Officials blame part of the downturn on reductions in federal funding for the Medicare Advantage program and new taxes resulting from the health law.
The Wall Street Journal: UnitedHealth's Profit Falls Amid Health-Law Changes
UnitedHealth Group Inc. on Thursday said its first-quarter earnings fell 7.8%, hurt by government cuts to Medicare Advantage programs and new taxes resulting from the Affordable Care Act. The health insurer also reported an increase in members year over year but a decrease sequentially. UnitedHealth is the first major health insurer to report its results for the latest quarter, the first period to reflect the Affordable Care Act. Planned reductions in government funding for Medicare Advantage and other provisions of the health law were expected to affect the managed-care provider's performance this year. UnitedHealth reported a profit of $1.1 billion, or $1.10 a share, down from $1.19 billion, or $1.16 a share, a year earlier. Revenue rose 4.5% to $31.7 billion (Stynes, 4/17).
The Associated Press: UnitedHealth’s 1Q Profit Tumbles 8 Percent
UnitedHealth Group’s first-quarter net income slid 8 percent as funding cuts to a key product and costs imposed by the health care overhaul dented the health insurer’s performance. The Minnetonka, Minn., company said Thursday the overhaul and government budget cuts added about 35 cents per share in costs during the quarter. The federal law aims to provide coverage for millions of uninsured people, but it also trims funding for Medicare Advantage plans, changes how insurers can write their coverage and adds an industry-wide tax, which is not deductible (4/17).
Marketplace: A Bill Of Health For Insurance Companies
Big insurance companies report quarterly earnings over the next two weeks, starting with United Healthcare today. Thanks to new customers brought in by the Affordable Care Act, 2013 was a good year for health insurance companies. The extended deadlines, which ended just this week, may provide more good news: More enrollment, more premiums, more revenue. Now comes the hard part (Weissmann, 4/17).