UnitedHealth Group was one of the first insurers to raise a red flag about losses on Obamacare plans, and as the expected repeal of the health-reform law proceeds under the incoming Trump administration, CEO Stephen Hemsley said his firm is well-positioned to handle new policy changes that come out of Washington.
"We think we have been developing the kind of assets and capabilities to serve a health-care system, and can accommodate a variety of approaches," Hemsley told analysts on the company's fourth-quarter earnings conference call, adding "that has been our narrative with the policy community."
When asked whether he'd been in touch with President-elect Donald Trump, Hemsley would only say that at this point the company's contact had been at "a high level" and that it will continue to advance "a simpler, state-based health-care system," which presumably means undoing much of the complexity imposed by the Affordable Care Act.
UnitedHealth's profits in the fourth quarter exceeded analyst expectations. The health insurance and services giant posted earnings of $2.11 per share, compared to a Thomson First Call estimate of $2.07 per share, on revenue of $47.52 billion. Profits rose more than 50 percent from a year ago, when the company took a charge for losses on Obamacare exchange plans. The company does not expect exchange plans to impact results in 2017.
The Optum health services division continues to power the company's overall growth. Full year 2016 revenue rose 24 percent from year ago, despite a decline in its OptumRX pharmacy benefits management unit, while profits were up more than 32 percent.
The company said it plans to expand its medical services business to help gain better control on its insurance members' health-care costs. OptumCare is now providing medical care in more than two dozen markets, and the recent $2.3 billion deal to acquire Surgical Care Affiliates will help give it greater scale by increasing its medical care footprint to another 17 markets.