8-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

Current Report Pursuant to
Section 13 or 15(d) of
the Securities Exchange Act of 1934

Date of report (Date of earliest event reported): July 15, 2004

UNITEDHEALTH GROUP INCORPORATED

(Exact name of registrant as specified in its charter)

Minnesota
(State or other jurisdiction
of incorporation) 0-10864
(Commission
File Number) 41-1321939
(I.R.S. Employer
Identification No.)

UnitedHealth Group Center, 9900 Bren Road East, Minnetonka, Minnesota
(Address of principal executive offices) 55343
(Zip Code)

Registrant’s telephone number, including area code: (952) 936-1300

N/A
(Former name or former address, if changed since last report.)

TABLE OF CONTENTS

	Item 12. Results of Operations and Financial Condition
Signatures
EXHIBITS
Press Release

Item 12. Results of Operations and Financial Condition

     On July 15, 2004, UnitedHealth Group Incorporated (the “Company”) issued a press release discussing second quarter 2004 results. A copy of the press release is furnished herewith as Exhibit 99 and incorporated in this Item 12 by reference. The press release contains forward-looking statements regarding the Company.

     To supplement our consolidated financial results as determined by generally accepted accounting principles (GAAP), the press release also discloses the following non-GAAP information which management believes provides useful information to investors:

     Certain account balances and financial measures have been presented in this earnings release excluding our AARP business. Management believes these disclosures are meaningful since underwriting gains or losses related to the AARP business are recorded as an increase or decrease to a rate stabilization fund (RSF) and the effects of changes in balance sheet amounts associated with the AARP program accrue to AARP policyholders through the RSF balance. Although the Company is at risk for underwriting losses to the extent cumulative net losses exceed the balance in the RSF, the Company has not been required to fund any underwriting deficits to date and management believes the RSF balance is sufficient to cover potential future underwriting or other risks associated with the contract.

CAUTIONARY STATEMENT FOR PURPOSES OF THE “SAFE HARBOR” PROVISIONS OF THE
PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

     The Company and its representatives may from time to time make written and oral forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 (PSLRA), including statements in presentations, press releases, filings with the Securities and Exchange Commission, reports to shareholders and in meetings with analysts and investors. These statements may contain information about financial prospects, economic conditions, trends and unknown certainties. We caution that actual results could differ materially from those that management expects, depending on the outcome of certain factors. These forward-looking statements involve risks and uncertainties that may cause our actual results to differ materially from the results discussed in the forward-looking statements. Any or all forward-looking statements we make may turn out to be wrong. They can be affected by inaccurate assumptions we might make or by known or unknown risks and uncertainties. The following discussion contains certain cautionary statements regarding our business that investors and others should consider. This discussion is intended to take advantage of the “safe harbor” provisions of the PSLRA. Except to the extent otherwise required by federal securities laws, in making these cautionary statements, we do not undertake to address or update each factor in future filings or communications regarding our business or operating results, and do not undertake to address how any of these factors may have caused results to differ from discussions or information contained in previous filings or communications. In addition, any of the matters discussed below may have affected our past, as well as current, forward-looking statements about future results. Many factors discussed below will be important in determining future results. Consequently, no forward-looking statement can be guaranteed. Actual future results may vary materially from expectations expressed in our prior communications.

     We must effectively manage our health care costs.

     Under risk-based product arrangements, we assume the risk of both medical and administrative costs for our customers in return for monthly premiums. Premium revenues from risk-based products (excluding AARP) comprise approximately 75% of our total consolidated revenues. We use approximately 80% to 85% of our premium revenues to pay the costs of health care services delivered to our customers. The profitability of our risk-based products depends in large part on our ability to accurately predict, price for, and effectively manage health care costs. Total health care costs are affected by the number of individual services rendered and the cost of each service. Our premium revenue is typically fixed in price for a 12-month period and is generally priced one to four months before contract commencement. Services are delivered and related costs are incurred when the contract commences. Although we base the premiums we charge on our estimate of future health care costs over the fixed premium period, inflation, regulations and other factors may cause actual costs to exceed what was estimated and reflected in premiums. These factors may include increased use of services, increased cost of individual services, catastrophes, epidemics, the introduction of new or costly treatments and technology, new mandated benefits or other regulatory changes, insured population characteristics and seasonal changes in the level of health care use. Relatively small differences between predicted and actual medical costs as a percentage of premium revenues can result in significant changes in our financial results. For example, if medical costs increased by one percent for UnitedHealthcare’s commercial insured products, our annual net earnings for 2003 would have been reduced by approximately $75 million. In addition, the financial results we report for any particular period include estimates of costs incurred for which the underlying claims have not been

received by us or for which the claims have been received but not processed. If these estimates prove too high or too low, the effect of the change will be included in future results.

