UnitedHealth increases earnings, revenue, enrollment

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."

To learn more:
- read the Wall Street Journal article
- check out the Associated Press article
- see the Bloomberg article

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