UnitedHealthcare is expecting medical costs for its Medicare Advantage members to keep rising, the company's top executives said.
A higher rate of outpatient procedures among older adults is contributing to rising medical utilization rates, executives told investors on a July 14 earnings call
UnitedHealth Group CFO John Rex said cardiac and orthopedic procedures increased at a greater rate than other outpatient care.
"As we developed and filed our 2024 Medicare Advantage offerings, we assume that these levels of heightened care activity will persist throughout next year. Overall care activity among our Medicaid and commercial populations is consistent with our expectations," Mr. Rex said.
UnitedHealth Group posted $5.5 billion in net income in the second quarter of 2023. The company's medical loss ratio was 83.2 percent in the second quarter compared to 81.5 percent the same time last year.
Tim Noel, CEO of UnitedHealthcare's Medicare and retirement business, said the business adjusted its 2024 Medicare Advantage bids based on increasing utilization.
Mr. Noel noted that recent risk model changes from CMS will have more of an effect on 2024 rates than increasing utilization.
"Certainly, we've been talking a lot about care patterns, but that has far less of an impact on the benefits filed and is really one of many assumptions that we make inside of our bids," Mr. Noel said.