UnitedHealth Group’s membership grew by more than 1 million in its health plans buoyed by a large increase in seniors signing up for privatized Medicare Advantage.
The company, which operates the nation’s largest health insurer in UnitedHealthcare and the Optum health services business, Thursday reported first quarter profits jumped by more than 40% to $5 billion, or $5.31 per share, compared to $3.6 billion, or $3.72 in the year ago quarter. Revenue rose 9% to $70.2 billion.
The results beat Wall Street’s earnings expectations and UnitedHealth executives said investors can expect the good news to continue with the company raising its earnings guidance for the rest of the year “based on initial 2021 business performance trends.”
The Covid-19 pandemic is still a factor that could hit UnitedHealth in 2021 given costs of treatment and diagnostic tests but the company for now is holding up well as it adds health plan members and grows its line of Optum health services businesses.
“The exceptional dedication of the people of Optum and UnitedHealthcare again defined this period,” Andrew Witty, who was promoted to be UnitedHealth’s chief executive in February, told analysts Thursday morning on conference call to discuss first quarter earnings. “They have adapted swiftly and creatively to demanding and rapidly changing circumstances, implemented new ideas and, importantly, remained focused on serving people exceptionally well.”
UnitedHealth now has nearly 49.5 million customers in its array of health plans compared to 48.4 million in the first quarter of last year thanks to an increase in numbers of seniors signing up to its Medicare Advantage plans. The company had 6.3 million members in its Medicare Advantage plans.
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“Of the 900,000 new seniors we expect to serve within Medicare Advantage this year, about 775,000 are in individual and group and 125,000 in dual-special needs offerings,” UnitedHealth chief financial officer John Rex told analysts.
UnitedHealth’s strong Medicare Advantage growth comes amid unprecedented competition given a record number of health plans are participating in a program that offers seniors the same benefits as traditional Medicare plus extras like preventative care and outpatient healthcare services.