NIB Holdings Limited’s shares up 12% and looking very healthy

Shares in private health insurance group NIB Holdings Limited (ASX: NHF) have risen 7c or 2.4% to trade at $3.05, after hitting an intraday high of $3.09.

NIB Holdings continues to reach for new highs following the recommendations made by the Abbott government’s National Commission of Audit (COA) recently.

The COA was established to review the performance and the roles of the Commonwealth government. One of the recommendations that was made for the Government to significantly save on costs was to exclude high income earners from Medicare (it would target individuals earnings more than $88,000 a year and families earnings in excess of $176,000 a year).

NIB Holdings and its shareholders would certainly benefit should the Government decide to act on the recommendation. More and more Australians would be forced to take out private health insurance which would see demand for NIB Holdings’ products soar. It would also benefit other companies such as Ramsay Health Care Limited (ASX: RHC), which is Australia’s largest private hospital operator.

Shares in NIB Holdings Limited have risen 12% in the last nine trading days and 31% over the last 12 months and look set to continue well into the future. In comparison, the S&P/ASX 200 Index (Index: ^AXJO) (ASX: XJO) has jumped just 4.5% over the last year.

An incredible long-term bet

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Motley Fool contributor Ryan Newman owns shares in NIB Holdings Limited.

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