2 weeks Ago
UnitedHealth Group’s first quarter profits eclipsed $6 billion but the nation’s largest health insurer said 2025 earnings would be lower than expected due to rising costs of caring for seniors in its Medicare plans. UnitedHealth, which operates the giant health insurer UnitedHealthcare, reported Thursday what it called “heightened care activity indications” which were “far above” what the company planned for in its Medicare Advantage business. Medicare Advantage plans contract with companies like UnitedHealthcare to provide benefits for seniors.
Such plans, which provide benefits for more than half of the nation’s Medicare beneficiaries, have been hit hard by rising costs in the last two years in part because seniors have a pent up demand for healthcare following the COVID-19 pandemic when many patients delayed treatment. “Heightened care activity indications within UnitedHealthcare’s Medicare Advantage businesses, which became visible as the quarter closed, far above the planned 2025 increase which was consistent with the elevated levels in 2024,” UnitedHealth Group said Thursday morning in a statement that was a part of its first quarter earnings report. “This activity was most notable within physician and outpatient services.
” Thus, UnitedHealth lowered its “2025 performance outlook established in December 2024 to net earnings of $24.65 to $25.15 per share and adjusted earnings of $26 to $26.
50 per share.” That compares to a forecast affirmed in January that said net earnings of would be “$28.15 to $28.
65 per share." Still, the company reported net income of $6.3 billion in the first quarter compared to a loss $1.
4 billion in the first quarter of 2024. Revenues grew by nearly $10 billion to $109.6 billion in the first quarter.
Thursday’s first quarter earnings report comes as UnitedHealth and its employees are still grappling with the fallout from losing the head of its UnitedHealthcare business, Brian Thompson, who was shot dead on the street in New York City December 4 before he was to attend the healthcare giant’s annual investors meeting. That business has since seen management changes and a new CEO, who was named earlier this year. And earlier this week, a man with a gun was arrested on UnitedHealthcare’s campus in Minnesota.
Thompson’s death unleashed a barrage of scrutiny on health insurer denials of medical care and certain other business practices from social media trolls and industry critics including some in Congress who say they’d like to see reform. UnitedHealth Group, which also operates the large healthcare services business Optum, said rising costs also spilled over onto that business. Optum owns an array of physician practices and outpatient healthcare operations including clinics, surgery centers and other facilities.
“Unanticipated changes in the profile of Optum Health members impacting planned 2025 reimbursement due to unexpectedly minimal 2024 beneficiary engagement by plans exiting markets.,” the company said. “In addition, a greater-than-expected impact to current and new complex patients from the ongoing Medicare funding reductions enacted by the previous administration.
”.
