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UnitedHealth Group Reports Consumers Are Selecting Account-Based Plans at a Rapid Pace; Membership Tops 1.75 Million

Posted on: Thursday, 8 June 2006, 09:01 CDT

UnitedHealth Group (NYSE:UNH):

-- Individuals in plans connected to Health Savings Accounts or Health Reimbursement Accounts increased 75 percent from June 2005

-- Consumer activation programs are being deployed across 2.7 million individuals, including approximately 1 million enrolled in traditional medical benefit plans

UnitedHealth Group (NYSE:UNH) today announced that membership in its consumer-driven health (CDH) plans has surpassed 1.75 million people. This growth reinforces the company's position in striving to transform the health care system to one driven by more informed and empowered consumers, helped by consumer support tools that facilitate a new and more transparent health care market

UnitedHealth Group continues to be a leader in the advancement of health plans connected to a Health Savings Account (HSA) or Health Reimbursement Account (HRA). Membership is growing at a rapid pace across employers of all sizes as well as in the individual market. Consumers in plans connected to HSAs or HRAs increased 75 percent from June 2005, with more than 750,000 new individuals participating in the past year. About 60 percent of the CDH membership selected the plan even when their employers also offered more traditional, non-CDH options, further illustrating that consumers are driving this rapid growth through strong interest in account-based plans.

"Consumers are becoming much more comfortable with account-based plan designs," said Mike Tarino, CEO of Definity Health, the UnitedHealth Group business that manages consumer-driven plans and activation strategies. "More than 13,000 employers have already turned to us to incorporate a consumer-driven plan design into their benefits strategy, and our CDH membership among large, national employers alone recently topped 1 million."

Activation Programs Are Key

Tarino attributes the continued strong interest and enrollment in consumer-driven plans in large part to the activation programs pioneered by Definity Health, which include personalized health messaging, monthly health statements and health coaching. These strategies are tailored to each individual consumer, preparing them to take informed action, making it easier to navigate the health care system, enhancing their ability to focus on healthy lifestyles, and maximizing the value they receive for their health care dollars.

UnitedHealth Group is also extending these activation programs to enrollees in non-CDH plans, creating a more consumer-centric approach among participants in all types of health benefit programs. Already, approximately 1 million consumers in non-CDH plans are receiving a deeper and more personal level of support on their health care decisions through these efforts, effectively enabling behavior change and creating a simpler experience for any health care consumer, regardless of plan design.

Definity's activation programs are producing tangible changes in the health care behaviors of consumers. For example, the personalized messaging program, which delivers personally relevant health messages through multiple formats, has found that consumers who read their personalized messages show:

-- 240 percent higher rates of mammography

-- 31 percent increase in the use of pill-splitting

-- 100 percent increase in the use of mail order pharmacy services

These and other early results indicate that unique and integrated programs that help people get to the appropriate care provider and pursue the optimum intervention positively impact their health care outcomes, as well as related costs.

"More and more individuals and employers are realizing that they can influence positive changes in consumer health through innovative approaches like these," Tarino said. "Engaging and activating consumers can drive significantly higher levels of awareness about affordability, accessibility and quality, and we believe strongly that those benefits should not be limited just to individuals in HRA and HSA plans."

UnitedHealth Group companies currently serve 710,000 members enrolled in HSAs as well as 1,045,000 HRA enrollees. Approximately one-third of the large and mid-size employers served by UnitedHealth Group offer one of the company's consumer-driven health plans, a strong indication that a consumer approach to health care is quickly becoming the mainstream.

About UnitedHealth Group

UnitedHealth Group is a diversified health and well-being company dedicated to making health care work better. Headquartered in Minneapolis, Minn., UnitedHealth Group offers a broad spectrum of products and services through six operating businesses: UnitedHealthcare, Ovations, AmeriChoice, Uniprise, Specialized Care Services and Ingenix. Through its family of businesses, UnitedHealth Group serves approximately 70 million individuals nationwide.

Forward-Looking Statements

This news release may contain statements, estimates or projections that constitute "forward-looking" statements as defined under U.S. federal securities laws. Generally the words "believe,""expect,""intend,""estimate,""anticipate,""project,""will" and similar expressions identify forward-looking statements, which generally are not historical in nature. These statements may contain information about financial prospects, economic conditions, trends and unknown certainties. We caution that actual results could differ materially from those that management expects, depending on the outcome of certain factors. These forward-looking statements involve risks and uncertainties that may cause our actual results to differ materially from the results discussed in the forward-looking statements. Some factors that could cause results to differ materially from the forward-looking statements include: increases in health care costs that are higher than we anticipated in establishing our premium rates, including increased consumption of or costs of medical services; heightened competition as a result of new entrants into our market, and consolidation of health care companies and suppliers; events that may negatively affect our contract with AARP; uncertainties regarding changes in Medicare, including coordination of information systems and accuracy of certain assumptions; funding risks with respect to revenue received from Medicare and Medicaid programs; increases in costs and other liabilities associated with increased litigation, legislative activity and government regulation and review of our industry; potential consequences surrounding findings of our ongoing internal investigation, investigation by a committee of our independent directors and informal SEC inquiry into our stock option granting practices, as well as a subpoena from the office of the U.S. Attorney for the Southern District of new York requesting documents relating to stock option grants since 1999 and a request from the Internal Revenue Service for documents relating to the compensation of certain executive officers; uncertainty of results of pending civil litigation relating to our stock option granting practices; our ability to execute contracts on competitive terms with physicians, hospitals and other service providers; regulatory and other risks associated with the pharmacy benefits management industry; failure to maintain effective and efficient information systems, which could result in the loss of existing customers, difficulties in attracting new customers, difficulties in determining medical costs estimates and appropriate pricing, customer and physician and health care provider disputes, regulatory violations, increases in operating costs, or other adverse consequences; possible impairment of the value of our intangible assets if future results do not adequately support goodwill and intangible assets recorded for businesses that we acquire; potential noncompliance by our business associates with patient privacy data; misappropriation of our proprietary technology; and anticipated benefits of acquiring PacifiCare may not be realized. This list of important factors is not intended to be exhaustive. A further list and description of some of these risks and uncertainties can be found in our reports filed with the Securities and Exchange Commission from time to time, including our annual reports on Form 10-K and quarterly reports on Form 10-Q. Any or all forward-looking statements we make may turn out to be wrong. You should not place undue reliance on forward-looking statements, which speak only as of the date they are made. Except to the extent otherwise required by federal securities laws, we do not undertake to publicly update or revise any forward-looking statements.

Source: Business Wire

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