UnitedHealth Group CEO Sees Covid-19 Impact Fading Next Year
(Bloomberg) -- UnitedHealth Group Inc. expects much of the negative impact from Covid-19 to fade next year, Chief Executive Officer Andrew Witty said Tuesday.
“Our Plan A assumption is that Covid impacts start to recede in 2022,” Witty said in an appearance at the Bank of America Securities 2021 Virtual Health Care Conference.
U.S. health insurers mostly reported robust earnings for the first quarter yet were conservative with guidance for the rest of 2021, citing uncertainty amid the pandemic.
UnitedHealth, which owns the largest U.S. insurer and a growing portfolio of care delivery businesses, has told investors it expects a net negative impact of $1.80 per share from Covid this year. Witty said he expects “the bulk” of that impact will be gone by next year, although he said it was too early to quantify how much and he couldn’t rule out surprises.
Shares declined about 0.8% at 9:42 a.m. in New York.
Health insurers saw medical costs drop during Covid as people shunned regular doctors’ visits and elective surgeries in the early stage of the the pandemic. A recent analysis from the Kaiser Family Foundation showed rising gross profit margins across the industry and a lower proportion of premiums spent on medical costs.
“Obviously in the last 18 months, the whole system’s been a little distorted by the Covid situation,” Witty said.
Among the effects from the pandemic, the company has cited increased Covid testing and treatment costs, offset by deferral of other care. UnitedHealth has previously said the majority of the negative impact this year would be seen in the second half.
UnitedHealth and other insurers waived some cost-sharing last year and rebated money to customers as typical medical care use dropped steeply early in the pandemic. Insurers have cautioned that they may see patients return to care with more advanced disease because of the deferrals.
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