UnitedHealth Profits Rise as it Exits Health-Care Exchanges
April 18 2017 - 7:44AM
Dow Jones News
By Austen Hufford
UnitedHealth Group Inc. reported revenue and profits rose as the
company exited many of the Affordable Care Act's exchanges.
As the largest U.S. health-care insurer and the first to report
quarterly results, UnitedHealth is typically viewed as a bellwether
for the industry's earnings season.
Shares rose 2.3% as the company raised its annual revenue and
profit outlook. It now expects revenue of about $200 billion,
compared with $197 billion to $199 billion previously. It also
raised its forecast for adjusted earnings per share to $9.65 to
$9.85, up from $9.30 to $9.60 previously.
The insurer's medical-cost ratio -- the percentage of premiums
paid in claims -- increased as there was a health insurance tax
moratorium but was helped by lower levels of individual Affordable
Care Act business. The ratio rose to 82.4% in the quarter from
81.7% in the same quarter a year before.
The company said last year that it would pull out of nearly all
of the Affordable Care Act's individual exchanges.
About 12.2 million Americans signed up for health insurance
through the Affordable Care Act's exchange marketplaces by the Jan.
31 open-enrollment deadline, short of the 13.8 million-person
projection made by the Obama administration last October.
The Minnetonka, Minn.-based company reported net income of $2.17
billion, or $2.23 a share, compared with $1.61 billion, or $1.67, a
year before. Excluding certain items, UnitedHealth earned an
adjusted $2.37 a share, compared with $1.81 a year ago.
Revenue rose 9.4% to $48.72 billion.
UnitedHealthcare's withdrawal from Affordable Care Act
individual markets and a 2017 health insurance tax deferral reduced
consolidated revenues by about $1.6 billion and lowered the growth
rate by 4.1%, the company said.
The report comes weeks after House Republicans didn't pass their
long-promised health-care bill despite days of personal lobbying by
the president and Speaker Paul Ryan.
Write to Austen Hufford at austen.hufford@wsj.com
(END) Dow Jones Newswires
April 18, 2017 07:29 ET (11:29 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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