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UnitedHealth execs: Return of insurance tax to create earnings headwind in '18


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UnitedHealth execs: Return of insurance tax to create earnings headwind in '18

UnitedHealth Group Inc. will face a 75-cent earnings-per-share headwind in 2018 because of the return of the health insurance fee, executives said on the company's third-quarter earnings call.

CEO David Wichmann said during the call that the return of the fee is the most "meaningful" headwind UnitedHealth faces going into 2018. He said the company has advocated strongly for the repeal or continued deferral of the tax.

"It ultimately increases cost to consumers through either increased premiums or benefit reductions and thus affects Medicare beneficiaries, individual policyholders, large and small businesses and Medicaid recipients," Wichmann said.

The fee is a sales tax on health insurance to fund parts of the Affordable Care Act. At the end of 2015, former President Barack Obama ordered the fee be held in abeyance for one year in 2017, but it is set to return in 2018.

Without the impact of the tax, Wichmann said the company would realize the long-term EPS growth of 13% to 16% that started in 2008.

The health insurer's shares were up 4.93% to $202.73 as of 11:30 a.m. ET on Oct. 17.