UnitedHealth Invests $100 Million in Affordable Homes

(Bloomberg) -- UnitedHealth Group Inc. is investing $100 million in affordable housing, bringing the health-care giant's total funding for the cause to $500 million since 2011, the company said.

The money will go to nonprofit partners building more than 1,000 new homes for low-income renters over the next two years, with initial construction in the District of Columbia, Texas, and Oklahoma, the company said. The first units are expected to be ready in about six months.

UnitedHealth, which reported net income of about $3.5 billion in the first three months of 2020, has made supportive housing part of its strategy for high-risk homeless patients in its Medicaid program. The investment announced Thursday is more broadly targeted to create affordable units for the general public, not necessarily the company's own members.

The housing will be aimed at those making 30% or less than the area median income, said Heather Cianfrocco, chief executive officer of UnitedHealthcare Community & State. The division provides coverage for 6 million members on publicly financed Medicaid health plans in 31 states.

“We've been really dialing in on the most vulnerable,” Cianfrocco said in an interview. The Covid-19 pandemic highlighted the urgent need for stable housing. “It's really needed now, just based on the shortage of available homes.”

The company is working with two nonprofit groups, Stewards of Affordable Housing for the Future and the National Affordable Housing Trust, which will partner with other nonprofits who will develop, own and manage the housing units.

The Covid-19 pandemic has strained much of the health-care industry, but insurers have largely been spared. As people defer or forgo surgeries and other medical care, claims have dwindled, leaving insurance companies collecting premiums faster than they're incurring costs.

UnitedHealth previously said it would rebate premiums to some customers as part of a $1.5 billion pandemic-assistance program. Much of the industry is waiving cost-sharing requirements and other barriers that can inhibit people from seeking care.

The longer-term risk for health insurers is that rising unemployment could shrink their commercial health plan-business. Increased enrollment in Medicaid and Affordable Care Act health plans, which often operate at lower margins, could buffer some of those losses. UnitedHealth is expanding its footprint in the ACA marketplaces.

Cianfrocco said the company expects Medicaid enrollment to rise as well.

“You're seeing a federal and state system that will likely have to serve more,” she said. “We're readying for that and we've started to see some of the impacts of that.”