UnitedHealth to settle rising unemployment rate: Insurer Hit

 

Thursday, Apr 23,2009, 3:49:44 PM   Click:

April 22 - The grim employment picture is put a stop to the UnitedHealth Group payroll tax that employers and workers lose their health insurance, but the insurer still managed to deliver better than expected first-quarter profit on the strength of the government supported health plans.

The Minnetonka-based insurer lost 1.15 million members over the years in its core that unemployment rose to peaks and employers to traditional health insurance high deductible plans. Growth in the plans financed by the Government, such as Medicaid and the high, high and offset the revenue losses in the heart of business, the company said Tuesday in announcing earnings.

But the traditional plans are much more lucrative. Enrollment in commercial plans declined by 4.3 percent during the first quarter ending March 31. During the same period, enrollment in the projects supported by the government administered by UnitedHealth was up 21 percent.

Net income for the quarter decreased 1 percent to $ 984 million. Earnings per share of 81 cents beat analysts' estimates of 68 cents per share. Turnover of $ 22 billion was up 8 percent over the year.

A year ago, the company has put in place strategies to focus on local markets. It tries to be more responsive and improve service to consumers, physicians, hospitals and insurance brokers. The effort pays off, "said Stephen Hemsley, UnitedHealth's chief executive, but there is more work to be done to strengthen relationships with physicians and


hospitals.

Dynamic compensation of the company in this area is a weak economy and high unemployment. For the year, UnitedHealth expects a decline of 1.5 million members in its employer-sponsored health plans, the unemployment rate is expected in 10 per cent.

"We continue to be adequately informed about the economic environment and its impact on our business in May," said Hemsley.

The growth of senior public health and road maps in 2009 revenue increased $ 86 billion, he said.

UnitedHealth fell $ 1.41, or 5.82 percent, to close at $ 22.80 Tuesday.

Sit Investment Associates in Minneapolis, once the stock sold, but all of that by the end of last year that the company relies on government programs has increased its core activities and erosion.

"It is hard to get excited about an area of growth in a market where the government decides what you do to repay and what you can cover," said Matt Loucks, a portfolio manager Sit . It's not a very good business model, in my opinion. "

Julie Forster can be reached at 651-228-5189.