Most health insurers beat estimates in Q3, but investors have mixed feelings

The largest health insurers in the country all reported adjusted earnings per share that beat Wall Street estimates this earnings season, but you wouldn’t know it by looking at their stock prices.

Investors remain weary as insurers like UnitedHealth, Cigna, CVS, Elevance Health, and Centenecontinue to grapple with high costs of medical care, particularly for government-sponsored plans. Each, to varying extents, said costs will likely continue to rise and weigh on margins before they come down.

With the exception of Centene, every major health insurer is down since reporting its most recent quarter of earnings. (Humuna and Oscar Health report next week.)

“Medical cost trends remain historically high, but consistent with our second-quarter guidance, and we expect that to continue throughout the remainder of 2025,” UnitedHealth CEO Tim Noel told analysts on Tuesday.

Medical costs outpaced premiums as members are getting more procedures and taking more expensive drugs.

For government-sponsored plans like Medicaid and Medicare, reimbursement hasn’t kept up with those rising medical costs. Insurers who specialize in providing those plans, like Molina Healthcare, are particularly hard-hit.

On a call with analysts last week, Molina CEO Joe Zubretsky described it as “inclement weather rather than climate change,” saying he expects margins to stabilize in 2026 and recover in the coming years.

Cigna was particularly hard-hit as well, though its costs are actually significantly lower than its competitors.

The company told investors that the new model for its pharmacy benefit manager, Express Scripts, will shrink its margins. The company plans to drop rebates by 2027, meaning patients will automatically get a discounted price on drugs instead of drugmaker rebates flowing back later through the PBM.

“For 2026, we do expect margin compression within our pharmacy benefit services business,” Cigna CEO Brian Evanko told analysts on Thursday.