United Healthcare 2005 Annual Report Download - page 24

increase from 8.6% in 2004. This increase was driven mainly by the lower commercial medical care ratio as well
as changes in business and customer mix.
The following table summarizes the number of individuals served by Health Care Services, by major market
segment and funding arrangement, as of December 311:
(in thousands) 200522004
Commercial
Risk-based ..................................................... 7,765 7,655
Fee-based ...................................................... 3,895 3,305
Total Commercial ........................................... 11,660 10,960
Medicare ...................................................... 395 330
Medicaid ...................................................... 1,250 1,260
Total Health Care Services .................................... 13,305 12,550
1Excludes individuals served by Ovations’ Medicare supplement products provided to AARP members.
2Excludes commercial risk-based membership of approximately 2.3 million, commercial fee-based membership of
approximately 100,000 and Medicare membership of approximately 750,000 related to the December 2005 acquisition of
PacifiCare. These amounts have been excluded since the impact of PacifiCare on our 2005 consolidated financial results
is not significant.
The number of individuals served by UnitedHealthcare’s commercial business as of December 31, 2005,
excluding the PacifiCare acquisition, increased by approximately 700,000 over the prior year. This included an
increase of 590,000 in the number of individuals served with fee-based products driven by the addition of
approximately 335,000 individuals served resulting from new customer relationships and customers converting
from risk-based products to fee-based products as well as approximately 255,000 individuals served by a benefits
administrative services company acquired in December 2005. In addition, the number of individuals served with
commercial risk-based products increased by 110,000 driven primarily by the addition of approximately 130,000
individuals served by Neighborhood Health Partnership, acquired in September 2005, and a slight increase in net
new customer relationships offset by customers converting from risk-based products to fee-based products.
Excluding the PacifiCare acquisition, the number of individuals served by Ovations’ Medicare Advantage
products increased by 65,000, or 20%, over 2004 due primarily to new customer relationships. AmeriChoice’s
Medicaid enrollment decreased by 10,000 from 2004 due primarily to the withdrawal of participation in one
market during the third quarter of 2005 partially offset by new customer relationships since 2004.
Uniprise
Uniprise provides network-based health and well-being services, business-to-business transaction processing
services, consumer connectivity and technology support services nationwide to large employers and health plans,
and provides health-related consumer and financial transaction products and services. Uniprise revenues in 2005
were $3.9 billion, representing an increase of $485 million, or 14%, over 2004. Excluding the impact of
acquisitions, Uniprise revenues increased approximately 12% over 2004. This increase was driven primarily by
growth of 7% in the number of individuals served by Uniprise, excluding the impact of acquisitions, and annual
service fee rate increases for self-insured customers. Uniprise served 10.5 million individuals and 9.9 million
individuals as of December 31, 2005 and 2004, respectively.
Uniprise earnings from operations in 2005 were $799 million, representing an increase of $122 million, or 18%,
over 2004. Operating margin for 2005 improved to 20.8% from 20.1% in 2004. Uniprise has expanded its
operating margin through operating cost efficiencies derived from process improvements, technology
deployment and cost management initiatives that have reduced labor and occupancy costs in its transaction
22