Despite a bad economy and H1N1, UnitedHealth Group Inc. said Thursday that fourth-quarter profit rose 30 percent as growth in its government businesses offset the loss of commercial members.

Part of the jump was accounted for by the fact that the Minnetonka-based health insurer incurred a big legal settlement charge in the final quarter of 2008 to resolve a lawsuit over out-of-network reimbursements.

Net profit for the quarter ended Dec. 31 was up 30 percent to $994 million, or 81 cents per share, beating analyst forecasts of 73 cents per share.

Revenue was up 6 percent to $21.8 billion.

"UnitedHealth delivered a relatively strong performance in 2009 despite a difficult economy," Chief Executive Stephen Hemsley said in a conference call with Wall Street analysts.

Among the headwinds UnitedHealth and other U.S. insurers faced last year was the loss of members as people lost their jobs and higher COBRA costs from those who hung on to group insurance after losing their jobs. The H1N1 flu pandemic also added to medical costs.

For the full year, profit rose 28 percent to $3.8 billion, or $3.24 per share. Revenue was up 7 percent at $87.1 billion.

The company confirmed its 2010 profit outlook of between $2.90 and $3.10 per share.

Government enrollment up

The insurer's government businesses did well. Enrollment in its Medicare and Medicaid plans rose 12.5 percent from last year to 7.4 million people.

However, commercial enrollment was down 6 percent to 24.6 million people. More than half of that loss came from attrition, Hemsley said, adding that attrition continues to be a concern going into 2010.

The company's fourth-quarter medical cost ratio was 81.3 percent. That was up 50 basis points year-over-year but still better than expected as the H1N1 pandemic abated, the company said. The ratio shows how much of every premium dollar goes to paying medical costs and is closely watched as an indicator of profitability.

UnitedHealth's smaller ancillary businesses fared well, too.

Its pharmacy benefits unit, Prescription Solutions, reported a 21 percent increase in revenue to $3.78 billion for the fourth quarter. Revenue at Ingenix, its technology and data arm, was up 26 percent at $536 million for the quarter.

Hemsley declined to talk about how federal health care legislation might affect UnitedHealth, America's biggest health insurer by revenue.

"In 2011 and beyond, we will factor in health care reform, whether incremental or comprehensive," he said.

UnitedHealth's share price fell $1.45 to $33.10 Thursday as the market closed broadly lower.

Chen May Yee • 612-673-7434