Dive Brief:
- UnitedHealth reported first-quarter revenues of $48.7 billion in 2017, a 9.4% year-over-year increase from last year. This was more than the $48.27 billion that was forecasted for the quarter.
- The insurance giant, excluding ACA individual market offerings, reported the company has grown to 2.5 million customers in the past 12 months.
- United had decided to dramatically scale back it's ACA plan offerings this year, from 34 states to just three. "The smaller overall market size and shorter-term higher risk profile within this market segment continue to suggest we cannot broadly serve it on an effective and sustained basis," CEO Stephen Hemsley was quoted in Business Insider. "Next year we will remain in only a handful of states, and we will not carry financial exposure from exchanges into 2017. We continue to remain an advocate for more stable and sustainable approaches to serving this market and those who rely on it for their care."
Dive Insight:
UnitedHealthcare’s withdrawal from ACA Individual markets, combined with the 2017 health insurance tax deferral, reduced consolidated first quarter 2017 revenues by about $1.6 billion and lowered the revenue growth rate by 4.1%, the company noted.
Hemsley on a first quarter release call stated the company is optimistic on the rest of 2017 and engaging with state and federal level officials on affordability and the future of the insurance market. He stated the company is working under the assumption that health insurer tax will return in 2018, a move he said would raise premiums overall.
The individual revenues were largely flat year-over-year due to the ACA withdrawal and health insurance tax deferral effects, United noted. However, Medicare and retirement revenue grew by $2.5 billion year-over-year. In fact, the insurer seems to be doing well in public program offerings outside of the ACA. It's total public and senior business lines boasted 14.85 million customers, up from 13.1 million the same time last year.
"UnitedHealthcare served 8.7 million seniors with medical benefit products at first quarter end, growth of 12% year-over-year," the filling noted. "In the first quarter of 2017, the business served 760,000 more seniors, including 675,000 through employer-sponsored group and individual Medicare Advantage products."
United's stock has seen consistent growth in the last 48 hours following the released expectations of its Q1 results. Stock was trading at $164.99 per share at the open of business on Monday and closed at $167.20. The stock opened at $170.51 per share on Tuesday.
As the deadline for payers to make their rate filings nears, other insurers are anxiously awaiting any signal from President Donald Trump's administration about whether it will continue to provide cost-sharing subsidy payments.