UnitedHealth Says Lower Medicare Advantage Payments Forced Smaller Profit

The news about UnitedHealth's profits forced the insurer's share prices lower.

Los Angeles Times: UnitedHealth's Shares Dip On Small Increase In Quarterly Profits
The Minnetonka, Minn., company said government funding cuts to Medicare Advantage plans were one drag during the quarter, but it said overall medical costs remained in check (Terhune, 10/17).

The Wall Street Journal: Tough Prognosis For Health Insurers
Health insurers got a first taste Thursday of the challenges awaiting them under the new federal health law, with UnitedHealth Group Inc. issuing a cautious outlook for 2014 due to funding cuts tied to the law. Under the health law, insurers like UnitedHealth and Humana Inc. will reap lower payments for additional services beyond the basic fee-for-service Medicare program (Martin, 10/17).

Reuters: UnitedHealth Sees Medicare Payment Shortfall, Shares Drop
UnitedHealth Group Inc on Thursday predicted a tough year in 2014 because of government funding cuts to its private Medicare business, dragging down its shares and those of its competitors. UnitedHealth Chief Executive Stephen Hemsley said that "underfunding" of Medicare Advantage plans for the elderly cannot be fully offset by the company's other healthcare business. UnitedHealth, the largest U.S. health insurer, has previously said that it plans to withdraw from some markets in 2014 because of these cuts (Humer, 10/17).

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