UnitedHealth Reports Q4 Earnings of $1.2B, Enrollment Increase in Medicare Prescription Drug Plan
UnitedHealth Group on Thursday announced fourth-quarter earnings of $1.2 billion, in part because of the recent acquisition of PacifiCare Health Systems and business from Medicare prescription drug plans, Reuters reports. Revenue increased by 47% from a year earlier to about $18.16 billion, the company said. Enrollment in Medicare prescription drug plans totaled 5.74 million as of the end of the fourth quarter, and enrollment in commercial health plans totaled 28.5 million, an increase of 200,000 from the third quarter, according to UnitedHealth (Reuters, 1/18). In addition, UnitedHealth reported that enrollment in Medicare Advantage plans increased by 260,000 in 2006. UnitedHealth had estimated that enrollment in Medicare Advantage plans would increase by 190,000 in 2007 but on Thursday reduced the estimate by half (Forster, St. Paul Pioneer Press, 1/19). UnitedHealth also reported that the company medical care ratio, a measurement of medical costs as a percentage of premiums, in the fourth quarter improved by 1.2 percentage points from the third quarter to 79.9% (Reuters, 1/18). For 2006, UnitedHealth reported earnings of $4.17 billion (AP/Houston Chronicle, 1/18). The fourth-quarter results included $50 million in cash and noncash charges related to issues with the company stock options program, and the 2006 results included a $100 million charge. UnitedHealth did not report per-share earnings or year-to-year or quarter-to-quarter comparisons because of the unreliability of past earnings statements (Wall Street Journal, 1/18). UnitedHealth reaffirmed 2007 earnings estimates of between $4.7 billion and $4.75 billion (Phelps, Minneapolis Star Tribune, 1/18).
This is part of the Morning Briefing, a summary of health policy coverage from major news organizations. Sign up for an email subscription.