     We face intense competition in many of our markets and customers have flexibility in moving between competitors.

     Our businesses compete throughout the United States and face significant competition in all of the geographic markets in which they operate. For our Uniprise and Health Care Services businesses, competitors include Aetna, Anthem, Cigna, Coventry, Humana, PacifiCare, Oxford, WellPoint, numerous for profit and not for profit organizations operating under licenses from the Blue Cross Blue Shield Association and other enterprises concentrated in more limited geographic areas. Our Specialized Care Services and Ingenix businesses also compete with a number of businesses. Moreover, we believe that barriers to entry in many markets are not substantial, so the addition of new competitors can occur relatively easily, and customers enjoy significant flexibility in moving between competitors. In particular markets, these competitors may have capabilities that give them a competitive advantage. Greater market share, established reputation, superior supplier arrangements, existing business relationships, and other factors all can provide a competitive advantage. In addition, significant merger and acquisition activity has occurred in the industries in which we operate, both as to our competitors and suppliers in these industries. This level of consolidation makes it more difficult for us to retain or increase customers, to improve the terms on which we do business with our suppliers, and to maintain or advance profitability.

     Our relationship with AARP is significant to our Ovations business.

     Under our 10-year contract with AARP which was initiated in 1998, we provide Medicare Supplement and Hospital Indemnity health insurance and other products to AARP members. As of March 31, 2004, our portion of AARP’s insurance program represented approximately $4.1 billion in annual net premium revenue from approximately 3.8 million AARP members. The AARP contract may be terminated early by us or AARP under certain circumstances, including a material breach by either party, insolvency of either party, a material adverse change in the financial condition of either party, and by mutual agreement. The success of our AARP arrangement depends, in part, on our ability to service AARP and its members, develop additional products and services, price the products and services competitively, and respond effectively to federal and state regulatory changes. Additionally, events that adversely affect AARP or one of its other business partners for its member insurance program could have an adverse effect on the success of our arrangement with AARP. For example, if customers were dissatisfied with the products AARP offered or its reputation, if federal legislation limited opportunities in the Medicare market, or if the services provided by AARP’s other business partners were unacceptable, our business could be adversely affected.

     The effects of the new Medicare reform legislation on our business are uncertain.

     Recently enacted Medicare reform legislation is complex and wide-ranging. There are numerous provisions in the legislation that will influence our business, although at this early stage, it is difficult to predict the extent to which our business will be affected. While uncertain as to impact, we believe the increased funding provided in the legislation will intensify competition in the seniors health services market.

     Our business is subject to intense government scrutiny and we must respond quickly and appropriately to frequent changes in government regulations.

     Our business is regulated at the federal, state, local and international levels. The laws and rules governing our business and interpretations of those laws and rules are subject to frequent change. Broad latitude is given to the agencies administering those regulations. Existing or future laws and rules could force us to change how we do business, restrict revenue and enrollment growth, increase our health care and administrative costs and capital requirements, and increase our liability in federal and state courts for coverage determinations, contract interpretation and other actions. We must obtain and maintain regulatory approvals to market many of our products, to increase prices for certain regulated products and to consummate our acquisitions and dispositions. Delays in obtaining or our failure to obtain or maintain these approvals could reduce our revenue or increase our costs.

     We participate in federal, state and local government health care coverage programs. These programs generally are subject to frequent change, including changes that may reduce the number of persons enrolled or eligible, reduce the amount of reimbursement or payment levels, or increase our administrative or health care costs under such programs. Such changes have adversely affected our financial results and willingness to participate in such programs in the past and may do so in the future.

     State legislatures and Congress continue to focus on health care issues. Legislative and regulatory proposals at state and federal levels may affect certain aspects of our business, including contracting with physicians, hospitals and other health care professionals; physician reimbursement methods and payment rates; coverage determinations; claim payments and processing; use and maintenance of individually identifiable health information; and government-sponsored programs. We cannot predict if any of these initiatives will ultimately become binding law or regulation, or, if enacted, what their terms will be, but their enactment could increase our costs, expose us to expanded liability, require us to revise the ways in which we conduct business or put us at risk for a loss of business.

     We are also subject to various governmental investigations, audits and reviews. Such oversight could result in our loss of licensure or our right to participate in certain programs, or the imposition of civil or criminal fines, penalties and other sanctions. In addition, disclosure of any adverse investigation or audit results or sanctions could damage our reputation in various markets and make it more difficult for us to sell our products and services. We are currently involved in various governmental investigations, audits and reviews. These include routine, regular and special investigations, audits and reviews by the Centers for Medicare and Medicaid Services, state insurance and health and welfare departments and state attorneys general, the Office of Personnel Management, the Office of the Inspector General and U.S. Attorney General.

