Tax bill boosts UnitedHealth's earnings, 2018 outlook

Stock prices up close
UnitedHealth on Tuesday adjusted its full-year guidance to $12.30 to $12.60 per share. (Image: Getty/BeeBright)

Thanks in part to the GOP tax bill, UnitedHealth Group reported a fourth-quarter profit that beat analysts’ estimates and raised its full-year earnings outlook.

The company, which includes insurer UnitedHealthcare and the rapidly growing healthcare services division Optum, said its adjusted net earnings per share grew to $2.59 in the in the fourth quarter. That’s higher than the consensus estimate of $2.51 and up 23% year over year.

UnitedHealth adjusted its full-year guidance to $12.30 to $12.60 per share, up from the $10.55 to $10.85 that it projected in November. It also reported that its 2017 net earnings of $10.72 per share included a one-time, non-cash deferred benefit of $1.22 per share tied to the tax overhaul Republicans passed in December.

Free Daily Newsletter

Like this story? Subscribe to FierceHealthcare!

The healthcare sector remains in flux as policy, regulation, technology and trends shape the market. FierceHealthcare subscribers rely on our suite of newsletters as their must-read source for the latest news, analysis and data impacting their world. Sign up today to get healthcare news and updates delivered to your inbox and read on the go.

Overall, the company expects that corporate tax reform will boost its earnings and cash flows by $1.7 billion in 2018, CEO David Wichmann said during a call with analysts. UnitedHealth will use some of that money to make investments that will help further the company’s growth, he said.

Looking ahead on the policy front, Wichmann noted that UnitedHealth continues to push for a multiyear deferral of the health insurance tax, which resumed this year after a one-year moratorium. He also added to his previous comments about how President Donald Trump’s executive order on healthcare might affect the company’s insurance business.

RELATED: UnitedHealth could benefit from Trump's executive order

To Wichmann, the aspect that “has the most momentum” is the move to expand association health plans, since UnitedHealth already has experience offering such plans.

In general, Wichmann said, UnitedHealth supports the Trump administration’s goal of giving consumers greater access to lower-cost health insurance options. However, he noted that the new policies that emerge from Trump’s executive order “must be designed carefully” so that that both enhance coverage options and avoid destabilizing existing insurance markets.

Suggested Articles

CVS Health is joining forces with UPS to test several different applications for drone delivery, including sending products directly to patients.

A federal judge won't give the Trump administration more time to repay hospitals affected by $380 million in site-neutral payment cuts.

Cleveland Clinic and telehealth company American Well are launching a Cleveland-based joint venture telehealth company.