UnitedHealth Revenue Up 28 Percent
Minnetonka-based UnitedHealth Group continues to grow at a rapid clip, despite plans to exit most of the states where it has offered health insurance through public exchanges.
The company’s reported revenue for the second quarter was $46.5 billion, an increase of 28 percent. The company’s second quarter revenue increase was more than $10 billion higher than the second quarter of 2015. The company’s net income of $1.76 billion for the second quarter marked an uptick of 11 percent compared to the same period a year ago.
The only apparent weak spot in the company’s business is the public exchange market. The federal Affordable Care Act created insurance exchanges where individuals can select health plans from competing insurers. UnitedHealth quickly expanded its exchange business, offering plans in 34 states for 2016.
On Tuesday, the company disclosed another $200 million in exchange-related losses during the second quarter. To date the company has lost more than $1 billion on the exchange business.
In a Tuesday conference call to discuss the company’s second quarter results, CEO Stephen Hemsley outlined its near-total exit from the exchange business: “Last quarter we updated you on our intent in 2017 to participate in only a handful of ACA-compliant individual markets, what we’ll refer to as the ‘exchange market.’ That effort is on track – and we do not expect any meaningful financial exposure on 2017 business from the three or fewer exchange markets where we currently plan to remain.”
The company previously stated that it planned to continue offering plans through public exchanges in Nevada and Virginia in 2017. The company first outlined troubles with the exchanges in November 2015 and has continued to provide updates in conjunction with earnings releases.
But the exchange losses are a blip in the larger financial picture for the nation’s largest health insurer.
Earlier this year, UnitedHealth Group was ranked number six on the Fortune 500, an annual survey of the nation’s largest publicly traded companies. The company reported revenue of $157.1 billion for 2015. UnitedHealth’s ranking marked the first time in history that a Minnesota company was among the 10 largest public companies in the U.S.