UnitedHealth expects $1.7B windfall from tax law
UnitedHealth Group, the country’s largest insurer, will gain $1.7 billion in additional earnings in 2018 because of the GOP tax bill, the company’s CEO said Tuesday.
In a fourth quarter earnings call, Dave Wichmann told investors the company will “accelerate” investing the windfall in new technology and local community-based health-care initiatives.
The legislation signed by President Trump last month slashed the corporate tax rate in an attempt to boost wages and add new jobs in the U.S. However, Wichmann did not mention that UnitedHealth would be using the additional cash for higher wages for its employees.
UnitedHealth had $201 billion in revenue and $10.6 billion in profit in 2017, according to the earnings statement. The company stopped participating in ObamaCare exchanges in most states in 2017.
Wichmann also said the company is continuing to advocate for a delay — and ultimate repeal — of the health insurance tax. The tax was used as a way to help pay for ObamaCare, but has been almost universally opposed by the insurance industry.
Insurers argue the tax drives up premiums, and repealing it or delaying it for multiple years is a way to reduce premiums.
Industry groups have been pushing to include a delay or repeal of the insurance tax in the various government spending bills.
The argument against repealing the tax is that it would erode a source of funding for ObamaCare, especially if the cost is not offset.