Health Insurance Innovations Inc.'s initial reentry into Medicare affected its second-quarter results, but management continues to be enthusiastic about its shift of focus after seeing the business exceed its targets so far.
Since the first quarter ended, Health Insurance Innovations has made about $100 million of investments in strategic assets in the Medicare space, CEO Gavin Southwell said during a call to discuss second-quarter earnings. For the third quarter, the company is expecting 20% to 25% of its consolidated revenue to come from its Medicare business.
Southwell said Health Insurance Innovations is confident in its ability to execute and hit its targets on the Medicare business for the second half. He is expecting the investments that the company made to "bring with them a huge amount of expertise" in the Medicare space.
The top executive also touted the company's effort in diversifying its Medicare products and said the company's product portfolio will look "meaningfully different" in 2020 and beyond considering the longer-term benefits of the shift to Medicare.
Southwell said Health Insurance Innovations is fortunate to have a large individual business that has been "very resilient" and is still providing good growth in July and August. The large individual business will help generate significant cash flow to help with growth on the Medicare side, he added.
Chairman Paul Gabos said during the call that the board has not yet made any decision related to the strategic review recently initiated by the company's board. There is no assurance that the process would lead to any change of strategy or transaction, he added.