UnitedHealth Group Inc., the biggest U.S. health insurer by sales, reported fourth-quarter profit that beat analysts' estimates as revenue climbed in its technology and consulting group.
Adjusted earnings rose to $1.55 a share, according to a statement. That topped the $1.50 average estimate of analysts in a Bloomberg survey. The Minnetonka, Minn.-based company has beat estimates in every quarter since January 2009.
The company's shares rose 2.5 percent to $108.21 in midday trading.
UnitedHealth and other U.S. health insurers have been adjusting to changes under the Patient Protection and Affordable Care Act. The law imposed new taxes and fees on the industry, and created new state-based marketplaces to sell subsidized health coverage. The company estimated that Obamacare negatively affected net earnings by $1 billion in 2014.
Insurance membership under the law was increasing faster than forecast, said Jeff Alter, UnitedHealth's head of employer and individual insurance, said on a conference call today. Enrollment for UnitedHealth Affordable Care Act plans this year will be 500,000 or more by Feb. 15, he said.
Revenue in UnitedHealth's Optum division rose 23 percent, boosted by sales to clients such as the North Shore-LIJ Health System in New York. Optum manages drug benefits and works with hospitals, employers and governments to lower health costs.
"One of the major drivers for United over the last couple of years and couple of quarters has been their Optum business," Jason McGorman, an analyst at Bloomberg Intelligence, said in an interview before earnings were released. "They've been growing that business at a pretty health rate."
The company reiterated its previous forecast for 2015 earnings per share of $6 to $6.25.
UnitedHealth is still deciding how it will deal with a new generation of hepatitis C medicines that can cost $1,000 a day.
UnitedHealth is negotiating with manufacturers AbbVie Inc. and Gilead Sciences Inc., said Dan Schumacher, chief financial officer of UnitedHealth's insurance unit, without giving any more details. Anthem Inc., Aetna Inc. and other insurers have announced coverage plans for the drugs in the last month.
"Rest assured, we are all over this," Schumacher said on a conference call with analysts this morning. He said drug price increases in specialty medicine were already built into the company's cost forecasts.