UnitedHealth Group Medicare Advantage: $9 Billion Businessby Denise Early on Jul. 29, 2010, under Health
Reuters reported that UnitedHealth Group Inc has posted a higher-than-expected second-quarter profit, helped by growth in its Medicare Advantage plans for elderly and low-income Americans.
For the second quarter (April, May, June), UnitedHealth said net income (profit) increased to $1.12 billion from $859 million a year earlier. Revenue rose 7.4 percent to $23.26 billion.
UnitedHealth is the biggest provider of Medicare Advantage plans, and its Medicare Advantage membership rose 17 percent from 2009 to 2010. UnitedHealth’s Medicare Advantage revenue grew 13 percent to $9 billion.
Revenue in its health plans for low-income Medicaid recipients jumped 21 percent to $2.5 billion. The company’s Medicaid membership increased 16 percent.
UnitedHealth kicked off what is expected to be a strong earnings reporting season for health insurers. However, Wall Street enthusiasm for the industry is expected to be tempered as investors question whether its performance will be sustainable under the new U.S. healthcare reform law.
Wall Street is concerned about the hit to profits next year from new regulations that will mandate how much insurers must spend on medical costs. Government regulators are also fighting back against proposed premium rate increases by the insurers.
Longer term, healthcare reforms are designed to provide insurance coverage for an additional 32 million Americans, many through the Medicaid program for low-income Americans and UnitedHealth is well-positioned in this market.
NOTE: UnitedHealth Group companies in Arizona are: Secure Horizons Medicare Advantage plans, Evercare Medicare Advantage plans, and APIPA Medicare Advantage plans and AHCCCS health plans.