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UnitedHealth Launches 'Free' COVID-19 Test Program in 4 Days

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What You Need to Know

  • UnitedHealth has announced test kit partnerships with Walmart and Rite Aid.
  • The company says COVID-19 hospitalization rates are about the same as a year ago but that case severity seems to be lower.
  • Reductions in spending on routine care during COVID-19 surges continue to offset increases in pandemic-related spending.

UnitedHealth has already joined with Walmart and Rite Aid to set up a network for distribution of “free” home COVID-19 test kits, Andrew Witty told securities analysts Wednesday.

Witty, CEO of the Minnetonka, Minnesota-based health insurance giant, said the company started the test kit distribution program just four days after the Biden administration announced the program rules.

The efforts by Walmart, Rite Aid and other companies to help UnitedHealth bring the program to life “speak well to the capabilities of the private sector to respond and solve problems on behalf of the country,” Witty said. “I want to express thanks to the folks at Walmart and Rite Aid, and other companies who will join shortly, in getting this preferred network up so quickly.”

The Biden administration has told health insurers and health plans to work with drugstore chains and other retailers to set up preferred test kit distribution networks that will make test kits available to enrollees at no out-of-pocket cost.

Insurers must also cover up to eight kits per person per month when the insureds buy kits outside of the insurers’ preferred test kit distribution networks.

Witty has a unique perspective on the COVID-19 pandemic and U.S. pandemic response efforts, because his company helps provide coverage, pharmacy benefits management services or both for more than 1 in 6 Americans.

The Earnings

Witty spoke on a conference call UnitedHealth organized to go over its earnings for the fourth quarter of 2021 with the analysts. The company streamed the call live over the web and has posted a recording on its website.

The fourth quarter ended Dec. 31, 2021.

UnitedHealth is reporting $4.2 billion in net income for the quarter on $74 billion in revenue, up from $2.2 billion in net income on $65 billion in revenue for the fourth quarter of 2020.

The company’s UnitedHealthcare health insurance unit increased its operating earnings to $2.1 billion, from $396 million a year earlier.

UnitedHealth care ended the fourth quarter providing or administering health coverage for 51 million people, up from 48 million people a year earlier.

The New COVID-19 Surge

Witty emphasized that UnitedHealth still has questions about what the current COVID-19 surge will do.

Results for the fourth quarter were in line with expectations, but in the last two weeks of the quarter, “omicron really started to show its face,” Witty said. “We’re still learning exactly what the impacts of that are.”

John Rex, the company’s chief financial officer, said that, at this point, COVID-19 hospitalization rates are about as high as they were a year ago.

A year ago, the United States was facing a COVID-19 wave that killed more than 100,000 people.

This time around, executives said, cases appear to be milder and hospital stays seem to be shorter.

UnitedHealth sees the new surge reducing use of ordinary primary care by about 10% and specialist care by more than 10%, and that has helped offset costs related to efforts to prevent, detect and treat COVID-19, executives said.

Witty said the nature of the pandemic may affect the new home COVID-19 test kit distribution efforts.

“I think It’s inevitable that we’re going to see outages as we go through these geographic kind of surges that have characterized this pandemic,” he said.

Medicare Advantage

Humana warned investors earlier this month that its Medicare Advantage plan enrollee growth rate may be slower than it had predicted, in part because it believes competitors are using very low prices for coverage to win market share.

Executives said UnitedHealth has added about 800,000 Medicare Advantage plan enrollees, and that enrollment growth has been in line with expectations.

The Medicare Advantage plan market “has been highly competitive for a number of years,” said Tim Noel, the head of UnitedHealth’s Medicare business.

UnitedHealth is happy with state of the Medicare Advantage plan market and its position within that market, Noel said.

Witty noted that the company’s Medicare Advantage plan distribution network is similar to what it’s been like in earlier years, but bigger.

“We’re super grateful for all of the support we get from agents and brokers and others who help us get the message across to seniors who are looking at Medicare Advantage as an option,” Witty said.

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Andrew Witty (Photo: Chatham House)