UnitedHealth’s quarterly beat clouded by 2024 Medicare uncertainty
April 14 (Reuters) – UnitedHealth Group Inc (UNH.N) on Friday topped expectations for first-quarter outcomes however shares fell 3% after the corporate failed to deal with investor worries over excessive prices subsequent yr resulting from coverage modifications for government-backed medical health insurance plans.
U.S. well being insurers have been beneath strain since February when the federal government proposed new guidelines for an audit program to keep away from overpayment.
Reimbursement charges – or the federal government fee charges – for well being insurers for 2024 launched in March resulted in a 1.1% common lower, although higher than the preliminary proposal.
The charges decide how a lot well being insurers can cost as month-to-month premiums, plan advantages and income.
Rising regulatory associated issues, together with these round Medicare Benefit program, seem like weighing on shares at UnitedHealth and the trade, as uncertainty about revenue development past 2023 continues, mentioned Morningstar analyst Julie Utterback.
Medicare Benefit are provided by non-public insurers as an alternative choice to the unique Medicare – the federal authorities’s medical health insurance plan for folks aged 65 and older or these with sure disabilities.
Medicare and Medicaid memberships make up a 3rd of the UnitedHealth’s medical health insurance enterprise. The corporate mentioned it added 655,000 Medicare Benefit members and 570,000 Medicaid members within the quarter.
The corporate intends to drag again members now not eligible for Medicaid – plans that cowl prices for low-income people – to its business choices by extending annual enrollment durations for employers and enhance subsidies, together with plans with no month-to-month premium.
UnitedHealth raised its adjusted 2023 revenue forecast to between $24.50 and $25 per share, in contrast with its earlier estimate of $24.40 to $24.90 and market expectations of $24.94.
Excluding objects, it reported a first-quarter revenue of $6.26 per share, beating estimates of $6.13, helped by decrease medical prices and energy in its government-backed insurance policy.
Reporting by Khushi Mandowara and Bhanvi Satija in Bengaluru; Enhancing by Devika Syamnath
Our Requirements: The Thomson Reuters Trust Principles.
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