UnitedHealth Reports Flat Earnings

UnitedHealth Group Inc. earned about as much during the latest quarter as it did in the comparable quarter in 2010, but it is beginning to see the new federal medical loss ratio (MLR) rules affecting results.

UnitedHealth, Minnetonka, Minn. (NYSE:UNH), is reporting $1.271 billion in net income for the third quarter on $25 billion in revenue, compared with $1.277 billion in net income on $24 billion in revenue for the third quarter of 2010.

Stephen Hemsley, president of the health insurer, said today during the company’s earnings call that he is pleased with those numbers.

“Our results show continued growth,” Hemsley said. “People are purchasing more of our products.”

Utilization of health care was up a little, but less than the company had expected, and the actual cost of a unit care increased at a moderate rate, Hemsley said.

During the depths of the recession, group health plan enrollment levels sank throughout the industry because of the effects of layoffs. Growth in the number of employers offering coverage fell or stagnated at most carriers.

This quarter, at UnitedHealth, the number of commercial health products sold increased in both the group and individual markets, Hemsley said.

But UnitedHealth managers expect 2012 to be a more challenging year, Hemsley said.

“We expect unemployment to remain high and the rate of new of new business formation to be low,” Hemsley said. “We’re optimistic about our prospects for sustained, multi-year earnings growth.”

But “the challenges are considerable,” Hemsley said. “It is a difficult environment.”