The nation's largest health insurer is off to a strong start to 2018, beating first-quarter expectations and adding more beneficiaries to Medicare Advantage plans.
UnitedHealth saw a 13.3% increase in first-quarter revenue over last year, according to a Tuesday filing with the Securities and Exchange Commission (SEC). Total revenue for the Minnesota-based insurer was $55.2 billion, including $4.1 billion in earnings from operations, up from a revenue of $48.7 billion in Q1 of 2017.
The company relied on a boost in elderly and retirement aged beneficiaries, with Medicare Advantage as the primary driver. United served 375,000 more seniors in the first quarter, including 330,000 in MA plans, which saw 10.6% increase over the first quarter of last year. Additionally, revenue for United's Medicare and Retirement division grew by $2.4 billion, or 14.3%.
However, UnitedHealth lost 195,000 beneficiaries through employer and individual plans, which the insurer said was expected.
“Through the intense focus our 285,000 colleagues bring to helping people live healthier lives and helping make the health system work better for everyone, we have grown to serve more people in more ways than ever, including through innovative uses of advanced technologies, data analytics, and modern clinical approaches that improve quality, lower cost and advance consumer and care provider satisfaction,” David S. Wichmann, CEO of UnitedHealth Group, said in a conference call.
The insurer also repurchased 11.6 million shares for $2.65 billion and paid $722 million in dividends, a 21.1% increase over the same time last year. Additionally, net earnings grew 28.7% over last year to $2.87 per share.
Based on the results, the insurer updated its net earnings outlook for the year to a range of $11.70 to $11.95 per share.
Additionally, the company’s healthcare services arm, Optum, has also thrived despite the uncertainty facing the healthcare sector. Optum revenue grew 11.1% to $23.6 billion in the first quarter.
The earnings report comes amid struggles in the Affordable Care Act marketplace, where some plans are seeing a 32% increase in premiums and the health insurance industry in general where states and the fed are trying to keep prices down and stabilize the marketplace.
Health insurers have also faced significant scrutiny for reaping large profits and revenues due to substantial premium increases, government premium tax credits and Medicaid expansions.