MINNEAPOLIS _ With speculation swirling about how Republicans might replace the federal health law, the chief executive of UnitedHealth Group offered no specifics Tuesday but said he sees the potential for health care changes focused on state-based markets, flexible Medicaid programs and well-structured high-risk pools.
Even so, the nation's largest health insurer has "no better sense than anyone else concerning the timing or ultimate actions with respect to the Affordable Care Act," said Stephen Hemsley, the CEO at UnitedHealth, during a call with investors to discuss fourth quarter results.
"We remain positive and constructive with respect to what ultimately evolves in the next phase of health care change," Hemsley said.
The promised repeal and replacement of the federal ACA by Republicans at the federal level has created uncertainty for insurers about the individual and Medicaid markets that have been reshaped by the law.
UnitedHealth, headquartered outside the Twin Cities, has a large Medicaid business, but has reduced its exposure to the individual market where health law changes have generated losses for carriers.
The company's UnitedHealthcare insurance division abandoned this year due to financial losses most of the new health exchange marketplaces for individuals that were created by the health law. Even so, Hemsely said Tuesday that exchanges might persist "where states choose to sustain them."
"We believe, all of these, taken together, can represent effective, local, state-based coverage systems, which can well accommodate those currently within the ACA individual exchanges, as well as serve as channels for further expanding coverage if that remains the focus," Hemsley said. "We see this approach as being simpler, offering more flexibility, more choice and more affordability to both consumers and state and federal sponsors."
Beyond the general comments, Hemsley told investors he would not discuss specifics about what might come next. Republicans last week began the process of repealing the ACA, and President-elect Donald Trump has called for replacement legislation to be adopted in tandem with the repeal.
Some Republican plans have called for the creation of high-risk pools that before the health law provided a source of insurance, albeit with higher prices and coverage limitations, to people with preexisting health care conditions. One of the most popular changes brought by the ACA was a ban on health insurance rules that let companies deny coverage to individuals with a history of health problems.
On Tuesday, UnitedHealth Group reported fourth quarter results that beat analyst estimates for profit and revenue, driven in part by growth at its Optum division for health care services.
Earlier this month, United announced a $2.3 billion acquisition that will make Optum one of the largest operators of surgery centers in the country.
For 2016, Optum grew revenue at a faster rate than the company's UnitedHealthcare business, which is the nation's largest health insurer.
During the fourth quarter, medical cost trends at UnitedHealthcare moderated due in part to reduced individual market pressure, the company said in a news release.
UnitedHealthcare provided benefits to more than 44 million Americans at the end of the fourth quarter, up from more than 42 million people at the end of 2015.
"We are privileged today to serve more people in more ways than ever before," Hemsley said in a statement.
For the quarter, UnitedHealth Group posted a profit of $1.9 billion on revenue of $47.52 billion, better than the year-ago quarter results of $1.2 billion in earnings on revenue of $43.59 billion.
After adjusting for one-time charges, earnings per share came in at $2.11, better than the $2.07 per share expected by analysts surveyed by Thomson Reuters.
UnitedHealth Group affirmed its 2017 financial outlook, including estimated revenue of $197 billion to $199 billion, net earnings of $8.75 to $9.05 per share, adjusted net earnings of $9.30 to $9.60 per share, and cash flows from operations of $11.5 billion to $12 billion.
In trading Tuesday morning, United shares were down $1.80, or about 1 percent, at $160.
