Health insurer UnitedHealth Group’s (NYSE:UNH) quarterly profit beat estimates on Wednesday, helped by growth in its Optum unit that manages its pharmacy benefits business, and a slower-than-expected recovery in demand for optional health care postponed due to Covid-19.
Large U.S. health insurers, including UnitedHealth, benefited from lower health care spending in the first half of the year, which more than offset pandemic-related additional costs.
The companies, however, signaled a rebound in demand for the deferred services in May and June and projected higher medical costs in the second half of the year.
UnitedHealth reported a medical loss ratio - the percentage of premiums paid out for medical services - of 81.9%, better than last year’s 82.4%. Analysts were expecting loss ratio of 83.55%.
The results reflect costs from the voluntary consumer and customer assistance initiatives undertaken by the company to help with COVID-19 testing and treatment, UnitedHealth said.
Revenue from its Optum unit, which manages drug benefits and offers health-care data analytics services, rose 21.4% to $34.92 billion.
UnitedHealth reported adjusted earnings of $3.51 per share, beating estimates of $3.09 per share.
Said CEO David Wichmann, "The people of UnitedHealth Group continue to deliver more innovative and modern solutions for customers, physicians and consumers, while responding to the needs of the people and communities affected by the pandemic.
“We’re encouraged to see those we serve respond to the incentives we offered to safely seek care as the health system continued to recover in the quarter."
UNH shares lost $8.81, or 2.7%, to $322.61.
