Health Care Industry Sees Best Obamacare Quarter Yet

With the second year of subsidized private insurance and expanding state Medicaid coverage adding millions more insured Americans under the Affordable Care Act, health care insurers and medical care providers are already seeing billions of dollars in new revenue.

Two major barometers of health industry profits, insurance giant UnitedHealth Group (UNH) and hospital operator HCA Holdings (HCA) last week raised their 2015 revenue projections by billions of dollars.

HCA, in its preliminary 2015 first quarter report, said revenue could reach $40 billion, an increase of the hospital chain’s earlier outlook of between $38.5 billion and $39.5 billion. It raised its profit forecast as well. HCA chairman and CEO R. Milton Johnson said the quarter’s performance was “driven by continued favorable volume and payor trends in core operations.”

Meanwhile, UnitedHealth in its first quarter earnings report raised its revenue outlook for 2015 by $2 billion, saying the insurer will now generate $143 billion in revenue.

In UnitedHealth’s case, they entered several new markets and put more products on public exchanges after sitting on the sidelines in all but a few states in 2014. “We knew back in January that the market was responding positively so it’s played out nicely,” UnitedHealth Group CEO Stephen Hemsley.

UnitedHealth said it also saw growth in Medicaid where several states opted to expand coverage under the health law this year after ironing out political issues that kept them from expanding in 2014.

Several other health insurers, including Aetna (AET), Cigna (CI) and Humana (HUM) report their first quarter earnings in the next week. Tenet Healthcare (THC), HCA’s primary rival, reports the first week in May.

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Source: Forbes Health