UnitedHealth Group, Minnetonka, Minn., saw its 2005 profits jump 28% because of an influx of new members and lower medical costs. The health insurer, which completed its $9.2 million acquisition of 3.3 million-member PacifiCare Health Systems last month, posted consolidated net income of $3.3 billion, up from about $2.6 billion in 2004. Revenue rose 22% to $45.4 billion. Including the addition of PacifiCare, enrollment climbed 20% to 26.9 million members. The total reflects the planned divestitures of 20,000 UnitedHealth members and 70,000 PacifiCare members in Arizona and Colorado, as required under a consent decree that the companies signed last month to gain merger approval from the U.S. Justice Department.
For the three months ended Dec. 31, 2005, UnitedHealth's consolidated net income rose 18% to $870 million, from $739 million a year earlier. Revenue rose 15% to $12 billion. UnitedHealth raised its 2006 per-share earnings projection to between $2.85 and $2.90, from a previous outlook of $2.82 to $2.85. Comparable per-share earnings for 2005 were $2.36. UnitedHealth, the nation's second-largest health insurer after WellPoint, is the first of its peers to post full-year results and is seen as a gauge of the industry's health.