The leaders of UnitedHealth Group Inc. said last week they are not seeing any signs in insurance plan members’ medical habits that would lead them to raise their 2024 medical loss ratio forecast.
Speaking on a conference call after reporting Minnesota-based United’s fourth-quarter results, CEO Andrew Witty and CFO John Rex said a late-year uptick in care costs at the company’s core insurance businesses was due primarily to more seniors receiving vaccinations against respiratory illnesses, a trend they said won’t persist through this year.
“Seniors that hadn’t perhaps been to a physician in a little while […] visited their PCP, got an RSV vaccine,” Rex said. “In the meantime, their PCPs were able to close some additional care gaps as they were there.”
The increase in use among some senior patients (as well as a higher cost per COVID case than in previous years) contributed to United’s Q4 medical loss ratio coming in at 85 percent, which lifted the company’s full-year ratio to 83.2 percent and was above the 2024 outlook of 83.5-84.5 percent. That spooked some investors, who—despite United’s net earnings of nearly $5.7 billion beating expectations—pushed down the company’s share price (Ticker: UNH) by more than 3 percent.
Witty and his team last fall guided to the slightly higher MLR on the heels of several quarters during which seniors have increased their use of outpatient services as they catch up to care deferred during the depths of the COVID pandemic. Last Friday, he told analysts there’s nothing United leaders are seeing to suggest that there are other structural forces pushing United’s medical costs meaningfully higher.
“We’ve […] been investing significantly in increasing the numbers of early-warning signals,” he said. “And I can tell you we’re really not seeing any deviation from what we’ve been telling you all year in terms of the core activities across the system. The seasonal bumps at the end of the year, obviously, [are] a little different. But in terms of outpatient utilization, all of those lines of activity [are] very supportive of how we’ve stepped out for ’24.”
United’s top line for the fourth quarter grew 14 percent from late 2022 to more than $94.4 billion but its operating margin dipped to 8.1 percent from 8.3 percent. The company’s Optum Health group of healthcare services businesses grew by nearly 40 percent year over year to $24.5 billion and during the course of 2023 added nearly 900,000 people to value-based arrangements, under which it now cares for more than 4.1 million patients.