UnitedHealth shows strong revenue growth but $200 million more in ACA losses than predicted

UnitedHealth Group revenues grew 28 percent, or $10.2 billion year-over-year to $46.5 billion, but that was countered by greater losses in the exchange market than projected, according to a second quarter earnings report released Tuesday.

Losses in its Affordable Care Act-compliant individual product were $200 million beyond projections, the insurer said.

UnitedHealth Group has withdrawn its exchange product from numerous states.

While UnitedHealth realized higher medical costs in the ACA market, it said overall, medical cost trends remain well-controlled and consistent with expectations.

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UnitedHealth Group offers healthcare coverage and benefits through UnitedHealthcare, and technology and information health services through Optum.

While second quarter 2016 earnings from operations for UnitedHealthcare of $1.9 billion decreased 4 percent year-over-year, UnitedHealthcare reported revenue growth of 14 percent, or $4.5 billion year-over-year to $37.6 billion.

Optum revenues grew 52 percent to $20.6 billion.

UnitedHealthcare grew to serve over 2.1 million more people in the past year, including 320,000 more in the second quarter.

Growth was broad-based, the report said.

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In Medicare Advantage, UnitedHealthcare grew to serve 345,000 more seniors year-over-year, an 11 percent increase, including 20,000 seniors in the second quarter.

Medicare Supplement products grew 6 percent to serve 250,000 more people year-over-year, including 15,000 seniors in the second quarter.

UnitedHealthcare's stand-alone Medicare Part D program served 4.9 million people as of June 30, a decrease of 135,000 people year-over-year, reflecting a planned pull-back in Part D in 2016.

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UnitedHealth Group said its second quarter results reflect well-balanced growth and disciplined execution across its core businesses.

"Our businesses were privileged again this quarter to have grown to serve more customers and consumers. We continue to invest to differentiate our products and services to better serve our customers and fuel future growth," said Stephen J. Hemsley, CEO of UnitedHealth Group. 

Twitter: @SusanJMorse