     We depend on our relationships with physicians, hospitals and other health care providers.

     We contract with physicians, hospitals, pharmaceutical benefit service providers and pharmaceutical manufacturers, and other health care providers for favorable prices. A number of organizations are advocating for legislation that would exempt certain of these physicians and health care professionals from federal and state antitrust laws. In any particular market, these physicians and health care professionals could refuse to contract, demand higher payments, or take other actions that could result in higher health care costs, less desirable products for customers or difficulty meeting regulatory or accreditation requirements. In some markets, certain health care providers, particularly hospitals,

physician/hospital organizations or multi-specialty physician groups, may have significant market positions or near monopolies that could result in diminished bargaining power on our part.

     The nature of our business exposes us to significant litigation risks and our insurance coverage may not be sufficient to cover some of the costs associated with litigation.

     Periodically, we become a party to the types of legal actions that can affect any business, such as employment and employment discrimination-related suits, employee benefit claims, breach of contract actions, tort claims, shareholder suits, and intellectual property-related litigation. In addition, because of the nature of our business, we are routinely made party to a variety of legal actions related to the design, management and offerings of our services. These matters include, but are not limited to, claims related to health care benefits coverage, medical malpractice actions, contract disputes and claims related to disclosure of certain business practices. In 1999, a number of class action lawsuits were filed against us and virtually all major entities in the health benefits business. The suits are purported class actions on behalf of physicians for alleged breaches of federal statutes, including ERISA and the Racketeer Influenced Corrupt Organization Act (“RICO”). Although the expenses which we have incurred to date in defending the 1999 class action lawsuits have not been material to our business, we will continue to incur expenses in the defense of the 1999 class action litigation and other matters, even if they are without merit.

     Following the events of September 11, 2001, the cost of business insurance coverage has increased significantly. As a result, we have increased the amount of risk that we self-insure, particularly with respect to matters incidental to our business. We believe that we are adequately insured for claims in excess of our self-insurance; however, certain types of damages, such as punitive damages, are not covered by insurance. We record liabilities for our estimates of the probable costs resulting from self-insured matters. Although we believe the liabilities established for these risks are adequate, it is possible that the level of actual losses may exceed the liabilities recorded.

     Our businesses depend significantly on effective information systems and the integrity of the data in our information systems.

     Our ability to adequately price our products and services, provide effective and efficient service to our customers, and to accurately report our financial results depends significantly on the integrity of the data in our information systems. As a result of our acquisition activities, we have acquired additional systems. We have been taking steps to reduce the number of systems we operate and have upgraded and expanded our information systems capabilities. If the information we rely upon to run our businesses was found to be inaccurate or unreliable or if we fail to maintain effectively our information systems and data integrity, we could lose existing customers, have difficulty attracting new customers, have problems in determining medical cost estimates and establishing appropriate pricing, have customer and physician and other health care provider disputes, have regulatory problems, have increases in operating expenses or suffer other adverse consequences.

     We depend on independent third parties, such as IBM, Unisys and Medco Health Solutions, Inc., with whom we have entered into agreements, for significant portions of our data center operations and pharmacy benefits management and processing, respectively. Even though we have appropriate provisions in our agreements with IBM, Unisys and Medco, including provisions with respect to specific performance standards, covenants, warranties, audit rights, indemnification, and other provisions, our dependence on these third parties makes our operations vulnerable to their failure to perform adequately

under the contracts, due to internal or external factors. Although there are a limited number of service organizations with the size, scale and capabilities to effectively provide certain of these services, especially with regard to pharmacy benefits processing and management, we believe that other organizations could provide similar services on comparable terms. A change in service providers, however, could result in a decline in service quality and effectiveness or less favorable contract terms.

     Business acquisitions may increase costs, liabilities, or create disruptions in our business.

     We have recently completed several business acquisitions. We review the records of companies we plan to acquire, however, even an in-depth review of records may not reveal existing or potential problems or permit us to become familiar enough with a business to assess fully its capabilities and deficiencies. As a result, we may assume unanticipated liabilities, or an acquisition may not perform as well as expected. We face the risk that the returns on acquisitions will not support the expenditures or indebtedness incurred to acquire such businesses, or the capital expenditures needed to develop such businesses. We also face the risk that we will not be able to integrate acquisitions into our existing operations effectively. Integration may be hindered by, among other things, differing procedures, business practices and technology systems.

     We must comply with emerging restrictions on patient privacy, including taking steps to ensure compliance by our business associates who obtain access to sensitive patient information when providing services to us.

