UnitedHealth Group, the largest provider of Medicare Advantage plans, warned Thursday that funding cuts for the privately-run versions of the federal Medicare program will force it to reconsider its expectations for earnings growth next year.
CEO Stephen Hemsley told analysts that the government-subsidized coverage for elderly and disabled people faces a reimbursement cut of about 4 percent next year. That's on top of other possible federal funding reductions and an expected 3 percent rise in medical costs.
"We did not expect the fastest-growing, most popular and most effective of the Medicare benefit options serving America's seniors would be underfunded to this extent in 2014," Hemsley said.
More than 13 million people were enrolled in Medicare Advantage plans last year, or about 27 percent of the Medicare population, according to the nonprofit Kaiser Family Foundation.
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