Health insurance giant UnitedHealth Group’s first-quarter revenue exceeded forecasts after the company scaled back its participation in the Obamacare exchanges, according to the company’s earnings report released Tuesday.
The company’s first quarter revenues of $48.7 billion grew 9.4 percent, or $4.2 billion year-over-year. That increase came despite the loss of customers in the exchanges, which contributed to $1.6 billion in lost revenues.
Earnings from operations grew 15 percent to $3.4 billion from $3.2 the year before, with adjusted net earnings per share growing 31 percent to $2.37, the company reported.
UnitedHealth lost roughly 900,000 customers from the exchanges, but still managed to grow by 2.5 million customers through its Medicare, Medicaid and employer offerings. It the first quarter, the company had 1.5 million more customers, before losing 765,000 customers through the exchanges, for a net growth of 730,000.
UnitedHealth had warned last year that it expected to lose more than $800 million on the exchanges, so it scaled back its participation from 34 states to three. Other large insurers, including Aetna and Humana, reduced their participation in the exchanges last year as well. During the earnings call, David Wichmann, the company’s president, said that UnitedHealth remained committed to working with policymakers on the viability of the exchanges, and that it would be evaluating the sustainability of different marketplaces.
The future of the program, which allows most customers without employer or government insurance to buy a tax-subsidized plan, is uncertain as Republicans debate the details of repealing parts of Obamacare.
Insurers have been working with the Trump administration on changes to the exchanges, but also on convincing Congress to repeal the health insurance tax, which was deferred this year.UnitedHealth’s CEO, Stephen Hemsley, began the first-quarter earnings call by saying that affordability for customers could be most improved by repealing this tax. “We hope congress acts soon to repeal the health insurance tax,” he said. “We have no insight about whether that will or will not occur.” Hemsley said that without repealing the tax more costs would be shifted to customers in the form of higher premiums.
Members of the health insurance industry are slated to meet with officials from the Centers for Medicare and Medicaid later in the day Tuesday.