     The use of individually identifiable data by our businesses is regulated at international, federal and state levels. These laws and rules are changed frequently by legislation or administrative interpretation. Various state laws address the use and maintenance of individually identifiable health data. Most are derived from the privacy provisions in the federal Gramm-Leach-Bliley Act and HIPAA. HIPAA also imposes guidelines on our business associates (as this term is defined in the HIPAA regulations). Even though we provide for appropriate protections through our contracts with our business associates, we still have limited control over their actions and practices. Compliance with these proposals and new regulations may result in cost increases due to necessary systems changes, the development of new administrative processes, and the effects of potential noncompliance by our business associates. They also may impose further restrictions on our use of patient identifiable data that is housed in one or more of our administrative databases.

     Our knowledge and information-related businesses depend significantly on our ability to maintain proprietary rights to our databases and related products.

     We rely on our agreements with customers, confidentiality agreements with employees, and our trade secrets, copyrights and patents to protect our proprietary rights. These legal protections and precautions may not prevent misappropriation of our proprietary information. In addition, substantial litigation regarding intellectual property rights exists in the software industry, and we expect software products to be increasingly subject to third-party infringement claims as the number of products and competitors in this industry segment grows. Such litigation and misappropriation of our proprietary information could hinder our ability to market and sell products and services.

The effects of the war on terror and future terrorist attacks could have a severe impact on the health care industry.

     The terrorist attacks launched on September 11, 2001, the war on terrorism, the threat of future acts of terrorism and the related concerns of customers and providers have negatively affected, and may continue to negatively affect, the U.S. economy in general and our industry specifically. Depending on the government’s actions and the responsiveness of public health agencies and insurance companies, future acts of terrorism and bio-terrorism could lead to, among other things, increased use of health care services including, without limitation, hospital and physician services; loss of membership in health plans we administer as a result of lay-offs or other reductions of employment; adverse effects upon the financial condition or business of employers who sponsor health care coverage for their employees; disruption of our information and payment systems; increased health care costs due to restrictions on our ability to carve out certain categories of risk, such as acts of terrorism; and disruption of the financial and insurance markets in general.

     The market price of our common stock may be particularly sensitive due to the nature of the business in which we operate.

     The market prices of the securities of the publicly-held companies in the industry in which we operate have shown volatility and sensitivity in response to many external factors, including general market trends, public communications regarding managed care, litigation and judicial decisions, legislative or regulatory actions, health care cost trends, pricing trends, competition, earnings, membership reports of particular industry participants and acquisition activity. Despite our specific outlook or prospects, the market price of our common stock may decline as a result of any of these external factors. By way of illustration, our stock price has ranged from $35.33 on December 31, 2001 to $64.44 on March 31, 2004 (as adjusted to reflect stock splits and dividends).

Signatures

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: July 15, 2004

UNITEDHEALTH GROUP INCORPORATED
By:	/s/ David J. Lubben
	David J. Lubben
	General Counsel & Secretary

EXHIBITS

Number	Description
99	Press Release, dated July 15, 2004, issued by the Company

EX-99

Exhibit 99

N E W S    R E L E A S E

Contacts:	John S. Penshorn
	Director of Capital Markets
	Communications & Strategy
	952-936-7214
	Patrick J. Erlandson
	Chief Financial Officer
	952-936-5901

(For Immediate Release)

UNITEDHEALTH GROUP REPORTS RECORD

SECOND QUARTER NET EARNINGS OF $0.93 PER SHARE

• Revenues for Second Quarter of $8.7 Billion, Up 23%

• Operating Margin at 10.9%

• Operating Cash Flows Exceeded $1 Billion, Up 33%

• Earnings Per Share Increased 31%

MINNEAPOLIS (July 15, 2004) — UnitedHealth Group (NYSE: UNH) achieved record results in the second quarter of 2004, reported Chairman and CEO William W. McGuire, M.D. Second quarter results were driven by strong and diverse growth and operating performance across the spectrum of UnitedHealth Group businesses, with every reporting segment producing both year-over-year and sequential quarterly gains in revenues, earnings from operations and operating margins.

Quarterly Financial Performance

	Three Months Ended
	June 30,			March 31,			June 30,
	2004			2004			2003
Revenues	$8.70 billion			$8.14 billion			$7.09 billion
Earnings From Operations	$945 million			$876 million			$709 million
Operating Margin		10.9	%		10.8	%		10.0	%
Customer Summary (People in Thousands, As of Period End)
Commercial Businesses		24,465			24,245			22,975
Governments		9,525			9,465			9,460
Consumers		1,200			1,190			335
Business-to-Business Partners		19,260			19,330			15,405

UnitedHealth Group Highlights

• Second quarter earnings per share of $0.93 increased 31 percent from $0.71 in the second quarter of 2003, and improved 5 cents or 6 percent from the first quarter of 2004.

