UnitedHealth Group, Minneapolis, saw its first-quarter profits climb 41% on higher premiums and strong enrollment growth. The company's earnings report provides an initial glimpse of cost and premium trends for 2005; other major health insurers have yet to issue first-quarter results. UnitedHealth, the nation's second-largest health insurer, said its net income rose to $779 million, or $1.16 per share, in the quarter ended March 31, up from $554 million, or 88 cents per share, in the year-ago quarter. Revenue increased 34% to $10.89 billion. Enrollment reached 23.1 million members, up 14% from the year-ago quarter and 3% from Dec. 31, 2004. Medical costs, excluding UnitedHealth's AARP business, consumed 78.9% of premium revenue, down from 79.5% in the year-ago quarter and 79.1% in the fourth quarter 2004. Operating costs represented 14.9% of revenue, down from 16.2% in the year-ago quarter and 15.1% in the fourth quarter. UnitedHealth raised its 2005 earnings outlook to between $4.85 per share and $4.90 per share, up 10 cents from a forecast made in January. -- by Laura B. Benko
UnitedHealth reports 41% profit growth in first quarter
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