(Reuters) — UnitedHealth Group Inc. the largest U.S. health insurer, said on Thursday that a major public-sector customer had switched to a fee-based insurance service in the first quarter from a full-risk plan and lowered its 2013 revenue outlook.

UnitedHealth, which said first-quarter profit fell, cut its 2013 revenue expectation by $2.5 billion to $122 billion.

The switch comes as employers and insurance providers brace for the next wave of implementation of the Affordable Care Act, which will begin levying a new health insurance premium tax in 2014 to help pay for the expansion of coverage in the United States.

"There is an adverse incentive in the Affordable Care Act to move from full-risk insurance to a service, self-insurance type model," Jefferies & Co. analyst David Windley said.

This large customer move probably cost them a couple of pennies of profit in the first quarter, Mr. Windley said.

The company said first-quarter net profit was $1.2 billion, or $1.16 per share, down from $1.4 billion, or $1.31 per share a year earlier. It said profit fell in part because of lower U.S. government payments for its private Medicare services and prescription plans for older Americans.

Analysts on average had been expecting earnings of $1.14 per share, according to Thomson Reuters I/B/E/S.

Chris Rigg, an analyst at Susquehanna Financial Group, said investors may be surprised that the company did not beat earnings by more given reports of low use of hospital services this quarter, which typically benefits insurers. Hospital groups HCA Holdings Inc. and Health Management Associates Inc. both warned that admissions were weak in the first quarter.

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"The data points we've gotten from the providers would have suggested a larger beat in the quarter," Mr. Rigg said.

UnitedHealth's shares were trading around $59.99 in premarket activity, off about 3% from a close of $62.03 on the New York Stock Exchange.

UnitedHealth is facing higher operating costs related to a rise in the prices that doctors and other providers charge for their medical services. In addition, the Affordable Care Act requires it to provide more benefits in some plans, has increased taxes and sets limits on its profits.

The company, which acts as both an administrator of health plans for large corporations and provides health insurance plans, said that 5.6 million consumers were in its consumer-directed health-care products in the first quarter, up 18% year over year. In those plans consumers pay directly for a larger share of medical costs.

For the year, UnitedHealth said it still expected earnings of $5.25 to $5.50 per share, but the government sequestration would affect the top end of the range. Analysts are expecting earnings of $5.52 per share in 2013.

Revenue rose to $30.3 billion from $27.3 billion a year ago, helped by membership growth. The company added 1.1 million new members during the quarter to total 86 million as of March 31.