• Second quarter consolidated net earnings increased to $596 million, up $157 million or 36 percent year-over-year and $42 million or 8 percent on a sequential quarter basis.

• Consolidated revenues increased $1.6 billion or 23 percent year-over-year, and $560 million or 7 percent from the first quarter of 2004, reflecting balanced growth across the Company’s business segments.

• Operating costs were 15.5 percent of revenues in the second quarter, a strong improvement of 140 basis points from the second quarter of 2003 and 70 basis points from the first quarter of 2004.

• Earnings from operations increased to $945 million in the second quarter, up $236 million or 33 percent over the prior year, and up $69 million or 8 percent sequentially.

• Consolidated second quarter operating margin improved to 10.9 percent from 10.0 percent in second quarter 2003 and 10.8 percent in first quarter 2004.

UnitedHealth Group Highlights — Continued

• Excluding the AARP division of Ovations,

• June 30, 2004 accounts receivable, at 5.6 days sales outstanding, represented the sixth consecutive quarter with accounts receivable below 6 days.

• Medical costs days payable, at 68 days excluding the results of the recent Mid-Atlantic Medical Services, Inc. (MAMSI) acquisition, was consistent with results in previous periods. Including MAMSI, which carried a lower 50 medical costs days payable in the quarter, reduces overall medical costs days payable by one day.

• Medical costs payable, excluding AARP, increased $744 million or 24 percent year-over-year, standing at $3.9 billion at June 30, 2004.

• During the second quarter, the Company realized prior period favorable development of $60 million in its estimates of medical costs incurred.

• Cash flows from operations were $1.02 billion for the second quarter, up 33 percent year-over-year, and were $1.93 billion for the six months of 2004.

• The Company expects to complete its acquisition of Oxford Health Plans, Inc. by September 30, 2004, dependent upon the receipt of remaining regulatory approvals. This combination will significantly expand offerings for employers and consumers in the northeastern region of the country.

• The Company repurchased 9.6 million shares in the second quarter, bringing year-to-date share repurchase and capital deployed through June 30, 2004, to 20 million shares and $1.25 billion, respectively.

• Second quarter 2004 annualized return on equity was approximately 33 percent.

Closing Comment
“We expect strong results from our businesses in the second half of this year,” Dr. McGuire said. “Our internal revenue growth rate is poised to accelerate, and recent strategic acquisitions will provide meaningful advances for customers as well as strong financial contributions to our company. We now anticipate full-year earnings of $3.79 to $3.82 per share, excluding any gains from the Oxford Health Plans merger. Oxford should be accretive to earnings at the rate of about $0.04 per share per quarter, beginning immediately upon closing.”

Business Description — Health Care Services
The Health Care Services segment consists of the UnitedHealthcare, AmeriChoice and Ovations business units. UnitedHealthcare coordinates network-based health and well-being services on behalf of local employers and consumers. AmeriChoice facilitates and manages health care services for state Medicaid programs and their beneficiaries. Ovations delivers health and well-being services to Americans over the age of 50, including the administration of supplemental health insurance coverage on behalf of AARP.

Quarterly Financial Performance

	Three Months Ended
	June 30,			March 31,			June 30,
	2004			2004			2003
Revenues	$7.59 billion			$7.05 billion			$6.11 billion
Earnings From Operations	$636 million			$577 million			$450 million
Operating Margin		8.4	%		8.2	%		7.4	%

Key Developments for Health Care Services

• Revenues for Health Care Services grew $1.5 billion or 24 percent year-over-year and $538 million or 8 percent sequentially to $7.6 billion in the second quarter of 2004.

• Second quarter Health Care Services operating earnings of $636 million increased $186 million or 41 percent year-over-year and $59 million or 10 percent sequentially.

• Second quarter operating margin of 8.4 percent expanded 100 basis points year-over-year and 20 basis points sequentially.

Key Developments for Health Care Services — Continued

• Second quarter revenues of $5.0 billion for UnitedHealthcare increased $1.2 billion or 31 percent year-over-year.

• UnitedHealthcare served 9.3 million people as of June 30, 2004, an increase of 1.5 million individuals or 19 percent year-over-year, including growth of 40,000 individuals in the second quarter of 2004.

• UnitedHealthcare’s second quarter 2004 commercial medical care ratio of 79.4 percent was comparable to the 79.3 percent ratio in the first quarter of 2004, and improved from the 80.7 percent ratio in the second quarter of 2003.

• AmeriChoice second quarter revenues of $773 million increased $123 million or 19 percent year-over-year and $45 million or 6 percent from the first quarter of 2004.

