UnitedHealth Group reported higher revenue and profit in the first quarter of 2019 as it grew Medicare Advantage insurance membership while serving more patients in its care-delivery business, OptumHealth.
Minnetonka, Minn.-based UnitedHealth's insurance arm—UnitedHealthcare—covered 880,000 more people in the first quarter compared with the same period a year ago, bringing total membership to 49.7 million, up 1.8% year over year.
The insurer served more self-funded employers and Medicare Advantage members during the quarter, helping to boost its insurance revenue to $48.9 billion, an increase of 7.6%.
While UnitedHealth does much more than provide health coverage to Americans, insurance is still where it makes most of its money. The growing momentum behind transforming the U.S. healthcare system through various "Medicare for All" proposals, including a bill unveiled by Sen. Bernie Sanders earlier this month, poses a real threat to the company's revenue and bottom line. Sanders' plan would eliminate private insurance completely.
Sensing that threat, UnitedHealth CEO David Wichmann made sure to attack Medicare for All proposals on Tuesday morning while promoting the ability of the private sector to achieve universal health coverage.
"The wholesale disruption of American healthcare being discussed in some of these proposals would surely jeopardize the relationship people have with their doctors, destabilize the nation's health system and limit the ability of clinicians to practice medicine at their best," Wichmann said during the call with investment analysts to discuss first-quarter earnings.
"The path forward is to achieve universal coverage and it can be substantially reached through existing public and private platforms," he continued. "Meaningful progress in healthcare lies in national and state leaders continuing to work collaboratively with the innovative and proven private-sector solutions to achieve the goals we all want."
UnitedHealth has a lot to lose under an aggressive proposal like the one from Sanders. But moderate proposals that would allow more Americans the option to buy into public health insurance programs like Medicare could benefit insurers by boosting their Medicare Advantage rolls.
UnitedHealthcare is already the leader in Medicare Advantage. Its membership in that business line grew 8.5% year over year to 5.2 million, while revenue from that business rose 11.5% to $21.1 billion. Membership in UnitedHealthcare's commercial employer and individual segment grew 2.6% compared with the prior-year quarter to 27.5 million, with revenue from that segment up 5% to $14.1 billion.
UnitedHealthcare said its Medicaid revenue also grew 4.8% to $11.2 billion, even though it served 270,000 fewer people in that segment. But the insurer said it served more members with higher-acuity needs, including dual-eligibles and members in long-term services and supports programs.
Meanwhile, UnitedHealth Group's non-insurance business Optum recorded revenue of $26.4 billion, an increase of 11.7%. That was driven by OptumHealth, which provided more care delivery, behavioral health and health financial services in the quarter, the company said.
Optum's revenue surged 16.6% to $6.7 billion. And the PBM business—OptumRx—grew revenue 10.6% to $17.8 billion as it filled more prescriptions, including a higher mix of specialty drugs.
Across both its businesses, UnitedHealth Group reported revenue of $60.3 billion in the quarter ended March 31, an increase of 9.3% over the same period last year. Net income jumped 21.6% to $3.6 billion.