Data breach at health-insurance giant costs more than $800 million
By Will Kessler
Daily Caller News Foundation
Health insurance giant UnitedHealth Group lost $872 million as a result of a data breach by a group of hackers, the company announced Tuesday in its first quarter earnings report.
Despite the huge loss, UnitedHealth still posted $7.9 billion in earnings, up $8 billion year-over-year, with $99.8 billion in revenue, according to the report. Near the end of February, a group of hackers claimed to have stolen millions of sensitive records from UnitedHealth related to medical insurance and health data on customers, according to Reuters.
UnitedHealth Group had over 4.3 million total enrollees on its health plans in 2021, making it the fourth largest health insurance provider in the U.S., according to Forbes Advisor.
“The core story at UnitedHealth Group remains our colleagues delivering improved experiences for the people we serve and driving balanced growth even while swiftly and effectively addressing the attack on Change Healthcare,” Andrew Witty, CEO of UnitedHealth Group, said in the report.
UnitedHealth also set aside another $800 million in reserves to address unexpected costs from possible claim receipt timing disruptions due to the cyberattack, according to the report. The medical care ratio, which measures the share of claims doled out, increased to 84.2% in the first quarter compared to 82.2% last year due to Medicare funding reductions and considerations related to the data breach.
$UNH Earnings released;
UnitedHealth Non-GAAP EPS of $6.91 beats by $0.29, revenue of $99.79B beats by $490M.
A double beat for $UNH
Shares 5% in the pre-market. pic.twitter.com/BN4mi7qKi8
— Dividend Dynasty (@DividendDynasty) April 16, 2024
The effects of the data breach have lingered long after the attack, with payments being disrupted to U.S. doctors and healthcare facilities for at least a month following the event, according to Reuters. The cyberattack damaged UnitedHealth’s software’s ability in some places to verify insurance coverage, file claims and payout to individuals.
The company is also the target of an antitrust probe by the Department of Justice, which began in February before the breach. The Biden administration is investigating whether the company’s insurance unit and health services unit are stifling competition in the broader industry through excessive cooperation.
UnitedHealth did not immediately respond to a request to comment from the Daily Caller News Foundation.
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