Executives at UnitedHealth Group Inc. (NYSE:UNH) continue to see the Patient Protection and Affordable Care Act (PPACA) as a major source of future growth.
The executives talked about their PPACA exchange program today during a conference call the company held to go over fourth-quarter earnings with securities analysts.
UnitedHealth is reporting $1.5 billion in net income for the fourth quarter on $33 billion in revenue, up from $1.4 billion in net income on $31 billion in revenue for the fourth quarter of 2013.
One unit helped the Obama administration get the PPACA exchange program back on track in 2014, and Andy Slavitt, the former chief executive officer of UnitedHealth’s Ingenix unit, is now the acting head of the Centers for Medicare & Medicaid Services (CMS).
But the company’s commercial health insurance business, which includes its PPACA public exchange business, shrank.
UnitedHealthcare — the unit that oversees UnitedHealth’s commercial health insurance operations, is reporting $1.7 billion in operating earnings on $30 billion in revenue for the latest quarter, compared with $1.8 billion in operating earnings on $29 billion in revenue.
The company ended 2014 providing or administering medical coverage for 45 million people — 1 percent fewer people than it was covering a year earlier.
Enrollment in Medicare Advantage plans held steady, at about 3 million.
Enrollment increased 8.5 percent at its Medicare supplement plans, to 3.8 million, and 25 percent at its Medicaid plans, to 5 million.
Enrollment in fully insured commercial health plans fell 8 percent, to 7.5 million.
Stephen Hemsley, UnitedHealth’s president, said commercial health insurance revenue will increase this year.
“Growth in UnitedHealthcare’s small group and middle market group health business is also better than we had expected in a competitive but generally rational market landscape,” Hemsley said. “The self-funded employer business is positioned for stronger growth as well.”
But Hemsley and other company executives spent much of the conference call talking about their exchange business.
For three lessons drawn from the executives’ remarks, read on.