UnitedHealth’s 2Q Profit Climbs 13 Percent

INDIANAPOLIS (AP) — UnitedHealth Group Inc. said Tuesday its second-quarter earnings rose 13 percent, as enrollment gains helped fuel revenue growth and consumers continued to moderate their health care system use.

The Minnetonka, Minn., insurer also hiked its 2011 profit forecast by 20 cents per share after raising it in the first quarter as well.

UnitedHealth’s enrollment grew 5 percent to 34.2 million compared to last year’s second quarter, led by gains in commercial coverage, which includes employer-sponsored and individual plans. That contributed to an 8 percent jump in revenue from UnitedHealthcare, the company’s largest segment.

Revenue also swelled 19 percent to $7 billion for UnitedHealth’s Optum segment, which offers health management, consulting and pharmacy services.

Health care use that has climbed at a slower rate than insurers expected when they set premiums has helped the industry in recent quarters, and UnitedHealth said it continues to benefit from that. Insurers have said they expected health care use to return to normal levels later this year, but some analysts disagree.

They say the slumping economy has helped rein in use, and health plans that make patients more aware of the cost of care also may be having an impact.

UnitedHealth earned $1.27 billion, or $1.16 per share, in the three months that ended June 30. That’s up from $1.12 billion, or 99 cents per share, in the same quarter last year. Revenue rose 8 percent to $25.23 billion.

Analysts surveyed by FactSet forecast earnings of 91 cents per share on $25.22 billion in revenue.

The insurer saw a $180 million gain in the quarter because claims left over from prior quarters came in lower than expected. UnitedHealth said that, plus the moderated health care use, helped offset estimated rebates it will have to pay under a health care overhaul rule that started this year.

The overhaul requires insurers to spend a minimum percentage of their premiums on medical claims and quality improvements or issue rebates to consumers. The goal behind the law is to ensure that a fair share of the premiums an insurer collects goes toward care and not profits or big salaries. Its impact on the sector has been muted so far.

UnitedHealth now expects 2011 earnings of $4.15 to $4.25 per share, up from its forecast in April for earnings of $3.95 to $4.05 per share. It expects $101 billion in revenue.

Analysts forecast earnings of $4.21 per share on $101.49 billion in revenue

Goldman Sachs analyst Matthew Borsch said in a research note UnitedHealth reported a strong, but not “outsized,” second quarter, and the performance should bode well for the rest of the managed care sector.

UnitedHealth is the largest publicly traded health insurer based on total revenue and the second-largest based on enrollment, trailing only WellPoint Inc. WellPoint and Aetna Inc. will report their second-quarter numbers July 27. Humana Inc. follows on Aug. 1, and Cigna Corp. rounds out the largest health insurers when it reports earnings Aug. 4.

UnitedHealth shares dipped 41 cents to $51.54 in premarket trading.

(© Copyright 2011 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed.)

  • Redneck Purist

    Queue the liberal anti-profit kooks now. “This is an outrage. How dare they make profits. They should limit their profits to 1 percent and give the rest to Barack Obama and the homeless”. Do I have that about right?

    • Anona Mouse

      I work for this company and I can tell you, the profit line is all they care about. I haven’t been to the doctor in years because my health insurance won’t kick in until I spend $3k first. And I only had my first raise in three years a year ago despite good reviews. Why? Because the company felt in these hard economic times, it needed to suspend raises to keep costs down. Unless your last name was Hemsley then, of course, the sky’s the limit.

      • Redneck Purist

        Anona Mouse, that’s what I’ve heard from others. I’m sorry for the rant and wish I could take it back actually. I’m currently being treated for menatl health issues (impulse control) and my deductible for seeing the psychiatrist is quite high too. I wish i could control these outbursts but don’t always take my medications. Sorry about that.

  • BeenThereDoneThat

    Hummm…I have worked there 10 years and have received raises every year except 2009 where no one got a raise. I remember when the insurance was better, but I also remember some employees abusing it. When I started bariactric surgery was covered. I knew two women in my group that had it and quit a few months later…also when I started one was granted 2 weeks paid vacation immediately, and when they realized they had to work…they took their vacation and quit. I do agree the current health plan is difficult to work with, but is mirrors the plans of many other companies. The truth is that the cost of medicine has risen significantly in the past several years. I know that 3K (you must be on a family plan)would seem insignificant if any major health need presented itself. A couple of years ago, when I needed major surgery, after the ded and OOP…I paid nothing for almost 7 months!

  • BeenThereDoneThat

    Also Anona Mouse…you know your yearly physical and all preventive visits are free..so why aren’t you seeing a doctor??

