(Reuters) -UnitedHealth Group Inc beat quarterly profit estimates on Wednesday and reiterated its 2022 enrolment target for Medicare Advantage health plans, easing some concerns that strong competition in the sector would hamper membership growth.
The largest U.S. health insurer said the number of Americans opting for its government-backed Medicare Advantage (MA) plans rose by over 900,000 last year and that it expected strong membership growth in 2022.
Analysts had previously estimated the expected rise this year in UnitedHealth’s MA plans, which are funded by the U.S. government but administered by private insurers, to be between 600,000 and 650,000.
“We think investors should be relieved that UNH has maintained its prior growth targets,” Stephens analyst Scott Fidel said.
Rival Humana Inc’s move earlier this month to slash its 2022 growth for MA plans had sparked concerns that demand could slow for the insurance that has been driving the sector’s growth.
UnitedHealth also stood pat on its 2022 adjusted profit forecast of between $21.10 and $21.60 per share.
The insurer, whose medical costs had fluctuated for much of 2021 due to COVID-19, reported a medical care ratio of 83.7% for the fourth quarter. The figure was in-line with the consensus estimate, according to brokerage Evercore ISI.
The ratio represents the percentage of premiums paid out for medical services.
UnitedHealth’s core business that sells health insurance plans reported a 12% jump in sales to $56.4 billion in the quarter ended Dec. 31.
Revenue from its Optum unit, which manages drug benefits and offers healthcare data analytics services, rose about 14.5% to $41.1 billion.
Adjusted earnings came in at $4.48 per share, beating analysts’ average estimate of $4.31 per share, according to IBES data from Refinitiv.
(Reporting by Manojna Maddipatla in Bengaluru; Editing by Aditya Soni)