News in brief - June 6, 2011

United boosts dividends, authorizes share buybacks - Health system reform expected to benefit young adults

United boosts dividends, authorizes share buybacks

Investors in UnitedHealth Group, the country's largest publicly traded health insurer by revenue, will reap the benefits of its recent better-than-expected profits. The company announced May 25 that it will boost dividends and share repurchases, which benefit shareholders.

The company will pay a quarterly dividend of 16.25 cents per share, up from 12.5 cents per share, for a total annual dividend of 65 cents per share. United's board also authorized repurchasing up to 110 million shares over time. Executives then may choose when to make the repurchases, which boost per-share earnings.

United is not alone in increasing its dividends and share repurchases: WellPoint, Cigna and Aetna have announced either first-time or increased dividends during the last two quarters, and the same plans have bought back millions of dollars of their stock.

Health system reform expected to benefit young adults

Young adults are the least likely to have insurance and most likely will benefit significantly from the Patient Protection and Affordable Care Act, according to a report issued May 26 by the Commonwealth Fund.

"This is not an easy time for young adults," said Sara Collins, PhD, lead author and Commonwealth Fund vice president. "They are struggling to find employment in a difficult job market and are among the groups hardest hit by rising health care costs."

About 14.8 million people ages 19 to 29 were uninsured in 2009. Since Sept. 23, 2010, about 600,000 have become insured, because health system reform requires insurers providing dependent coverage do so up to age 26.

The report indicated that an additional 7.2 million young adults most likely would gain Medicaid coverage, and 4.9 million would become insured through state insurance exchanges, as these parts of reform are rolled out during the next few years.

The Commonwealth Fund report is available online (www.commonwealthfund.org/content/publications/issue-briefs/2011/may/helping-young-adults.aspx).