UnitedHealth Group expects more profit and double-digit revenue growth next year, led by the company's Optum division for health care services.
Medical costs are expected to increase modestly in 2023 due to chances for a tougher flu season and more patients catching up on their health care that was delayed by the COVID-19 pandemic, executives at the Minnetonka-based health care giant said Tuesday.
Numbers presented at an investor conference show health insurance enrollment in the U.S. is expected to grow by more than 2%, covering more than 47 million people at the company's UnitedHealthcare division.
Revenue at Optum is expected to grow next year by about 17%, led by its outpatient medical centers business and its health care data and consulting services unit.
"We want people in America who need health care to be able to access it without needing a Ph.D. in health care to do it," Andrew Witty, the UnitedHealth Group chief executive, said during the meeting in New York City.
"We need people to feel confident that when they come for care, they're going to get great care and they're not going to be bankrupted in the process."
In 2023, UnitedHealth Group expects a profit of between $21.7 billion and $22.3 billion with revenue falling in the range of $357 billion to $360 billion. That comes to adjusted net earnings of $24.40 to $24.90 a share.
This year, net earnings attributable to shareholders is expected to hit about $20 billion on about $324.5 billion in revenue.
UnitedHealth Group is maintaining its previously announced full-year guidance for 2022 of adjusted net earnings between $21.85 and $22.05 per share.
Within Optum, the company expects slower revenue growth at its large pharmaceutical benefits management business.
UnitedHealthcare revenue is expected to grow by about 11%, fueled by increased enrollment in Medicare Advantage coverage for seniors and from employers that hire United to manage their self-insured health plans. Enrollment is expected to decline in the company's Medicaid health plans as states resume eligibility re-determinations with the expected end of the COVID-19 public health emergency in 2023.
Enrollment in the company's health insurance coverage outside the United States is expected to hold steady at about 5.2 million people. The company is a large provider of coverage and health care services in South America.
This year, UnitedHealthcare is spending about 82 cents on medical care for every dollar of premium. The company said it expects the medical cost figure next year to grow to about 82.6 cents.
"The outlook for 2023 accommodates a view that we've been anticipating for some time now — do we see people start to present with more acute conditions because of deferred care that occurred during the height of the pandemic?" said John Rex, UnitedHealth Group's chief financial officer. "And does that present itself in a way [where] we just see an average higher acuity level and return to pre-pandemic levels of consumption? So, that's a key component there.
"Also [we're] accommodating the view that there is a moderately higher flu incidence level than normal years — something that we haven't actually experienced yet ... but in anticipation that that could occur."
About 380,000 people now work at UnitedHealth Group, Witty said. The figure includes about 18,000 people in Minnesota, according to a company spokesman.
The company has received about 3.9 million applications for employment so far this year, Witty said.
That's "a significant increase in applications" from last year, a company spokesman said in an email.