UnitedHealth Group's net earnings in the first quarter of fiscal year 2014 fell 7.8 percent, from approximately $1.2 billion in 2013 to $1.1 billion this year.
The health insurer reported $31.7 billion in total revenue for the three months ended March 31, a 4.5 percent increase from $30.3 billion in the first quarter of 2013. However, total operating costs also increased by about 5.2 percent, from $28.2 billion last year to nearly $29.7 billion in the first quarter of 2014.
UnitedHealth President and CEO Stephen J. Hemsley said in a news release the company's rising revenues were "offset by headwinds from new [PPACA] taxes and Medicare Advantage funding deficiencies."
Medicare Advantage cuts due to the healthcare reform law and sequestration led UnitedHealth Group to exit markets, adjust networks and reduce product offerings and benefits this year, according to the release. Additionally, the company's first-quarter income tax rate increased more than five percentage points year-over-year to 42 percent because of nondeductible health insurance taxes and reinsurance fees under the PPACA.
More Articles on UnitedHealth Group:
Health Insurers Comment on New Public Exchanges
UnitedHealth Subsidiary Signs Purchasing Agreement With Medtronic, Abbott
UnitedHealth Q4 Profit Up 15%