UnitedHealth extends slump as 2026 guidance underwhelms
The company is the first of its health insurance peers to report earnings this year.
Already under pressure from the Trump administration’s proposal to keep Medicare rates flat for next year, UnitedHealth plunged further on Tuesday after issuing an underwhelming forecast.
UnitedHealth’s earnings results for the last quarter of 2025 were in line with Wall Street’s expectations. But the company’s outlook appears to be giving investors, who were reeling after reports of the proposal, even more pause. The stock was down 19% in midday trading.
For the last three months of 2025, UnitedHealth reported:
$2.11 adjusted earnings per share, compared to the $2.10 analysts polled by FactSet were expecting.
$113.2 billion in revenue, compared to the $113.7 billion the Street was penciling in.
A medical cost ratio of 92.4%, a bit higher than the 92.1% forecast by analysts.
UnitedHealth said it expects to report 2026 revenue greater than $439 billion. Revenue at that mark would be a 2% decline year over year, and significantly less than the $454.2 billion analysts had expected. It also expects to bring in annual adjusted earnings per share over $17.75, compared to the $17.74 analysts are currently penciling in.
The expected revenue drop is a result of “right-sizing” at the company: it expects its membership rates to decline (including by about 1.4 million for Medicare Advantage plans) and will shrink its care delivery unit, Optum Health.
The company is the first of the big health insurers to report earnings this year. On Monday, reports surfaced that the Trump administration would seek roughly no change in rates for Medicare insurers, sending UnitedHealth and its peers lower. The government, which pays insurers more for sicker patients, also plans to crack down on inaccurate overbilling by changing how its “risk score” is calculated.
Tim Noel, CEO of UnitedHealthcare, the conglomerate’s insurance arm, suggested that the company would lobby the federal government “to ensure an appropriate final growth rate calculation to avoid a profoundly negative impact on seniors’ benefits and access to care.”
He said the company is focused on improving Medicare Advantage margins in 2026. “The advance notice published yesterday simply doesn’t reflect the reality of medical utilization and cost trends,” Noel told analysts Tuesday morning.
The past year has been a tumultuous one for the broader health insurance industry, which has been roiled by higher healthcare costs. UnitedHealthcare saw its medical cost ratio rise to 89.1% in 2025 from 85.5% in 2024, representing billions of dollars in added costs.
At the same time, the enhanced tax credits for Affordable Care Act plans expired at the end of last year, pushing millions of people on government-subsidized plans to forgo coverage.
Experts expect healthcare premiums to skyrocket this year. Ending the subsidies inflates premiums in part because healthier people are most likely to drop from expensive plans, leaving a smaller pool of sicker people.
UnitedHealth CEO Stephen Hemsley said the company plans to give profits from its ACA plans back to customers in 2026. The company is less exposed to ACA plans than other competitors, such as Oscar Health, Molina Healthcare, and Centene Corporation, which were not represented at the hearing.
Beyond sector-wide headwinds, UnitedHealth is also facing civil and criminal investigations by the Department of Justice, including over its Medicare billing practices.