• AmeriChoice serves more than 1.2 million people, having increased enrollment by 160,000 people or 15 percent year-over-year. In the second quarter of 2004, AmeriChoice grew enrollment by 10,000 individuals.

• Ovations reported record revenues of $1.8 billion in the second quarter, up $178 million or 11 percent year-over-year and $68 million or 4 percent from first quarter 2004.

• During the second quarter, Ovations received preliminary approval from the Centers for Medicare and Medicaid Services for two disease management demonstration projects. Ovations will focus on cardiovascular disease management in three states and coordinate care for citizens who are dually eligible for Medicare and Medicaid in five states.

• Ovations’ participation in the drug discount card market continues to expand, with approximately 250,000 new consumers added in the second quarter. More than two million people now access an Ovations Pharmacy Solutions offering, up 21 percent year-over-year. During the second quarter, the business facilitated 9 million retail and mail-order transactions.

Business Description
Uniprise delivers network-based health and well-being services, business-to-business transaction processing services, consumer connectivity, and technology support services to large employers and health plans, and provides health-related consumer and financial transaction products and services.

Quarterly Financial Performance

	Three Months Ended
	June 30,			March 31,			June 30,
	2004			2004			2003
Revenues	$843 million			$835 million			$775 million
Earnings From Operations	$170 million			$167 million			$153 million
Operating Margin		20.2	%		20.0	%		19.7	%

Key Developments

• Second quarter revenues of $843 million increased 9 percent and 1 percent over second quarter 2003 and first quarter 2004, respectively.

• Uniprise serves more than 9.5 million people in the national multi-location employer segment. Membership in that segment decreased a net 10,000 people in the second quarter of 2004 due to the reduction of 90,000 individuals lost due to the bankruptcy of a significant customer, which had been anticipated, and continued enrollment attrition affecting the large employer segment. This reduction was partially offset by the inclusion of approximately 80,000 individuals under the Passport from UnitedHealth^SM product offering.

• Large employers with product needs addressing basic affordability and access issues are showing strong interest in purchasing progressive Uniprise offerings such as Passport from UnitedHealth^SM, UnitedHealth Basics^SM, UnitedHealth Allies^SM and iPlan®.

• The combination of top-line growth and margin expansion lifted second quarter Uniprise operating earnings to $170 million, an increase of $17 million or 11 percent year-over-year and $3 million or 2 percent on a sequential quarter basis.

• The Uniprise operating margin of 20.2 percent expanded 50 basis points year-over-year and improved 20 basis points from first quarter 2004.

Business Description
Specialized Care Services offers a comprehensive array of specialized benefits, networks, services and resources to help consumers improve their health and well-being.

Quarterly Financial Performance

	Three Months Ended
	June 30,			March 31,			June 30,
	2004			2004			2003
Revenues	$573 million			$554 million			$463 million
Earnings From Operations	$119 million			$113 million			$93 million
Operating Margin		20.8	%		20.4	%		20.1	%

Key Developments

• Second quarter revenues rose to $573 million, up $110 million or 24 percent year-over-year, and up $19 million or 3 percent from the first quarter of 2004, with strong customer growth across the portfolio of Specialized Care Services companies.

• Specialized Care Services businesses are currently launching or expanding service offerings in maternity and infertility management and chronic kidney failure, as well as providing a new array of wellness solutions to health plans and other intermediaries.

• In the second quarter, earnings from operations of $119 million increased $26 million or 28 percent year-over-year and $6 million or 5 percent sequentially.

• The Specialized Care Services operating margin of 20.8 percent expanded 70 basis points year-over-year and 40 basis points from the first quarter of 2004.

Business Description
Ingenix is an international leader in the field of health care data, analysis and application. Ingenix serves multiple health care market segments on a business-to-business basis, including pharmaceutical companies, health insurers and other payers, physicians and other health care providers, large employers and governments.

Quarterly Financial Performance

	Three Months Ended
	June 30,			March 31,			June 30,
	2004			2004			2003
Revenues	$146 million			$140 million			$126 million
Earnings From Operations	$20 million			$19 million			$13 million
Operating Margin		13.7	%		13.6	%		10.3	%

Key Developments

• Ingenix revenues increased $20 million or 16 percent year-over-year, to $146 million in the second quarter of 2004.

• In the second quarter, four Fortune 200 companies purchased Ingenix Parallax i® business intelligence software application packages that analyze key cost trends and drivers across the spectrum of health and related employee benefits on an enterprise basis.

• Ingenix also had significant sales of its latest release of ClaimsManager software, which enables large physician groups and integrated health care delivery systems to optimize their billing efficiency by collecting, editing and analyzing their medical claims prior to submission to payers.

