UnitedHealth Group reports $60B revenue increase in third quarter
UnitedHealth Group, which owns the nation’s largest private health insurer UnitedHealthcare, reported revenues of $60.4 billion during the third quarter of 2019––a 6.7% jump compared to the same three-month period in 2018.
The growth was largely driven through its health services business, Optum, where revenue grew 13.3% year over year to $28.8 billion for the third quarter of 2019. Year to date, earnings from operations at Optum are up 15%.
UnitedHealthcare also saw major growth over the past year, adding 415,000 more people to its commercial and Medicare Advantage membership. The increase led to revenue growth of 4.7%, or $2.2 billion, for $48.1 billion in the quarter, according to the latest earnings release.
The company was also bullish on its competitiveness in the MA marketplace as supplemental benefits continue to expand.
“We like our offerings are stocking up in the marketplace and we're optimistic about what seniors will see as they begin their annual enrollment as early as this morning,” Brian Thompson, CEO of UnitedHealthcare Government Programs, said during the company’s earnings call Oct. 15.
Executives were also excited about President Trump’s recent executive order that sought to expand MA down the line.
“We're really pleased with what we heard in the executive order, some of the elements inside that or what we've been advocating for to make the program even stronger for the seniors in America today,” Thompson said. “Flexibility around product design for specific conditions, the use of incentives to drive better adherence and better health and certainly just promoting MA and driving better education and awareness for the benefits that it can provide, all were inside that executive order.”
With the strong quarterly earnings, the company raised its full-year guidance to adjusted net earnings in the range of $14.90 to $15 per share.
One weak spot for UnitedHealth Group was its Medicaid and CHIP offerings, which saw revenues decline $384 million during the third quarter of 2019, while membership dropped 665,000 people year over year “due to proactive market withdrawals” and states managing their programs, according to the release. Medicaid was a noted headwind for the company during the earnings call Tuesday.
“The financial performance of our Medicaid business continues to improve, while the pacing is slower than originally anticipated, as we work closely with our state partners to ensure Medicaid rates are set to sustainable levels,” John Rex, executive vice president and CFO, said during the call.
Amy joined TriMed Media as a Senior Writer for HealthExec after covering home care for three years. When not writing about all things healthcare, she fulfills her lifelong dream of becoming a pirate by sailing in regattas and enjoying rum. Fun fact: she sailed 333 miles across Lake Michigan in the Chicago Yacht Club "Race to Mackinac."