(Photo: Michael Nagle/BB)

Executives at UnitedHealth Group Inc. don’t sound all that excited when they talk about being in health insurance — but they are excited about the impact of the Affordable Care Act (ACA) health insurer tax.

UnitedHealth executives emphasized today, during a conference call with securities analysts, that the company is getting less of its revenue from health insurance. That means that whether the ACA health insurer tax is in effect or not in a given year has less of an effect on UnitedHealth’s earnings, executives said.

(Related: 3 Quick Facts About UnitedHealth’s Q3 Earnings, for Agents)

But John Rex, the company’s chief financial officer, said the effect of the return of the health insurer tax cost the customers with affected coverage about $2.6 billion over the course of the year.

“That’s still a very significant number for any company, and a burden for our customers,” Rex said.

David Wichmann, the Minnetonka, Minnesota-based company’s chief executive officer, said the tax costs the average couple of Medicare coverage about $500 per year, and the average family with small-group health plan coverage about $500 per year.

“Our view is that outcome is unacceptable,” Wichmann said.

Wichmann said UnitedHealth will continue to lobby for the repeal of the tax.

The drafters of the ACA legislation included the health insurer tax because they thought the ACA individual and employer “shared responsibility” coverage requirements would bring commercial health insurers windfall profits.

Congress has put moratoriums on the tax in some years and let it take effect in some years. A moratorium is in effect for 2019, but the tax is now set to return in 2020.

Earnings

UnitedHealth held the conference call to go over earnings for the fourth quarter of 2018.

UnitedHealth is the first company in the life, annuity or health insurance markets to post fourth-quarter earnings.

The company is reporting $3.2 billion in net income for the quarter on $58 billion in revenue, compared with $3.7 billion in net income on $52 billion in revenue for the fourth quarter of 2017.

The company ended the year providing or administering health coverage for 49 million people, up from 47 million people a year earlier.

Here’s what happened to the number of people with specific types of UnitedHealth health coverage:

  • Commercial risk-based plans: 8.5 million (up from 8.4 million).
  • Self-insured group health plans administered by a UnitedHealth unit: 18.4 million (down from 18.6 million).
  • Medicare Advantage: 4.9 million (up from 4.4 million).
  • Medicare Supplement: 4.55 million (up from 4.45 million).
  • Managed Medicaid: 6.5 million (down from 6.7 million).
  • International: 6.2 million (up from 4.1 million).

Resources

Written documents related to the company’s earnings are available here.

A replay of the conference call will be available here. (At press time, the replay was available at 1-800-753-5207, but not yet on the web.)

— Read UnitedHealth Wants Association Health Plan Detailson ThinkAdvisor.

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