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UNH’s Medicaid Business: Analyzing Trends in Q1

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Apr. 17 2019, Published 12:15 p.m. ET

UnitedHealthcare’s Medicaid business

UnitedHealthcare’s Community and State business reported revenues of $11.18 billion in the first quarter—a rise of $511 million YoY (year-over-year). According to UnitedHealth Group’s (UNH) first-quarter earnings press release, the performance was driven by a solid rise in dual eligible members and members enrolled in the company’s long-term services and supports programs.

UnitedHealth Group is focused on investing in its Duals special needs program, which currently accounts for ~30% of the total market share.

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Medicaid membership

In the first quarter, UnitedHealth Group reported Medicaid membership of 6.42 million—a decline of 25,000 members YoY.

On February 4, UnitedHealth Group issued a press release announcing that it’s one of the four managed care organizations selected to participate in North Carolina’s state Medicaid program on November 1. According to the company’s first-quarter earnings conference call, UnitedHealth Group has also been selected to offer Arizona Intellectual and Developmental Disabilities contracts.

UnitedHealth Group continues to improve its performance in certain challenging Medicaid markets. According to the company’s first-quarter earnings conference call, UnitedHealth Group has decided to exit Iowa’s state Medicaid program on June 30. The company said that it can’t make Iowa a sustainable market due to increased funding by the administration in fiscal 2018 to compensate for systemic underfunding over multiple years, increasing cost pressures, and certain specific design elements of Iowa’s state Medicaid program.

UnitedHealth Group passes 100% of the discount rebates obtained on drugs to its Medicare and Medicaid members. The company passes 98% of the overall discounts to all of its patients combined.

UnitedHealth Group is focused on deploying its OptumInsight technology and analytics capabilities to improve the scale and efficacy of its Medicaid offerings.

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