Medicare Advantage rate changes will have a ripple effect through UnitedHealth Group's business in 2024, but its leaders have a sunny outlook despite lower projected growth.
The company projects it will add around 550,000 members in its Medicare, group and individual offerings, CFO John Rex told investors on Nov. 29, lower than the nearly 1 million it added in 2023.
"We consciously and strategically approached 2024 with balance, with multiple time frames in mind, keeping benefits as stable as possible for seniors while adapting to program funding changes and care patterns," Mr. Rex said.
The company projects between $138 billion and $139 billion in revenue from Medicare Advantage in 2024, according to its 2023 investor guidance published Nov. 29.
The company projected $400 billion in overall revenue next year, up $30 billion from 2023.
In April, CMS will move ahead with Medicare Advantage risk adjustment changes payers opposed, phasing in the model over three years.
At UnitedHealth Group's investor day conference, CEO Andrew Witty said the risk adjustment rates are "essentially a price cut for Medicare Advantage." The effects of the cut ripple through UnitedHealth Group's metrics, Mr. Witty said.
"You see that pattern flow through the business, and yet here we are today, standing up and saying despite that change, despite that impact, we are committed to the kind of earnings growth rate over the next 12 months that you would expect from us even if there hadn't been a rate notice cut," Mr. Witty told investors.
The rate changes were a catalyst for UnitedHealth to redouble its energy around value-based care and efficiency, the CEO said.
On a previous call with investors, Mr. Witty said Optum is an integral part of this effort, improving consumer engagement, digital-first technology and more value-based arrangements. The company expects to have more than 4 million consumers in value-based arrangements in 2024, according to its investor guidance.
"The stimulus rate notice has been an incredibly positive and healthy event for UnitedHealth Group. Not because it gave us more money. It didn't," Mr. Witty said Nov. 29. "But because it gave us the stimulus to rechallenge ourselves on how we do things even more effectively going forward."