<div id="subtitle">UnitedHealth Group's 4th-quarter profit climbs; commercial enrollment continues to stumble</div><div><p>Managed care company UnitedHealth Group Inc. wrapped up 2009 with a third-straight quarterly profit increase, but it starts 2010 still hampered by high unemployment, which hurts its biggest insurance segment.</p><p>The Minnetonka, Minn., insurer said Thursday its fourth-quarter profit rose 30 percent, due in part to premium increases and a big legal charge that weighed down results in the last quarter of 2008.</p><p>But UnitedHealth's commercial enrollment — which includes higher-margin business like employer-based and individual health plans — fell by 1.7 million people compared with the year-earlier period.</p><p>The insurer ended 2009 with commercial enrollment of 24.6 million, a drop of 6.5 percent. Partially offsetting those losses was a 12.5 percent increase in enrollment for Medicare and Medicaid plans to just under 7.4 million people.</p><p>CEO Stephen J. Hemsley said attrition, or job cuts, accounted for more than half of the commercial enrollment loss.</p><p>"Attrition continues to run at a high level and will be a concern all year in this economy," he said.</p><p>The losses slowed in each quarter of 2009, and the insurer said it expects to lose between 500,000 and 950,000 members from that segment in 2010 as the job market slowly recovers.</p><p>The commercial enrollment loss is a concern, Miller Tabak analyst Les Funtleyder said. But he noted that UnitedHealth hasn't lost its client base, and its business diversity helps soften the losses.</p><p>UnitedHealth also operates segments that sell wellness programs and information services, aside from commercial and government-based coverage.</p><p>"There's a benefit to a diversified business model in a down employment cycle like we have now," he said.</p><p>UnitedHealth earned $944 million, or 81 cents per share, in the three months that ended Dec. 31. That's up from $726 million, or 60 cents per share, in the same period of 2008, which included a charge of 18 cents per share to resolve a class-action lawsuit over out-of-network medical services.</p><p>Quarterly revenue rose 6.5 percent to $21.78 billion. A 6.2 percent jump in premium revenue to $19.7 billion accounted for most of that growth.</p><p>The results topped expectations of analysts surveyed by Thomson Reuters, who had forecast a profit of 73 cents per share on $21.72 billion in revenue.</p><p>Leerink Swann analyst Jason Gurda called the performance a "modest positive."</p><p>"The company appears to have exceeded expectations based on a milder-than-originally-anticipated H1N1 flu season and continued strong growth in its Medicare and Medicaid business," Gurda said in a research note.</p><p>For the full year, profit rose about 28 percent to $3.8 billion, or $3.24 per share, from $2.9 billion, or $2.40 per share, in 2008. Revenue rose 7 percent to $87.14 billion from $81.19 billion.</p><p>Looking ahead, the company reaffirmed its outlook for a 2010 profit between $2.90 and $3.10 per share. Hemsley said revenue should surpass $90 billion. Analysts, on average, expect a profit of $3.06 per share on $89.85 billion in revenue.</p><p>UnitedHealth shares fell $1.45, or 4.2 percent, to close at $33.10 amid broader market declines. The Dow and the Standard & Poor's 500 both finished about 2 percent lower on the day.</p><p>The company's shares had started strong in 2010, climbing 13 percent before Thursday. UnitedHealth and other insurers have seen their stocks rise recently as the health care overhaul debate in Washington stumbled. Investors have worried for months about how the extra taxes and regulation proposed in overhaul bills would affect the industry.</p><p>But the effort was dealt a setback Tuesday, when a Republican candidate won a race for Massachusetts' Senate seat. The victory cast doubt on the Democrats' wide-ranging reform push.</p><p>___</p><p>AP Business Writer Damian Troise contributed to this story from New York.</p><img src="http://admatch-syndication.mochila.com/images/ad.gif?aid=67464423&bid=informcom" /></div><div id="copyright"><div>

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