UnitedHealth Group Inc (NYSE: UNH) inches up in pre session on Monday after As the healthcare behemoth bets on “market-leading” membership growth in its federal government-backed health insurance programs, the corporation topped Wall Street estimates for quarterly earnings and upped its yearly prediction on Friday.
In the Medicare Advantage market, where private insurers provide an alternative to original Medicare, the federal government’s health insurance program for persons 65 and older or those with certain impairments, UnitedHealth is one of the market’s biggest players.
While health insurers prepare to lose some members in their Medicaid programs, which cover healthcare expenses for those with low incomes, as states eliminate pandemic-era requirements to keep members constantly registered, the industry bellwether’s positive view for Medicare provides some solace.
A third of the company’s health insurance business is composed of Medicare and Medicaid memberships. 570,000 new Medicaid enrollees and 655,000 new Medicare Advantage enrollees were enrolled during the quarter.
The company’s first-quarter profit above forecasts as a gradual rebound in non-urgent treatments helped cut medical expenses at its insurance segment.
Given the industry’s success in the fourth quarter, “we expected few surprises from a medical cost perspective in the quarter,” said RBC Capital Markets analyst Ben Hendrix.
The company’s medical cost ratio, which measures how much is paid out in claims as opposed to premiums, was 82.2%. According to Refinitiv IBES statistics, analysts had predicted an average of 82.54%.
UnitedHealth increased its adjusted 2023 profit prediction from $24.40 to $24.90 per share to between $24.50 and $25 per share, above both market forecasts of $24.94 and its previous estimate.
