UnitedHealth Group (NYSE: UNH) posted a higher-than-expected fourth-quarter profit as enrollment grew across its plans and Americans used fewer medical services. If these fourth quarter results are any indication, it doesn't seem the health reform law or the struggling economy have hurt the health insurance industry.
UnitedHealth, whose diversity and size make it a bellwether for the industry, said its fourth-quarter net income rose 10 percent to $1.04 billion, or 94 cents per share, from $944 million, or 81 cents per share, a year earlier, according to Reuters.
The insurer generated $22.2 billion in revenue for the fourth quarter, up from $20.2 billion for the same quarter in 2009. Annual revenue was $87.44 billion, up 7.5 percent from $81.34 billion in 2009, reports the Hartford Courant.
Revenue was boosted partly because the company added 1.2 million customers to its health insurance business last year for a total of 37 million by the end of 2010, including 1 million people who bought insurance across the company's Medicare and Medicaid programs and 200,000 people who enrolled in commercial plans. Moreover, the Courant notes that UnitedHealth spent 80.6 cents of every premium dollar on medical expenses for the year.
UnitedHealth and other insurers have been helped in recent quarters from lower medical claims costs as people use fewer health services, a trend linked to the soft economy. In the fourth quarter, UnitedHealth's medical claims in relation to its revenue was the lowest in five years, notes the Wall Street Journal.
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