The Motley Fool: Humana Inc.: The Way To Play Medicare Advantage

If you want to play the graying of America, Humana (NYSE: HUM  ) is a name to consider. This managed care provider may be as close as you can find to a pure play on Medicare Advantage, as this program is more than two-thirds of the company's earnings base. At the same time, Humana has joined Aetna (NYSE: AET  ) and WellPoint (NYSE: WLP  ) as the most aggressive participants in the new public exchanges.

Humana apparently isn't afraid to take on risk, as Medicare Advantage rates have become a great deal more uncertain and nobody really knows how the new Obamacare-mandated exchanges are going to work out. Humana looks about as undervalued as Aetna or Cigna (NYSE: CI  ) and could be priced to generate some solid long-term returns, but investors have to be comfortable with the risks and uncertainties that go with such a large commitment to the Medicare Advantage program.

Read more here:
Humana Inc.: The Way To Play Medicare Advantage