UnitedHealth earnings plunge 41%, issues soft 2026 guidance

UnitedHealth Group previewed its new reality Tuesday morning with flat quarterly revenues, a 41% drop in 2025 earnings, and soft guidance amid a massive restructuring within the country’s largest private health insurer.

The fourth-quarter and full-year earnings report was accompanied by unwelcome Medicare Advantage news from the federal government. Reimbursement rates for MA plans, for which the federal government pays private insurers to cover the costs of Medicare members, will be relatively flat in 2027, the Trump administration announced.

It is just the latest setback for UHG, which saw former CEO Andrew Witty depart abruptly in May, to be replace by longtime former CEO Stephen Hemsley.

UHG reported full-year earnings of $19 billion, a 41% decline from 2024. The insurer posted soft guidance for 2026: revenues to exceed $439 billion, a 2% year-over-year decline reflecting “right-sizing across the enterprise,” UHG said in a release. That figure is well below analysts’ expectations of $454.6 billion in sales for the year.

“2025 was a year of challenges on multiple fronts,” said Wayne DeVeydt, chief financial officer for UHG, during a Tuesday morning call with Wall Street analysts.

The insurer recorded $113.2 billion in fourth-quarter revenue, flat over the third quarter and up 12% from the prior-year quarter.

UHG is retooling operations in many different areas, executives explained during the call. Divestitures in its operations in the U.K., an overall U.S. membership decline of more than 3 million in 2026, and Medicare funding reductions and changes from the Inflation Reduction Act all impacted 2025-26 earnings.

UHG’s 2025 troubles included a Justice Department investigation of its Medicare billing tactics. A report two weeks ago from Sen. Chuck Grassley, R-Iowa, claims that UnitedHealth leverages its scale, data assets, and vertically integrated provider network to maximize Medicare Advantage risk adjustment payments. It is based on more than 50,000 pages of internal UHG documents.

In December 2024, UnitedHealthcare CEO Brian Thompson was shot dead in a targeted killing as he attended an investor conference in New York City. The suspect, Luigi Mangione, is slated to go on trial later this year.

In his nine months back at the helm, Hemsley authorized independent reviews of operations while instilling discipline and bottom-line business tactics to steer UHG back to positive growth. Investors remain leery, with UHG shares down 15% in 2026 and about 48% year-over-year.

“The momentum inside this organization is palpable,” Hemsley said. “We still have work to do to continue to successfully build and progress over the next several months, and we are eager to get to it. But I am very pleased with the performance and outlook that we have.”

In Other News

MA reimbursement. The Centers for Medicare & Medicaid Services released a proposal Monday night to raise MA payment rates by 0.09% in 2027. That proposal falls well below analysts’ expectations of a 4-6% increase, according to the Wall Street Journal.

Last year, the CMS announced a 5.06% increase that will go into effect this year, beating forecasts. The latest miniscule increase comes on the heels of President Donald Trump’s public criticism of insurance companies. The president wants insurers to “make less, a lot less” and added that they are “making so much money.”

UHG expects to lobby federal officials in the coming weeks to revise the calculation “to avoid a profoundly negative impact on seniors’ benefits and access to care,” said Tim Noel, the chief executive at UnitedHealthcare, the company’s health insurance division.

“The CMS Advance Notice published yesterday simply doesn’t reflect the reality of medical utilization and cost trends,” Noel said. “We will continue to work with CMS to ensure an appropriate final growth rate calculation to avoid a profoundly negative impact on seniors benefits and access to care that would be a deeply unfortunate result for a program that already is under funding pressure from the previous administration.”

Quarterly Snapshot

• UnitedHealthcare served 49.8 million consumers in 2025 and grew revenues 16% to $344.9 billion.
• Optum expanded revenues 7% to $270.6 billion and supported more than 123 million consumers across its businesses.
• The medical care ratio of 89.1% included a 20-basis-point negative impact from loss contracts included in the charge, resulting in an adjusted medical care ratio of 88.9%, an increase of 340 basis points year-over-year.
• Optum Rx’s full-year 2025 revenues of $154.7 billion increased 16% year-over-year, driven by growth in pharmacy services and volume from new and existing clients.
• The UnitedHealthcare Employer & Individual segment saw an 80,000 decline in the number of people, with growth in employer self-funded offerings more than offset by attrition in both group fully-insured and individual products.

Management Perspective

“We very much feel that we can operate within our long-term growth rate margin, that 13 to 16%, when you take a look at the needs in the marketplace and the opportunity for this total enterprise to operate at its full potential.”

CEO Stephen Hemsley

By The Numbers

• Total Revenue: $113.2 billion ($100.8 billion in Q4 2024)
• Net Earnings: $218 million ($5.8 billion in Q4 2024)
• Earnings Per Share: Adjusted earnings per share of $2.11 ($6.81 in Q4 2024)
• Share Repurchases: $5.5 billion for the full year
• Dividend Declared: $2.21 per share
• Stock Price Movement: Shares down 19% to $258.09 at midday Tuesday

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