UnitedHealth's Medicare Advantage growth below expectations
UnitedHealth reaffirmed its 2023 earnings guidance and set its 2024 profit outlook, largely in line with forecasts, report says.
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UnitedHealthcare is setting 2024 Medicare Advantage enrollments below market forecasts.
UnitedHealthcare, the largest health insurer in the United States, set its 2024 MA enrollment predictions for less than 8.1 million next year, UnitedHealth Group said in its Investor Conference 2023.
This is below projections of 8.4 million Medicare Advantage members that analysts had forecast, according to Bloomberg.
"This appears to be a disappointment," TD Cowen analyst Gary Taylor wrote, according to Seeking Alpha. Taylor noted that the 2024 growth rate of 5% fell short of 11% growth year-to-date and that the company had expected its membership growth would exceed that of the overall market.
WHY THIS MATTERS
In its Investor Conference report, United Health said it expected its Medicare Advantage business to grow.
Medicare Advantage is serving an increasingly diverse, lower-income and clinically complex population, the company said. Seniors with chronic conditions are more likely to choose Medicare Advantage, and more than half of Medicare Advantage members have an annual income of less than $25,000. Medicare Advantage enrollment among minority populations has more than doubled since 2013, and now makes up more than 30% of Medicare Advantage membership.
THE LARGER TREND
Ahead of Investors Day, UnitedHealth reaffirmed its 2023 earnings guidance and set its 2024 profit outlook, largely in line with forecasts, the Seeking Alpha report said. Also, UnitedHealth's medical loss ratio for next year will reach 84% at the midpoint, compared to analysts' average estimate of 83%.
UnitedHealthcare said its report that it expects an 8% to 10% long-term revenue growth rate. The operating margin profile of each business is expected to continue to be generally stable over the long term.
Its Medicaid business is projected to grow as states expand managed coverage, especially for more complex populations.
Among UnitedHealthcare's businesses in total, it expects the medical care ratio to rise gradually over time as the company expands government programs, which typically come with a higher medical care ratio than commercial businesses.
Twitter: @SusanJMorse
Email the writer: SMorse@himss.org
