UnitedHealth Earnings Call Insights: Outlook for Medicare Advantage and Continued Earnings Growth

UnitedHealth Group Inc (NYSE:UNH) recently reported its fourth quarter earnings and discussed the following topics in its earnings conference call.

Outlook for Medicare Advantage

Matthew Borsch – Goldman Sachs: My questions on the outlook for Medicare Advantage and just hearing your comments about the pragmatism of the implementation so far. When you look at all of the provisions that are impacting Medicare Advantage in 2014 and ’15 in the interest of ‘parity’ that seemingly without regard to the, the supplemental coverage that you are providing for low and moderate income seniors. Do you think those provisions as it stands today are manageable or do you think that they will need to be revised as you move through the next three years?

Stephen J. Hemsley – President and CEO: I would say if you are basically saying that as it exists today. We would always have an appetite for things that would offer let’s say more flexibility and more responsiveness in the marketplace for Medicare Advantage and we would also hold a view that Medicare in total would benefit from themes of what I would might call modernization of the program and we see those things most effectively in the private sector today. So our posture on Medicare Advantage is that we would be advocates of continued change and kind of proactive change around (indiscernible) of modernization. As it relates to kind of specifics of the regulations and the elements that are effecting rates and so forth I think we would prefer things to be somewhat to otherwise, but I think that it is manageable as it exist today, we probably don’t have – we think that if for things that move further would really start to impact, beneficiaries, affect quality of care that there would be significant pushback, if there were greater activities going forward as you deal with elements like fiscal cliff and things like that. I don’t know if, Gail do you want to comment or Jack.

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Jack Larsen – CEO, UnitedHealthcare Community & State: Thank you. I think Steve said it right there, the only thing that perhaps I might point out, we certainly always would have a fairly short list of things we perhaps might suggest modification, more modernization than anything but a lot of the provisions with healthcare reform are things that we’re doing more broadly across our business. So, for example, a focus on payment for success and outcomes and the like that are embedded in stars rating, those are things that are really good and should be preserved we might have a different point of view on the individual elements, of course, but I think the bigger things that are in play are things that will ultimately be good for Medicare Advantage and certainly Medicare broadly.