UnitedHealth Group’s profits eclipsed $4 billion in the fourth quarter thanks to a strong performance in the company’s health insurance business led by Medicare growth.
UnitedHealth said net income increased to $4.19 billion compared to $2.35 billion in the fourth quarter of 2020 as the healthcare giant’s diverse portfolio of health insurance plans and its Optum medical care services overcame the ongoing costs from treating and testing patients with Covid-19. Revenues rose 12% to $73.7 billion in the quarter compared to $65.5 billion a year-ago.
“Total people served by UnitedHealthcare grew by 2.2 million in 2021, led by continued strong growth in Medicare Advantage and dual special needs plans and expansion in the broader Medicaid market,” the company said in its earnings report for the fourth quarter and full year 2021, which was released Wednesday. “Including Dual Special Needs Plans, Medicare Advantage membership grew to serve more than 900,000 additional people in 2021 with strong gains in both individual and group offerings.”
The additional health plan enrollees helped the UnitedHealthcare health insurance business revenues grow 12% to $56.4 billion in the fourth quarter with more of the same projected this year. “We enter ’22 having generated strong consumer growth in Medicare Advantage and saw further progress in Medicaid and growing momentum in our commercial business,” UnitedHealth Group chief executive officer Andrew Witty said on a call with Wall Street analysts to discuss company’s earnings.
Medicare Advantage plans contract with the federal government to provide extra benefits and services to seniors, such as disease management and nurse help hotlines with some also offering vision, dental care and wellness programs.
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UnitedHealth’s performance in Medicare Advantage is important given the intense competition with established rivals including Humana, Cigna, Anthem and CVS Health’s Aetna expanding into new markets while several smaller health insurers and startups have entered the business in recent years as well.
UnitedHealth’s Optum business also performed well with revenue growth of 14% to more than $41 billion in the fourth quarter.
Witty said the health insurer and provider of medical care are already working on ways to package health benefits and services to sell to employers as well as government clients.
“Strong collaboration between Optum and UnitedHealthcare and with our many external partners helped us grow in serving both commercial and government markets, unlock new innovation, introduce integrated products and services to the marketplace and significantly increase the number of people benefiting from value-based models of care,” Witty told analysts.