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UnitedHealth sees Medicare payment shortfall, shares drop

Reuters, October 18, 2013
UnitedHealth Group Inc on Thursday predicted a tough year in 2014 because of government funding cuts to its private Medicare business, dragging down its shares and those of its competitors. UnitedHealth Chief Executive Stephen Hemsley said that "underfunding" of Medicare Advantage plans for the elderly cannot be fully offset by the company's other healthcare business. UnitedHealth, the largest U.S. health insurer, has previously said that it plans to withdraw from some markets in 2014 because of these cuts. As a result, Hemsley told investors during a call to discuss quarterly results, the company's 2014 earnings may be either lower or higher than its forecast 2013 profit, which it narrowed to $5.40 to $5.50 per share.