A UnitedHealth Group health insurance card is seen in a wallet on Oct.14, 2019.
Lucy Nicholson | Reuters
UnitedHealth expects most of its members to be enrolled in top-rated Medicare insurance plans next year, in line with its expectations, the top U.S. health insurer said in a filing on Tuesday.
Shares of the company rose nearly 4% to $332.80 in premarket trading on the news, as strong membership for plans with higher star ratings would mean bigger payments from the government to the insurer, and the bonus payments can be worth hundreds of millions or billions of dollars.
The company expects to have about 78% of its membership in 4-star or higher-rated Medicare plans, meant for Americans aged 65 years or older, based on its preliminary review.
This is consistent with its expectations and in line with historical performance, the company said.
The forecast, however, comes ahead of the Centers for Medicare and Medicaid Services’ 2026 star ratings data, which can sway enrollees’ choice of plan and determine the government’s reimbursement levels.
Medicare Advantage has been a growth driver for health insurers, but rising medical costs and tighter government reimbursements have been pressuring profits.
Senior leaders of UnitedHealth will be meeting investors and analysts this week, the company filing showed.
The company is also expected to reaffirm its 2025 adjusted profit forecast. In July, it projected full-year adjusted earnings per share of at least $16 after suspending its prior outlook in May.
Like other insurers, UnitedHealth has been hit with higher costs. Stephen Hemsley, who returned as chief executive, is under pressure to regain investor trust as the company faces financial struggles and reputation damage that surfaced after the then-CEO of its health insurance unit was gunned down on a New York City street in December.