UnitedHealth Group’s second quarter 2022 earnings report showed that its medical care ratio (MCR) was 81.5%, lower than its expected MCR of 83%. An insurer’s MCR, which is frequently referred as the medical loss ratio, represents the insurer’s spending on claims compared with its earnings from premiums. United’s lower than expected MCR means that it paid less to providers for medical costs than anticipated. These reduced payments to providers fueled United’s stronger than expected second quarter profits of $5.1 billion, leading United to increase its full-year net earnings outlook to $20.45 to $20.95 per share. The Affordable Care Act and other products require insurers to maintain a MCR of 85% in large group markets.
UnitedHealthcare, a division of UnitedHealth Group, is the country’s largest health insurer as measured by revenues, membership and market share. Optum Health, another division, is the third largest healthcare delivery enterprise in the country, providing care directly to over 20 million patients though its over 60,000 physicians and numerous ambulatory surgery centers, urgent care centers, imaging centers and home health services.
Whatley Kallas, LLP’s previous article on United’s second quarter 2022 earnings is linked here.