UnitedHealth Group’s first-quarter net income slid 8 percent as fees and funding cuts from the health care overhaul helped dent the performance of the nation’s largest health insurer.
UnitedHealth said Thursday it earned $1.1 billion, or $1.10 per share, in the three months that ended March 31. That’s down from $1.19 billion, or $1.16 per share, a year earlier. Revenue rose nearly 5 percent to $31.71 billion.
Analysts expected earnings of $1.09 per share on $32.01 billion in revenue, according to FactSet.
The Minnetonka, Minn., company said the overhaul and government budget cuts added about 35 cents per share in costs during the quarter. The overhaul aims to provide coverage for millions of uninsured people, but it also began charging an industry-wide fee this year, and the law is scaling back funding for Medicare Advantage plans, which are privately run versions of the government’s Medicare program.
UnitedHealth is the nation’s largest provider of Medicare Advantage coverage, with nearly 3 million enrollees.
The insurer said the mandatory across-the-board federal budget cuts known as sequestration also delivered more funding cuts to its Medicare Advantage business.
UnitedHealth also reaffirmed its earnings forecast for 2014. The insurer still expects earnings to range from $5.40 to $5.60 per share on revenue of $128 billion to $129 billion.
Analysts expect, on average, earnings of $5.60 per share on $129.21 billion in revenue.
UnitedHealth Group Inc. is the first insurer to report earnings every quarter. Many see it as a bellwether for other insurers.