The troubled economy continues to dog the nations largest health insurer, as UnitedHealth Group shed employer-based membership and posted a drop in year-over-year earnings. The Minnetonka, Minn.-based insurer reported 25.4 million employer-based members in March, a loss of 1.1 million commercial members since a year ago. However, the company added 1.2 million members to its Medicare and Medicaid plans year-over-year.
Profits fell 1% to $984 million from $994 million a year ago. First-quarter investment income dropped by 43% to $158 million, year-over-year. But revenue increased 8% to $22 billion compared with $20.3 billion last year.
Revenue for healthcare services was better than expected and rose by 9% year-over-year, largely driven by pricing increases and added members in Medicare and Medicaid plans, UnitedHealth said. The insurer was helped by a mild flu season, so medical cost trends were slightly better than a year ago.
Stephen Hemsley, president and CEO of UnitedHealth, said on an investor call that we continue to be appropriately circumspect about the economic environment and the impact it may have on our businesses.