United Healthcare 2015 Annual Report Download - page 44

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OptumInsight
Revenue, earnings from operations and operating margins at OptumInsight for the year ended December 31,
2015 increased primarily due to expansion and growth in care provider revenue management services and payer
services.
OptumRx
Revenue and earnings from operations for the year ended December 31, 2015 increased due to the mid-year
acquisition of Catamaran as well as strong organic growth. Operating margins for the year ended December 31,
2015 decreased slightly due to the inclusion of lower margin Catamaran business. For more information about
Catamaran, see Note 3 in Notes to the Consolidated Financial Statements in Part II, Item 8 “Financial
Statements.”
2014 RESULTS OF OPERATIONS COMPARED TO 2013 RESULTS
Consolidated Financial Results
Revenues
The increases in revenues during the year ended December 31, 2014 were primarily driven by growth in the
number of individuals served in our public and senior markets businesses and growth across all of Optum’s
businesses.
Medical Costs and Medical Care Ratio
Medical costs during the year ended December 31, 2014 increased due to risk-based membership growth in our
public and senior markets businesses. To the extent possible, we included the reform fees and related tax impacts
in our pricing; since the ACA Fees are included in operating costs, this decreased our medical care ratio in 2014.
This decrease from ACA Fees was partially offset by the impact of lower levels of favorable medical cost reserve
development.
Operating Cost Ratio
The increase in our operating cost ratio during the year ended December 31, 2014 was due to the introduction of
ACA Fees and services business growth and acquisitions, partially offset by productivity and operating
performance gains.
Income Tax Rate
The increase in our income tax rate resulted primarily from the nondeductible Health Insurance Industry Tax.
Reportable Segments
UnitedHealthcare
UnitedHealthcare’s revenue growth during the year ended December 31, 2014 was due to growth in the number
of individuals served in our public and senior markets businesses; revenues to recover ACA Fees, which resulted
in $1.5 billion of additional annual premiums in 2014; and commercial price increases reflecting underlying
medical cost trends. These increases were partially offset by decreased commercial risk-based enrollment and a
reduced level of Medicare Advantage funding.
UnitedHealthcare’s operating earnings for the year ended December 31, 2014 were pressured year-over-year by
ACA Fees, Medicare Advantage funding reductions, increased spending on specialty medications to treat
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