UNH UnitedHealth Group Inc

By Austen Hufford 

UnitedHealth Group Inc. reported its 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 financial results, UnitedHealth is typically viewed as a bellwether for the industry's earnings season.

The company said last year that it would pull out of nearly all of the Affordable Care Act's individual exchanges.

UnitedHealthcare's withdrawal from ACA marketplaces and a 2017 health insurance tax deferral reduced consolidated revenues by about $1.6 billion, the company said. It reported serving 765,000 fewer people through the laws's individual marketplaces from a year ago.

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.

Shares rose 1.8% in premarket trading Tuesday as the company raised its annual revenue and profit outlooks. 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, from $9.30 to $9.60 previously.

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.

The report comes weeks after House Republicans failed to galvanize enough support to 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 09:20 ET (13:20 GMT)

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