Medicaid redeterminations loom with the likely end of the COVID-19 public health emergency, and with that many people could lose coverage, a major concern, UnitedHealth Group executives said on Friday.
Tim Spilker, chief executive officer of UnitedHealthcare Community & State, told investors on the company's earnings call Friday that the team is working from the assumption that the PHE will end in January is is currently scheduled, and then redetermination will resume in the first quarter of 2023. He said the insurer plans to release additional specifics around determinations next month.
Under the public health emergency, states were granted a higher matching rate in Medicaid if they did not drop anyone out of Medicaid or CHIP coverage. When the PHE ends, states will be left to determine who should remain eligible for the program, and experts have estimated the process could take a year. UnitedHealthcare is aiming to be proactive in working with state partners on redeterminations, Spilker said.
"This will be a big lift for states," Spilker said.
UnitedHealth Group CEO Andrew Witty said that the redetermination process would be a "huge setback" in terms of the progress made to boost coverage nationally. More people are covered by some kind of insurance now than ever have been, he said.
The redetermination cycle "could lead to a situation where folks get dislodged from their coverage," Witty said. The Kaiser Family Foundation estimates that 5.3 million and 14.2 million enrollees could lose Medicaid coverage when redeterminations resume.
UnitedHealth Group beat the Street with $5.3 billion in profit for the third quarter, according to the company's earnings report released Friday morning.
For comparison, the healthcare giant reported $4.1 billion in profit in the prior-year quarter. The company also surpassed Wall Street's expectations on revenue, with $80.9 billion in the third quarter, according to Zacks Investment Research. That's up 12% from $72.3 billion in revenue in the third quarter of 2021.
Through the first nine months of the year, UnitedHealth Group has reported $15.35 billion in profit and $241.4 billion in revenue. Through the first three quarters of 2021, UnitedHealth Group posted $13.2 billion in profit and $213.8 billion in revenue.
“The strength of our performance reflects the diligence and determination of our colleagues to improve people’s experience across the health care system and make high-quality care simpler, more accessible and more affordable,” said Witty in the company's earnings release.
UnitedHealth Group said the boost in revenue reflects significant growth at both UnitedHealthcare and Optum. At UnitedHealthcare, revenues grew 11% year over year to $62 billion. The number of people served by UnitedHealthcare has grown by 850,000 over the first three quarters, including 185,000 new lives added in the third quarter.
While this year's growth is led by expansion in community-based and senior offerings, UnitedHealth said it's also added 100,000 people to its commercial plans over the past six months.
Revenues at Optum, meanwhile, grew by 17% year over year, reaching $46.6 billion, the company said. That growth was once again led by Optum Health, which has been a consistent highlight for Optum over the past several quarters.
Revenue per customer at Optum Health grew 31% compared to the prior-year quarter, backed by both the expansion of value-based contracts and growth of its care delivery platforms. Revenues for Optum Insight, the company's data analytics arm, grew 18%, UnitedHealth said, and revenues at Optum Rx, the company's pharmacy benefit manager, were up 8%.
Thanks to its performance in the quarter, UnitedHealth Group boosted its guidance for the year to between $21.85 and $22.05 in earnings per share. In premarket trading, the company's stock price rose on the back of the strong third-quarter results.