Jan 17, 2017

UnitedHealth Group hits it big despite Obamacare meltdown

Even though UnitedHealth Group has lost more than $1 billion on individual Obamacare plans, the country's largest health insurer and services company is humming along just fine.

The big numbers: The conglomerate said Tuesday it had $185 billion in revenue in 2016 and expects almost $200 billion this year. That means UnitedHealth, by itself, controls about 5.5% of the U.S. health care economy. UnitedHealth's profit surpassed $7.2 billion, up from $5.8 billion in 2015.

UnitedHealth had a relatively small footprint in the Obamacare marketplaces before bailing on them earlier this year. The company has historically made most of its money from selling health plans to employers, and continues to do so. But Medicare Advantage is representing a larger piece of its pie, and executives expect Medicare membership will continue to grow this year.

But that's not all: Optum, UnitedHealth's subsidiary that sells data analytics and pharmacy benefits and owns providers, is a cash cow. In the fourth quarter, Optum's operating profit actually surpassed the UnitedHealthcare insurance arm. The company invested even more in Optum with its recent $2.3 billion takeover of Surgical Care Affiliates, a chain of surgery centers that specializes in profitable outpatient procedures.

Mum on the future: CEO Stephen Hemsley, known for being tight-lipped, said on an earnings call Tuesday he wouldn't speculate on what will happen to Obamacare, but he noted the company has routinely advocated for affordable coverage and a "simpler, state-based health care system." That could include high-risk pools and more catastrophic coverage with even higher deductibles — policies that Republicans have favored.

Go deeper

The long journey to herd immunity

Illustration: Sarah Grillo/Axios

The sought-after state of herd immunity — in which widespread outbreaks are prevented because enough people in a community are immune to a disease — is complicated by open questions about the effectiveness of a future vaccine and how COVID-19 spreads.

Why it matters: Unless a sufficient level of immunity is achieved in the population, the coronavirus could circulate indefinitely and potentially flare up as future outbreaks.

Judge rules all three defendants in shooting of Ahmaud Arbery will stand trial

Photo: Sean Rayford/Getty Images

A judge ruled on Thursday that all three men charged in the death of Ahmaud Arbery, a 25-year-old black man who was shot and killed in February Glynn County, Georgia, will stand trial, AP reports.

Why it matters: The video of Arbery's death was among several catalysts in the mass protests against racial injustice that have unfurled across the country and world over the past week and a half.

Remembering George Floyd

Photo: Kerem Yucel/AFP via Getty Images

With politicians, clergy and law enforcement in attendance on Thursday in Minneapolis, the family of George Floyd demanded recognition for his life well lived.

Why it matters: Floyd has become the latest symbol of police brutality after he was killed last week when a police officer held a knee to his neck.