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UnitedHealth Group Witnessed Robust Customer Growth in 1Q17

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Growth in customers

In 1Q17, UnitedHealth Group’s (UNH) UnitedHealthcare business witnessed a 2.5 million year-over-year (or YoY) increase in customers. On a sequential basis, the company served 1.5 million more customers in 1Q17. UnitedHealth Group makes up about 1.5% of the Vanguard Value ETF’s (VTV) total portfolio holdings.

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Customer enrollments

In 1Q17, UnitedHealth Group’s commercial enrollments totaled ~30.3 million, involving 26.8 million commercial group members, ~0.6 million individual enrollments, and 2.8 million fee-based TRICARE enrollments.  Commercial group-based enrollments have witnessed a YoY rise of around 480,000, with 225,000 new members joining in risk-based plans and another 255,000 in fee-based plans.

However, individual enrollments declined due to UnitedHealth Group’s decision to withdraw from several loss-making public exchanges.

In 1Q17, UnitedHealth Group’s public and senior enrollments totaled ~14.8 million, involving approximately 4.3 million Medicare Advantage (or MA) members, close to 6.2 million individual enrollments, and 4.3 million Medicare supplement enrollments.

In 1Q17, the company added around 1 million new customers in this segment on a YoY basis. This involved more than 300,000 Medicaid customers and around 675,000 MA customers. Around 50% of the new MA customers belong to employer retiree programs.

As UnitedHealth Group is focused on higher clinical engagement, cost optimality, and consistency in quality despite stable premiums, the company’s MA plans have been scoring high in terms of performance ratings. This has enabled UnitedHealth Group to compete effectively with peers such as Anthem (ANTM), Aetna (AET), and Cigna (CI).

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