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NEW YORK (Reuters)—The U.S. defense department has sustained a protest by UnitedHealth Group Inc. over a western region military health contract, reopening the contract for new bids, the company said Thursday.
The action could pave the way for UnitedHealth to win the Tricare West Region contract, which had gone to the TriWest Healthcare Alliance in July 2009. TriWest, which is comprised of nonprofit insurers and university hospital systems, had placed the value of the contract at $16 billion.
UnitedHealth is also protesting the award of the south region Tricare contract to Humana Inc., a contract that had originally been awarded to UnitedHealth.
No company can have multiple Tricare contracts.
Either contract is likely worth less than 5 cents per share to UnitedHealth's 2012 earnings, according to Wells Fargo analyst Peter Costa. Analysts on average expect UnitedHealth to earn $4.20 per share in 2012, according to Thomson Reuters I/B/E/S.
Shares of UnitedHealth, the largest U.S. health insurer by market value, were unchanged at $44.96 in premarket trading.
WASHINGTONPresident Barack Obama has signed into law legislation that allows adult children whose parents are in the Tricare health care program, which is available to members of the military and their dependents, to retain coverage up to age 26.