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UnitedHealth’s second-quarter earnings soared 28% to $2.3 billion, or $2.32 per share, compared to $1.7 billion or $1.81 per share, in the year-ago period. Revenues jumped nearly 8%, or $3.6 billion, to $50 billion, putting UnitedHealth on pace to reach $200 billion in 2017 annual revenues for the first time.
The increase in revenue was able to overcome UnitedHealth’s withdrawals from several markets where the company sold individual coverage on public exchanges under the Affordable Care Act. The ACA withdrawals, combined with “the ACA health insurance tax deferral,” reduced second-quarter revenues by about $1.8 billion and the growth rate by 4.5%, the company said.
UnitedHealth has been among the major insurers, including
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But the company has focused on its other businesses, adding 2.5 million more people in its health benefits businesses. UnitedHealth’s Medicare business, in particular, saw major growth, soaring 17%, or $2.5 billion, to $16.7 billion in the second quarter.
“In the second quarter, the Company produced strong and balanced revenue growth, pacing to exceed the $200 billion mark this year,” UnitedHealth Group President Dave Wichmann said on the company’s Tuesday morning earnings call. “Medical costs were in line with expectations. Operating costs continued to be well contained.”
Meanwhile, UnitedHealth continues to see solid percentage earnings and revenue growth for its Optum segment, which provides pharmacy benefits management and technology services and also operates clinics and doctor's offices. Optum revenues were up nearly 10% to $2 billion.
The solid growth across the company figured in UnitedHealth management's decision to raise financial guidance for the rest of the year. The company now projects adjusted earnings to be in a range of $9.75 and $9.90 per share, which is an increase from a forecast earlier this spring of between $9.65 and $9.85 per share.