UnitedHealth Net Up on Stronger Enrollments -- Update

By Ben Fox Rubin 

UnitedHealth Group Inc. on Thursday said its fourth-quarter income improved 15%, as the health insurer's enrollments grew and its Optum segment's revenue soared.

UnitedHealth reported a profit of $1.43 billion, or $1.41 a share, up from $1.24 billion, or $1.20 a share, a year earlier. Revenue improved 8.2% to $31.12 billion.

Analysts polled by Thomson Reuters had projected earnings of $1.40 a share on revenue of $31.07 billion.

Insurers are facing a sea change as a result of the rollout of the new health law and launch late last year of consumer exchanges. But in the run-up to the launch of the exchanges, health-insurance companies have benefited, as the tough economy kept many patients away from the doctor's offices and hospitals. Insurers have also helped drive down costs by directing certain patients to lower-cost treatments, when possible.

UnitedHealth, the biggest managed-care company by revenue, has improved its results recently through membership growth. At the end of the latest period, UnitedHealth served 88.2 million people compared with 89.7 million in the prior quarter and 83.7 million a year earlier.

Revenue at the company's UnitedHealthcare insurance business rose 7.3% to $28.81 billion. Revenue from Optum, its information- and technology-based health-services business, grew 35% to $10.2 billion.

UnitedHealth's consolidated medical-care ratio, which reflects the portion of insurance premiums used for patient care, rose to 81.2% from 80.5% a year earlier.

Total operating costs rose 7.5% to $28.67 billion.

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