United Healthcare 2015 Annual Report Download - page 29

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industry and producers marketing and selling those companies’ products. These investigations and enforcement
actions could result in penalties and the imposition of corrective action plans, which could materially and
adversely impact our ability to market our products.
Unfavorable economic conditions could materially and adversely affect our revenues and our results of
operations.
Unfavorable economic conditions may impact demand for certain of our products and services. For example,
high unemployment can cause lower enrollment or lower rates of renewal in our employer group plans.
Unfavorable economic conditions have also caused and could continue to cause employers to stop offering
certain health care coverage as an employee benefit or elect to offer this coverage on a voluntary, employee-
funded basis as a means to reduce their operating costs. In addition, unfavorable economic conditions could
adversely impact our ability to increase premiums or result in the cancellation by certain customers of our
products and services. These conditions could lead to a decrease in our membership levels and premium and fee
revenues and could materially and adversely affect our results of operations, financial position and cash flows.
During a prolonged unfavorable economic environment, state and federal budgets could be materially and
adversely affected, resulting in reduced reimbursements or payments in our federal and state government health
care coverage programs, including Medicare, Medicaid and CHIP. A reduction in state Medicaid reimbursement
rates could be implemented retrospectively to apply to payments already negotiated or received from the
government and could materially and adversely affect our results of operations, financial position and cash flows.
In addition, state and federal budgetary pressures could cause the affected governments to impose new or a
higher level of taxes or assessments for our commercial programs, such as premium taxes on insurance
companies and HMOs and surcharges or fees on select fee-for-service and capitated medical claims. Any of these
developments or actions could materially and adversely affect our results of operations, financial position and
cash flows.
A prolonged unfavorable economic environment also could adversely impact the financial position of hospitals
and other care providers, which could materially and adversely affect our contracted rates with these parties and
increase our medical costs or materially and adversely affect their ability to purchase our service offerings.
Further, unfavorable economic conditions could adversely impact the customers of our Optum businesses,
including health plans, HMOs, hospitals, care providers, employers and others, which could, in turn, materially
and adversely affect Optum’s financial results.
Our investment portfolio may suffer losses, which could materially and adversely affect our results of
operations, financial position and cash flows.
Market fluctuations could impair our profitability and capital position. Volatility in interest rates affects our
interest income and the market value of our investments in debt securities of varying maturities, which constitute
the vast majority of the fair value of our investments as of December 31, 2015. Relatively low interest rates on
investments, such as those experienced during recent years, have adversely impacted our investment income, and
the continuation of the current low interest rate environment could further adversely affect our investment
income. In addition, a delay in payment of principal or interest by issuers, or defaults by issuers (primarily from
investments in corporate and municipal bonds), could reduce our investment income and require us to write down
the value of our investments, which could materially and adversely affect our profitability and equity.
There can be no assurance that our investments will produce total positive returns or that we will not sell
investments at prices that are less than their carrying values. Changes in the value of our investment assets, as a
result of interest rate fluctuations, changes in issuer financial conditions, illiquidity or otherwise, could have an
adverse effect on our equity. In addition, if it became necessary for us to liquidate our investment portfolio on an
accelerated basis, such an action could have a material adverse effect on our results of operations and the capital
position of regulated subsidiaries.
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