members. More members means more pricing power.
New Obamacare provisions are set to go into effect in a month - and that means that insurers could be feeling the crunch very soon as insurance services start to go through an exchange designed (in theory, anyway) to lower costs for consumers. Cigna's focus on employer-sponsored plans should spare it from the impact that many of its peers are likely to see on their income statements.
To see all of this week's Rocket Stocks in action, check out
the Rocket Stocks portfolio at Stockpickr.
-- Written by Jonas Elmerraji in Baltimore.
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