The stock, a bellwether for the sector, was down nearly 4% in recent trading. Shares of rivals Humana, CVS and Centene were also down.
Health-insurance and healthcare giant UnitedHealth’s reported fourth-quarter net income of $5.46 billion and revenue of $94.4 billion, up from the year-earlier quarter’s earnings of $4.76 billion and revenue of $82.8 billion.
Adjusted earnings per share of $6.16 for the fourth quarter of 2023 beat analysts’ consensus estimate.
Investors—and analysts on UnitedHealth’s conference call—were largely focused on the insurance unit’s medical loss ratio, or the share of premiums spent on medical care. At 85%, it was higher than the roughly 84.1% that analysts had expected. Investors will worry that patients, particularly in the Medicare Advantage business, are using more services than expected and that pattern could linger into 2024.
UnitedHealth said the medical-service use was largely a continuation of issues it previously flagged, including higher use of outpatient cardiac and orthopedic procedures by people enrolled in its Medicare Advantage plans.
The company also saw an uptick in medical spending related to RSV, including visits to doctors for vaccinations that led to other care. Also rising were hospital admissions related to Covid-19, which were more costly than in the past and overall up by about 50% or more in December, compared to earlier in the fall.
UnitedHealth said it didn’t expect those issues to affect 2024 results, and it said it was confident in its plan design and expectations for next year. UnitedHealth stuck with its projection of a 2024 MLR of about 84%. Chief Executive Andrew Witty said none of the seasonal health-cost drivers “is durably impacting our outlook for 2024, so we feel very solid around our 2024 guidance point” for MLR.
