NEW YORK ( TheStreet) -- The health business in the U.S. undergoing transition thanks to the changes created by the Affordable Care Act, aka Obamacare. How can savvy investors capitalize? Buy into companies helping the new health care economy function.
The open enrollment period for consumer buying health care coverage for next year ends on Feb. 15, meaning that companies poised for success in this market will still be attractively priced. So now is the perfect time to invest.
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Here's where the opportunities lie.
Private Health Care Exchanges Providers
Similar to the government-regulated health care exchanges where consumers can shop for health care plans, private exchanges are marketplaces of health insurance where a broad range of products (dental and life insurance, for example) are offered to consumers.
These private market places are being offered by different providers including insurance companies Aetna (AET) and Cigna (CI) as well as broker/consultant networks Towers Watson (TW) and AonHewitt (AON) . These players provide a marketplace for their respective network of individuals and small groups to customize their benefit packages. Many of these companies outsource the private exchange infrastructure and stock it with their own customized products, including medical plans.
Technology Platforms Providing Exchange Infrastructure
Technology platform companies develop the health care exchange infrastructure by providing cloud software and data analytics solutions to clients such as the insurers listed above, brokers and consultants and also large employers looking for a custom exchange.
Up to 40 million consumers will be using private health care exchanges by 2018, according to Accenture, representing tremendous growth for a market that did not exist a few years ago. To compare, three million Americans are enrolled in private health insurance exchanges for their 2014 employer benefits. That's a lot of infrastructure to develop in the next four years.