Analysts will be looking for reaction from the insurance and hospital players this earnings season. Though, United CEO Stephen Hemsley was reluctant to weigh in with specifics when asked about the health reform process earlier this month.
"We hoped to be engaged. Engaged means that you're really talking about solutions," said Hemsley said at the Goldman Sachs CEOs Unplugged Conference in New York City, adding, "We are not policy people.
"We need to keep a lens on practical affordability as part of the innovation cycle because if we are creating things that society or people can't afford, what's the point?" he said.
The health insurer is expected to post earnings per share of $2.07 on revenue of $47.13 billion, according to a consensus estimate from Thomson Reuters.
On the insurance side, if United reports moderate medical costs, as expected, that should be bullish for the rest of the health insurance sector.
"Health care utilization remains muted as the penetration of high deductible plans continues to increase … while elective surgeries and procedures continue a strong mix shift to the lower priced hospital outpatient… settings," wrote Leerink Partners analyst Ana Gupte, in a note to clients.
It was at this time last year when United began to size up its participation in the Affordable Care Act exchanges. By April, the insurer announced that it would be pulling out, after projecting more than $500 million in losses.
By the end of last summer, Aetna, Humana, and Blue Cross Blue Shield insurers in a number of states announced they, too, would sharply curtail coverage on the exchanges, and raise prices to stem losses.
Those moves should provide an earnings tailwind this year for the insurers, making for more favorable comparisons, say analysts. Current enrollment numbers also bode well.
"The exchange risk pool is on track to be more stable than initially feared, both in overall numbers and demographically, " which should be a positive for plans, said Evercore ISI analyst Michael Newshel in a note to clients.
Beyond GOP reform
While the Republican health reform push is creating tremendous uncertainty about the individual market, analysts see potential upside for health insurers with the repeal of ACA health insurance taxes and the prospect of less regulation in the fast-growing private Medicare health insurance market for seniors.
"Repeal and replace offers upside to Medicare Advantage stocks in particular, as deregulation within CMS offers rate predictability," said Leerink's Gupte.
Analysts will also focus on the continued growth of United's Optum health services unit, which recently announced a $2.3 billion deal to acquire out-patient surgery provider Surgical Care Associates.
Mizuho analyst Sheryl Skolnick said the acquisition could be another game-changer for the health services provider as it strives to provide its commercial and Medicare clients greater value for care.
"What we see is the opportunity to move its transformation model forward: surgeons were a missing piece," wrote Skolnick in a note to clients. "So it's not just 'scale,' but insight and the ability to move the … model through from primary to surgical care."
UnitedHealth reports before the opening bell, and will hold an investor call at 8:45 a.m. ET.