UnitedHealth Group Inc. is looking forward to the birth of the new Medicare drug plan.[@@]
The Minnetonka, Minn., managed care company is reporting $809 million in net income for the second quarter on $11 billion in revenue, up from $596 million in net income on $8.7 billion in revenue for the second quarter of 2004.
The company ended the quarter providing or administer health coverage for 23 million U.S. residents, up from 20 million a year earlier.
In recent years, many managed care companies have boasted about their lack of involvement with the struggling Medicare managed care plan program.
But the laws and regulations governing the program have changed dramatically. The government has relaxed pricing restrictions, lowered barriers that once discouraged preferred provider organization plans from entering the Medicare managed care program, and added a Medicare prescription drug benefit.
Dr. William McGuire, UnitedHealth’s chairman, said today during a conference call that the company will be spending $75 million and hiring 600 people to get ready for the new Medicare prescription benefit program when it becomes available in 2006.
“This is important,” McGuire said.
All UnitedHealth businesses increased customer counts during the second quarter, and the Ovations division, which focuses on retirees, sold drug discount cards to 50,000 new customers during the quarter, McGuire said.
The popularity of the drug discount card “bodes well for the new Medicare subscription benefit,” McGuire said.
Other notes from the conference call:
- McGuire said he expects no increase in medical cost trends this year or next.
- Enrollment in the company’s “consumer driven” health plans, which combine high deductibles, personal health accounts and a variety of other incentives and features, stood at more than 1 million June 30, up from 220,000 a year earlier, McGuire said.