UnitedHealth Group’s earnings topped $5 billion in the second quarter thanks to strong performance from Optum Health Services and UnitedHealthcare health insurance plans.
UnitedHealth said net income rose to $5.2 billion from $4.27 billion in the second quarter of 2021, as the health giant’s diverse portfolio of health insurance plans and its Optum medical services delivered strong performances. Revenue rose 13% to $80.3 billion in the quarter, compared with $71.3 billion a year ago.
Friday’s earnings report signaled a solid performance for the rest of the year, given that UnitedHealth’s management decided to raise its 2022 earnings forecast.
“Based on first-half performance and growth expectations, the company increased its guidance for full-year net income to $20.45 to $20.95 per share and adjusted net income to $21.40 to $21.90 per share.” , the company said. “Growth in the second quarter was balanced across the company’s businesses, driven particularly by continued strong expansion of people served at UnitedHealthcare and value-based arrangements at Optum Health.”
UnitedHealth’s UnitedHealthcare health insurance business has grown in all areas from commercial to government-subsidized insurance, such as the increasingly popular Medicare Advantage plans, which contract with the federal government to provide seniors with additional benefits and services, such as disease management and hot nurse helplines with some also offering vision, dental and wellness programs.
“The total number of people served by UnitedHealthcare has grown by more than 600,000 in 2022, including 280,000 in the second quarter,” the company said. “Growth was driven by UnitedHealthcare’s community-based and senior offerings.”
The additional health plan enrollees helped UnitedHealthcare’s health insurance business’ revenue grow 12% to $62.1 billion in the second quarter.
Meanwhile, Optum’s second-quarter revenue jumped 18% to $45.1 billion “with double-digit growth in every business led by Optum Health,” the company said. UnitedHealth’s Optum business includes a range of healthcare services that include surgery centers, clinics, physician practices and its pharmacy benefit management (PBM) company, OptumRx, which reported a 10% increase in revenue in the second quarter to $24.8 billion.
On a call to discuss second-quarter earnings, UnitedHealth CEO Andrew Whitty announced a company effort that could lower prescription drug costs for certain customers.
“Beginning in 2023, there will be no copay — zero out-of-pocket — for several critical drugs on our preferred drug list for fully insured UnitedHealthcare group members,” Whitty said of UnitedHealthcare’s initiative, which will be supported by OptumRx.
“Medications such as insulin, epinephrine for severe allergic reactions and albuterol for acute asthma attacks are included,” Witty. said. “While this is an important step for the health of vulnerable people, greater and longer-term containment of drug costs depends on manufacturers restraining and reducing the list prices of their products – which is the main driver of costs.” We will continue to use our capabilities to do everything we can reduce out-of-pocket costs for consumers by building on previous actions, including point-of-sale discounts.”
UnitedHealth said nearly 8 million people are enrolled in fully insured UnitedHealthcare plans. Of those, more than 689,000 “will benefit from this new cost share,” a company spokesman said.