New York, NY, United States (4E) – UnitedHealth Group Inc. reported on Thursday a 7.8 percent drop in first-quarter earnings, though the health insurer saw a year over year growth in membership.
UnitedHealth is the first major managed-care provider to release results for the latest period, the first-ever quarter that reflected the Affordable Care Act. The health insurer’s performance is expected to get hit by the government’s planned reductions in funding for Medicare Advantage and the health law’s other provisions.
UnitedHealth said profit stood at $1.1bn, or $1.10 per share, lower than $1.19bn, or $1.16 per share, a year ago. Revenue jumped 4.5 percent to $31.7bn.
In the latest quarter, UnitedHealth’s per-share earnings were reduced by almost 35 cents because of Affordable Care Act-related provisions and newly effective taxes as well as the reduction in government spending, also known as the sequestration.
UnitedHealth’s growth in membership had helped the company improve its results recently. At the end of the latest quarter, the number of people who had health coverage through the company’s UnitedHealthcare insurance arm reached 44.7 million, from 42 million in the previous year and 45.4 million at the end of last year.
Revenue for UnitedHealthcare insurance inched up 3.6 percent to $29.25bn. Optum, the company’s health-services business, saw revenue improve by 29 percent to $11.2bn.