  • Citizen

    In 2006 United Health was investigated for SEC fraud. Stephen Hemsley replaced Dr. McGuire as the CEO. Dr. McGuire was given a golden parachute of $1.1 Billion–the largest in U.S. history at that time. The facts about this company speak for themselves.

    • Redneck Purist

      So someone accused them, and the SEC investigated and found nothing? Well, that’s good enough for me. They’re guilty! Big golden parachutes are as common as the cold. Especially for very large companies. What’s your point? BTW, speaking of fraud, did anyone ever ask for an investigation on when Obama as an Illinois Senator successfully lobbied for a million dollar grant for the U of Chicago hospital, after which his wife was suddenly given a 300k per year job as a “Diversity Consultant” at the hospital? Not a bad part time job, eh? Kinda funny that the hospital never refilled that position after she quit and Barack and Michele moved into the white hizzy. Isn’t that called influence peddling (or bribery or kickbacks) and isn’t it a federal crime???????

    • Hmmm

      Mrs. DFL Matt Entenza also walked away with millions.

  • They win, the rest of us lose

    And we wonder why our health care costs keep rising? As a small business owner who provides health insurance for my employees, I have to spend 4 – 6 weeks each year trying to find the least expensive, best value policy for my employees. It gets more difficult each year and I may have to stop offering health insurance to my employees because I just can’t afford the constant price increases.

  • The inside scoop.

    I’m a tax accountant with many clients from the health care industry.

    Obviously I can’t go into detail but I’ll tell you this: I don’t have a single client working in the health care field who isn’t making a very handsome salary which, in my opinion, is excessive for the position he or she is in.

    • Redneck Purist

      The only ones making more are tax accountants.

      • Larval stage liberal

        And Michelle Obama.

  • Corporate Greed

    There is no doubt as to why health care costs are going up so fast. If the politicians really wanted to reduce the size of “government”, they would figure out ways of paying these greedy health insurance companies less. The rest of us are doing more with less, why can’t they?

    • Econ 101

      Start your own. There’s nothing preventing you.

  • BeenThereDoneThat

    Corporate Greed…the reimbursement rates for private insurers go up because the reimbursement rates for Medicare and Medicaid keep going down. They pick up the slack. How does one expect a physical therapist …(needing 7+ years of education) to work for 45-50 an hour while a union auto worker will get 75 and hour. The patients know little about reimbursement rates…they just present their card and see the professional. This is on way that Obama is cutting Medicare costs, but what will happen, smaller providers will stop taking Medicare and Medicaid patients because the amout of privately insured patients is not large enough to pick up the slack.

    • Mike

      Your facts are incorrect. There are no union hourly employees making $75.00 an hour. When you add in benefits, they rise to that level. There also are no physical therapist making $45.00 an hour if you add in benefits. Nice try though.

      PS. Many union employees also work in dangerous and cancer causing environments. Physical therapist work in air conditioned environments.

      • Rico Suave

        Oh those brave heroic union workers……..Yawn

  • BeenThereDoneThat

    My facts are correct…and although phyical therapist MAY get benefits (many are self employed), none of them get the pension packages that union workers get.

    • Mike

      Well, if you’re going to use FACTS that way, I know union employees who make $6.85 an hour.

      Rico Suave-Gay porn extraordinaire- Good work, if ya can get it……….

  • Headsdowndespitethewhiners

    UnitedHealthcare was ranked highest in customer satisfaction in J.D. Power and Associates’ 2011 Employer Health Insurance Plan Study, based on feedback from 1200 self-insured employers nationwide. Among the national commercial health plans surveyed, we were first in every category – customer account servicing, employee plan service experience, product offering and benefit design, and problem resolution.

    The American Medical Association’s (AMA) fourth annual National Health Insurer Report Card rated us Number 1 in claims-processing accuracy among the seven leading commercial health insurers. The AMA also noted that UnitedHealthcare was the only commercial insurer to show improvement this year. Our accuracy rating was 40 percentage points better than the last place competitor, Anthem Blue Cross Blue Shield.

    OptumRx was honored by American Business Awards with The Stevie Award for Best Customer Service Department of the Year for 2011. OptumRx was competing for this award with thousands of other entrants from virtually every industry. They were recognized for their Voice of the Customer program that evaluates more than half a million after call surveys annually to help continuously improve service and customer satisfaction.

    In June, OptumInsight received the results of its most recent survey measuring client loyalty with a Net Promoter Score of 29 percent, up fifteen points from 2010 and above the industry average of just 15 percent. Clients with highest loyalty are designated as promoters, and they are leading OptumInsight towards profitable growth with their distinct buying and referral behaviors.

    • Democrat for Life

      yeah but you made a profit and that is bad in our country!


      Democrat for Life

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