Though Republicans’ push to repeal the Affordable Care Act has many health insurers anxious about the future, the leaders of the country’s largest for-profit payer are confident about its ability to adapt to the changing healthcare policy landscape.
On the company’s fourth-quarter earnings call Tuesday, UnitedHealth Group CEO Stephen Hemsley cautioned that “we have no better sense that anyone else” on what will happen to the healthcare reform law, but said he is optimistic about some of the policy prospects being floated.
“We see the opportunity for robust, state-based healthcare markets,” he said, featuring elements such as well-structured high-risk pools and "exchanges where states choose to sustain them."
United announced earlier this year that it would exit all but three states where it had offered ACA exchange plans, citing continuing deterioration of the financial performance of those products. Other major payers including Aetna and Humana then followed suit, sparking concerns about the marketplaces’ sustainability.
Now that it has largely withdrawn from the marketplaces, United does not believe its ACA-compliant individual business carries any financial exposure forward into 2017, David Wichmann, the company’s president, said on the earnings call.
Moving forward, Hemsley said United is focused on continuing to grow a diversified business that can weather any political climate.
“We remain an adaptable, innovative and restless enterprise,” Hemsley said, later noting that “we’ve maintained a presence broadly in the healthcare sector and have been consistent for some time.”
One major driver of that diversification has been Optum, the company’s rapidly growing healthcare services arm that experienced revenue growth of nearly 24% in 2016, according to the company’s earnings report (PDF). United expects to grow Optum’s capabilities even further with the recent $2.3 billion acquisition of Surgical Care Affiliates, an ambulatory surgery center and surgical hospital provider.
Overall for the fourth quarter, United posted adjusted net earnings of $2.11 per share on revenue of $47.5 billion. It also affirmed its 2017 outlook, projecting adjusted net earnings of $9.30 to $9.60 per share and revenues of $197 billion to $199 billion.