UnitedHealth Group Inc. said Monday that it will hire 1,700 people in the Twin Cities over the next six months, a sharp contrast to other big health insurers that have been sizing up job cuts amid industry consolidation.
Minnetonka-based UnitedHealth, the nation’s largest health insurer, said it is also looking to fill more than 1,000 jobs with people who could work remotely from anywhere in the country. The company also wants to add 140 customer service representatives in Duluth.
To some extent, the announcement represents UnitedHealth’s unique position among large health insurers, since its Optum division for health services is growing faster than the health insurance side of the business, said David Heupel, an analyst with Thrivent Financial in Minneapolis.
“This has been a company that has grown over and above their peers … with the Optum business being a unique part of that,” Heupel said. “It’s certainly not something you’ll see at the other larger players.”
UnitedHealth Group competes in a market that is undergoing fundamental changes with the federal Affordable Care Act. The law imposed new taxes on insurers, limited profits in some markets and restricted payments for Medicare health plans that have been a key source of growth.
But the law also expanded coverage through the federal Medicaid program, while expanding the individual market with tax credits and government-run insurance exchanges. And in the past year, commentary from UnitedHealth Group about the overall impact from this mix of forces has gotten more positive.
As of June 30, nearly 41.8 million people in the United States had medical insurance from UnitedHealthcare, up about 4 percent from a year earlier. Business was up across all segments, including commercial customers and enrollees in the Medicare and Medicaid health insurance programs.
The broad-based growth explains the need for more people, company spokesman Tyler Mason said. Currently, the company employs about 14,000 people in Minnesota and more than 170,000 people worldwide.
Heupel said UnitedHealth’s Optum unit could be hiring people to expand its pharmacy business, which other health insurers hire to manage drug spending in their health plans. Earlier this year, UnitedHealth announced the acquisition of an Illinois-based pharmaceutical benefits manager that will make Optum the third-largest player in that growth market.
The Optum division offers a variety of services not just to health insurers, but also to health care providers. The unit helps hospitals with bill collections, consults with clinics on how to manage physician practices and provides information technology services.
Optum has been growing because it offers tools that respond to government and private-sector demands for cost control in health care, said Sheryl Skolnick, an analyst with Mizuho Securities USA. But Skolnick said UnitedHealth’s insurance business could be hiring, too, as four of its largest competitors — Aetna, Anthem, Cigna and Humana — pursue mergers.
“They may see the distraction, if you will, from the customer perspective of: Who’s going to be my insurer? Anthem-Cigna, or Aetna-Humana,” Skolnick said. “They could be looking at an opportunity to gain meaningful market share.”
Mixed industry signals
There have been mixed signals about hiring in the health insurance industry. Eagan-based Blue Cross and Blue Shield of Minnesota is looking to hire 100 people, said company spokesman Jim McManus. But this summer, the company announced long-term plans to eliminate about 450 jobs in information technology.
Minnetonka-based Medica expects to add jobs as the health plan gains business through an expanded contract with the state’s Medicaid and MinnesotaCare health insurance programs. But Minneapolis-based UCare has talked about cutting hundreds of jobs because the HMO’s state contract is shrinking dramatically.
The company-specific moves play out against a backdrop where health carriers have been adding jobs for decades, according to a June report from the Insurance Information Institute.
“At least some of this growth is undoubtedly connected with the flood of health insurance applications, purchases and claims attributable to the Affordable Care Act (ACA), and some to population growth,” the group said. “But it is important to acknowledge that this rate of growth has been characteristic of this sector for decades — long before the ACA was proposed.”
The Duluth openings are connected to the company’s UnitedHealthcare health insurance division, while jobs in the Twin Cities span the insurance unit as well as at Optum.
Job openings in the Twin Cities range from finance and business operations to information technology and sales support. People in the Twin Cities can apply for the telecommuting positions, the company said. In Duluth, UnitedHealth has scheduled a job fair for next week.