UnitedHealth posted very positive first quarter results as its net income, revenue and enrollment all increased, compared to this time last year.
The company on Thursday said that its first-quarter net income rose 3 percent, as it earned $1.39 billion, or $1.31 per share, which is an increase from UnitedHealth's first quarter last year when it earned $1.35 billion, or $1.22 per share. Revenue also grew 7 percent to $27.28 billion, reported the Associated Press.
Membership increased 3 percent, growing from 34 million to 35.6 million people enrolled in UnitedHealth's medical plans. That growth was boosted by UnitedHealth's purchase of XLHealth Corp., a privately-owned sponsor of Medicare Advantage health plans, Bloomberg reported.
UnitedHealth also reduced its medical-care ratio, which dropped from 81.4 percent to 81 percent a year earlier, according to The Wall Street Journal.
Overall, UnitedHealth reported a $530 million first-quarter gain from leftover claims that came in lower than expected. Last year, the insurer saw a $440 million gain, the AP noted.
The better-than-expected first quarter earnings helped UnitedHealth overcome an increase in operating costs. Last year, the insurer said it would invest $115 million into its pharmacy-benefits unit, OptumRx, as it brings in-house the drug benefits business it has been outsourcing to Medco Health Solutions. "They're adding staff; they've expanded their mail-order operation," David Windley, a Jefferies & Co. analyst told Bloomberg. "They've talked explicitly about spending quite a bit of money to convert the current Medco contract."