UnitedHealth Group Incorporated (NYSE:UNH) Q2 2018 Earnings Conference Call - Final Transcript
Jul 17, 2018 • 08:45 am ET
(Operator Instructions) Justin Lake, Wolfe Research.
My question is on reserve development. Given the relative lack of prior and intra-year development in the quarter, I was hoping you could give us some increased color on cost trend and reserve development across the commercial Medicaid and Medicare segment. And then just to make sure we understand prior-year development trends overall, can you tell us what percentage of claims if any you have, you steadied the quarter for adverse deviation, give reserves? I think most companies talk about mid-single digits, but just wanted to confirm yours. Thanks.
Starting with the development, we maintain at reserving process as you know that's tightly controlled and consistent over time and we are very comfortable with our reserve position at the end of the quarter and really pleased with the overall accuracy of our reserving over time. When you look at our year-to-date development, because second quarter was fairly modest but when you look to year-to-date as a percentage of our medical -- prior year medical expense, it's right in line where we are historically. As that works into a trend, we are always very respectful of trend, but as we stand right now, we've not seen anything to date that would inform or change our view on commercial medical trends for the year by cost cut category or in total. And -- no, we don't get into details on trends in Medicare and Medicaid businesses, but I could offer a couple of comments. Medicare trends are generally stable with last year. And we are seeing some elevated consumption over time similar to last year related to the market leading growth that we've had, and Medicaid trends also really need to be looked at state by state as always there are some areas with increased trend and we are working to manage those down but nothing really notable to call out on those.
The Medicare trend you mentioned, can you just expand on that? What drives that in terms of your market leading growth? I apologize.
Maybe I can ask Brian Thompson to speak to that.
Sure. Hey Justin, Brian Thompson here. Again we're really not seeing any trend emergence in 2018, I want to make that clear. What we're seeing is very consistent with what we saw in 2017. I think the point is, given our market-leading growth, we do prepare for and have seen even uptick as we grow meaningfully compared to the rest of the market. We see that often in the form of new enrollees as well as our improved retention, holding on to folks later in life. So again what we're seeing in 2018 was a lot like what we saw in 2017 and 2016 that's being the fourth year now for strong market share gains and -- where it provides a very incredible good base line for us as we look forward to 2019.
Next question, please.
Sarah James, Piper Jaffray.
My question is on the 2019 commercial environment. On the