• Ingenix operating earnings increased $7 million or 54 percent year-over-year as operating margin increased to 13.7 percent or 340 basis points from second quarter 2003.

About UnitedHealth Group
UnitedHealth Group is a diversified health and well-being company that provides a broad spectrum of resources and services to help people improve their health and well-being through all stages of life. Consolidated UnitedHealth Group operating results include the operating performance of the Company’s four reportable business segments — Health Care Services (which includes the results of UnitedHealthcare, AmeriChoice and Ovations), Uniprise, Specialized Care Services and Ingenix.

Forward-Looking Statements
This news release may contain statements, estimates or projections that constitute “forward-looking” statements as defined under U.S. federal securities laws. Generally the words “believe,” “expect,” “intend,” “estimate,” “anticipate,” “project,” “will” and similar expressions identify forward-looking statements, which generally are not historical in nature. By their nature, forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from our historical experience and our present expectations or projections. A list and description of some of the risks and uncertainties can be found in our reports filed with the Securities and Exchange Commission from time to time, including our annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K. You should not place undue reliance on forward-looking statements, which speak only as of the date they are made. Except to the extent otherwise required by federal securities laws, we do not undertake to publicly update or revise any forward-looking statements.

Earnings Conference Call
As previously announced, UnitedHealth Group will discuss the Company’s results, strategy and future outlook on a conference call with investors at 8:45 a.m. Eastern time today. UnitedHealth Group will host a live webcast of this conference call from the Investor Information page of the Company’s Web site (www.unitedhealthgroup.com). The webcast replay of the call will be available on the same site for one week following the live call. The conference call replay can also be accessed by dialing 1-800-642-1687, conference ID # 8218045. This earnings release and the Form 8-K dated July 15, 2004, which may also be accessed in the Investor Information section of the Company’s Web site, include a reconciliation of non-GAAP financial measures.

###

UNITEDHEALTH GROUP

Earnings Release Schedules and Supplementary Information
Quarter Ended June 30, 2004

• Consolidated Statements of Operations

• Condensed Consolidated Balance Sheets

• Condensed Consolidated Statements of Cash Flows

• Segment Financial Information

• Customer Profile Summary

UNITEDHEALTH GROUP
CONSOLIDATED STATEMENTS OF OPERATIONS
(in millions, except per share data)
(unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,
	2004			2003			2004			2003
REVENUES
Premiums	$	7,801		$	6,248		$	15,065		$	12,396
Services		813			779			1,602			1,549
Investment and Other Income		90			60			181			117
Total Revenues		8,704			7,087			16,848			14,062
COSTS
Medical Costs		6,326			5,109			12,195			10,159
Operating Costs		1,346			1,195			2,663			2,394
Depreciation and Amortization		87			74			169			147
Total Costs		7,759			6,378			15,027			12,700
EARNINGS FROM OPERATIONS		945			709			1,821			1,362
Interest Expense		(28	)		(24	)		(52	)		(47	)
EARNINGS BEFORE INCOME TAXES		917			685			1,769			1,315
Provision for Income Taxes		(321	)		(246	)		(619	)		(473	)
NET EARNINGS	$	596		$	439		$	1,150		$	842
BASIC NET EARNINGS PER COMMON SHARE	$	0.98		$	0.74		$	1.90		$	1.42
DILUTED NET EARNINGS PER COMMON SHARE	$	0.93		$	0.71		$	1.81		$	1.36
Diluted Weighted-Average Common Shares Outstanding		639			618			635			621

UNITEDHEALTH GROUP
CONDENSED CONSOLIDATED BALANCE SHEETS
(in millions)
(unaudited)

	June 30,		December 31,
	2004		2003
ASSETS
Cash and Short-Term Investments	$	3,509	$	2,748
Accounts Receivable, net		836		745
Other Current Assets		2,683		2,627
Total Current Assets		7,028		6,120
Long-Term Investments		6,684		6,729
Other Long-Term Assets		7,171		4,785
Total Assets	$	20,883	$	17,634
LIABILITIES AND SHAREHOLDERS’ EQUITY
Medical Costs Payable	$	4,806	$	4,152
Commercial Paper and Current Maturities of Long-Term Debt		150		229
Other Current Liabilities		4,416		4,387
Total Current Liabilities		9,372		8,768
Long-Term Debt, less current maturities		2,250		1,750
Future Policy Benefits for Life and Annuity Contracts		1,614		1,517
Deferred Income Taxes and Other Liabilities		529		471
Shareholders’ Equity		7,118		5,128
Total Liabilities and Shareholders’ Equity	$	20,883	$	17,634

The table below summarizes certain balance sheet data excluding AARP related amounts.

