UnitedHealth Adds Customers as Health Insurer Raises Outlook
(Bloomberg) -- UnitedHealth Group Inc., the U.S.’s biggest health insurer, added almost a million new customers in the first quarter, as its sales and profits grew from a year prior.
- The company raised its 2019 adjusted earnings forecast to $14.50 to $14.75 a share, up 5 cents from its January forecast.
- UnitedHealth added 880,000 new customers for a total medical membership of 49.7 million. Much of the growth came from its business selling health insurance services to employers and individuals as well as its Medicare line. The gains offset a slight decrease in the Medicaid business. First-quarter premium revenue grew by $3.43 billion, or 7.8 percent, from a year prior.
- The company is the first major U.S. health insurer to report each quarter, and investors typically look at the results as a sign of what’s to come. UnitedHealth’s medical care ratio (how much of each premium dollar it spent on medical costs), rose 60 basis points to 82 percent -- a sign of potentially higher expenses across the industry.
- UnitedHealth’s Optum business, which sells pharmacy services, runs medical clinics and offers consulting and data services, is its most profitable. It had a 7.1 percent operating margin in the first quarter, compared to 6 percent in the insurance unit.
- The shares were up 1.6 percent to $234 in trading before the market opened in New York. Health insurance stocks have been soft this year as investors have worried about new policy changes from Washington.
- Read the company’s full results here.
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