UnitedHealth has debuted a lower-than-expected 2021 earnings forecast partly due to the unknown extent of COVID-19’s affect on the healthcare system.
The nation’s largest medical health insurance supplier stated Tuesday that it expects to take a success within the new yr from therapy and testing prices tied to the pandemic. It believes it could see extra claims for issues like elective surgical procedures that individuals deferred this yr because the pandemic unfold.
The corporate additionally cited a possible affect from rising unemployment, which may cut back employer-sponsored medical health insurance enrollment.
The corporate stated it expects adjusted earnings to vary from $17.75 to $18.25 per share on income of between $277 billion and $280 billion.
Analysts count on, on common, earnings of $18.39 per share on $278.46 billion in income in 2021, in accordance with FactSet.
SVB Leerink analyst Stephen Tanal stated in a analysis observe that the preliminary forecast was “doubtless no worse than feared.”
Based mostly in Minnetonka, Minnesota, UnitedHealth Group Inc. runs a medical health insurance enterprise that covers about 48 million folks, largely in the US.
Its Optum phase additionally runs one of many nation’s largest pharmacy profit administration operations in addition to a rising variety of clinics and pressing care and surgical procedure facilities.
UnitedHealth often begins its annual forecasts conservatively, and CEO David Wichmann informed analysts in October to count on that for 2021.
He stated the corporate nonetheless has confidence in its long-term objective of 13% to 16% earnings progress, and UnitedHealth expects its underlying enterprise to be sturdy.
However Wichmann additionally famous that the pandemic’s affect stays an enormous potential problem. They nonetheless do not know the way it will have an effect on the financial system or a return to extra regular ranges of healthcare use.
Insurers like UnitedHealth reaped large income earlier this yr when the pandemic pressured sufferers to place off elective surgical procedures and different care that wasn’t deemed important. However well being insurers say these care ranges have since practically returned to regular.