UnitedHealth CEO sees more HMO consolidation

* But cautions regulatory view of mergers could toughen

* UnitedHealth shares off 1.8 percent

NEW YORK, May 29 (Reuters) - UnitedHealth Group Inc's (UNH.N: Quote, Profile, Research) chief executive envisions more consolidation in the health insurance sector over the next few years as healthcare reform shifts the competitive landscape.

Speaking at an investor conference on Friday, CEO Stephen Hemsley said opportunities for buyers will arise. UnitedHealth, the largest U.S. health insurer by market value, has used acquisitions as a key method to grow its business.

"I think there will be consolidation, and that's part of why I think there's market expansion opportunities," Hemsley said at the Sanford C. Bernstein conference, that was broadcast over the Internet.

But he cautioned that the Obama Administration will take a closer look at mergers.

"It will be a little more difficult of a regulatory environment to get mergers accomplished," Hemsley said. "The administration has sent some strong signals that they are going to take a much more conservative view of the positives of mergers, so I think it will be more challenging."

Analysts have speculated that size and technological advantages could become more crucial to adapt to changes to the healthcare system.

"You're going to need better information, you're going to need very serious technology to be able to get at the next stage of managing medical costs, and you're going to need a very significant cost advantage," Hemsley said.