	June 30, 2004			December 31, 2003		June 30, 2003
Accounts Receivable, net	$	458		$	393	$	356
Other Current Assets	$	784		$	668	$	642
Other Current Liabilities	$	3,051		$	2,950	$	2,549
Medical Costs Payable	$	3,894		$	3,278	$	3,150
Days Medical Costs in Medical Costs Payable		67	(a)		68		68

(a) Excluding the impact on Days Medical Costs in Medical Costs Payable of Mid Atlantic Medical Services Inc., which has 50 days in Medical Costs Payable, Days Medical Costs in Medical Costs Payable would have been 68 days.

UNITEDHEALTH GROUP
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions)
(unaudited)

	Six Months Ended June 30,
	2004			2003
Operating Activities
Net Earnings	$	1,150		$	842
Noncash Items:
Depreciation and amortization		169			147
Deferred income taxes and other		27			(5	)
Net changes in operating assets and liabilities		581			506
Cash Flows From Operating Activities		1,927			1,490
Investing Activities
Cash paid for acquisitions, net of cash assumed		(638	)		(56	)
Purchases of property, equipment and capitalized software		(159	)		(181	)
Net sales and maturities/(purchases) of investments		348			604
Cash Flows (Used For) From Investing Activities		(449	)		367
Financing Activities
Common stock repurchases		(1,253	)		(859	)
Net change in commercial paper and debt		421			(11	)
Other, net		192			136
Cash Flows Used For Financing Activities		(640	)		(734	)
Increase in cash and cash equivalents		838			1,123
Cash and cash equivalents, beginning of period		2,262			1,130
Cash and cash equivalents, end of period	$	3,100		$	2,253
Supplemental Schedule of Noncash Investing Activities:
Common Stock Issued for Acquisitions	$	1,932

UNITEDHEALTH GROUP
SEGMENT FINANCIAL INFORMATION
(in millions)
(unaudited)

REVENUES

	Three Months Ended June 30,						Six Months Ended June 30,
	2004			2003			2004			2003
UnitedHealthcare	$	5,004		$	3,823		$	9,583		$	7,590
Ovations		1,811			1,633			3,554			3,243
AmeriChoice		773			650			1,501			1,287
Health Care Services		7,588			6,106			14,638			12,120
Uniprise		843			775			1,678			1,544
Specialized Care Services		573			463			1,127			917
Ingenix		146			126			286			247
Corporate and eliminations		(446	)		(383	)		(881	)		(766	)
Total Consolidated	$	8,704		$	7,087		$	16,848		$	14,062

EARNINGS FROM OPERATIONS

	Three Months Ended June 30,				Six Months Ended June 30,
	2004		2003		2004		2003
Health Care Services	$	636	$	450	$	1,213	$	852
Uniprise		170		153		337		305
Specialized Care Services		119		93		232		181
Ingenix		20		13		39		24
Total Consolidated	$	945	$	709	$	1,821	$	1,362

UNITEDHEALTH GROUP
CUSTOMER PROFILE SUMMARY
(in thousands)
(unaudited)

	June		March		December		June		December
Customer Category	2004		2004		2003		2003		2002
Commercial Businesses
Risk-based		9,345		9,370		8,900		8,910		8,285
Fee-based		15,120		14,875		13,570		14,065		12,825
Governments
Federal		4,140		4,130		4,325		4,335		4,525
State and municipal		5,385		5,335		5,035		5,125		5,025
Consumers		1,200		1,190		1,190		335		305
Business-to-Business Partners		19,260		19,330		17,440		15,405		15,795
Grand Total		54,450		54,230		50,460		48,175		46,760

HealthAllies members of 805,000 at June 30, 2004 and 775,000 at March 31, 2004 are included with Consumers and Risk-based Commercial Businesses in the Customer Profile Summary above and are not reported within Uniprise in the Supplemental Franchise Profile below.

Supplemental Franchise Profile -	June			March		December		June		December
Health Care Services and Uniprise	2004 (a)			2004 (a)		2003		2003		2002
Health Care Services:
Risk-based commercial		6,225			6,200		5,400		4,985		5,070
Fee-based commercial		3,060			3,045		2,895		2,805		2,715
Medicare		240			235		230		225		225
Medicaid		1,230			1,220		1,105		1,070		1,030
Total Health Care Services		10,755			10,700		9,630		9,085		9,040
Uniprise		9,520	(b)		9,530		9,060		9,200		8,640

(a)	Includes 920,000 risk-based commercial, 90,000 fee-based commercial, 50,000 Uniprise and 95,000 Medicaid individuals served in connection with the acquisitions of Mid-Atlantic Medical Services, Inc. and other businesses in the first quarter of 2004.
(b)	Includes 80,000 fee-based commercial individuals served pursuant to the Passport from UnitedHealth product offering.