- Despite mounting losses from Obamacare, UnitedHealth Group reported second-quarter revenues of $46.5 billion, up 28% from a year ago. Profits grew 13% to about $3.4 billion, or $1.96 a share.
- Fueling the positive results was UnitedHealth’s Optum health services division, with a 51.5% surge in revenues to $20.6 billion. UnitedHealthcare’s revenues grew 14% to $13.5 billion.
- CEO Stephen Hemsley said the Q2 performance would allow UnitedHealth to “fully absorb” $200 million in 2016 losses from ACA-compliant individual products, according to Forbes.
Over the past two years, United Health has run up more than $1 billion in losses on Obamacare public exchanges. The company expects the government program to cut 2016 earnings by about $850 million, up from $475 million last year, Reuters reports.
The insurance giant plans to continue offering individual plans on the Nevada, New York, and Virginia exchanges in 2017, but is pulling out of most of nearly two dozen states where it currently participates. The carrier ended Q2 with about 820,000 ACA marketplace policyholders and esttimated to have around 750,000 policyholders by the end of the year, Modern Healthcare reports.
This is Optum’s second straight quarter of 50% or higher revenue growth. During the 2016 first quarter, revenues grew 54% to 19.7 billion — about 44% of UnitedHealth’s total business. Earnings from operations during Q2 were $1.3 billion, up from $864 million in the 2015 second quarter.
United Health’s Harken subsidiary — which announced plans to open eight new health centers in Atlanta and Chicago in 2017 — ended the quarter with nearly 48 million members, up more than 2.1 million a year ago, Modern Healthcare reports. Interestingly, the company is focused on the individual insurance market, both in the private sector and the ACA exchanges.
“We continue to invest to differentiate or products and services to better serve our customers and fuel future growth,” Hemsley said in a release.