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UnitedHealth Group profits fell to $3.4 billion in the second quarter as the giant provider of … More health benefits and services grapples with rising costs of providing health insurance to millions of Americans, the company said July 29, 2025. In this photo, UnitedHealth Group Inc. signage stands in front of company headquarters in Minnetonka, Minnesota, U.S., on Wednesday, March 9, 2016. Photographer: Mike Bradley\/Bloomberg<\/p>\n
\u00a9 2016 Bloomberg Finance LP<\/p>\n
UnitedHealth Group profits fell to $3.4 billion in the second quarter as the giant provider of health benefits and services grapples with rising costs of providing health insurance to millions of Americans.<\/p>\n
But the company, which brought back Stephen Hemsle<\/a>y to be chief executive officer earlier this year, says the \u201ccompany expects to return to earnings growth in 2026.\u201d<\/p>\n In May, UnitedHealth Group suspended<\/a> its financial outlook for the rest of the year and replaced its top executive, Andrew Witty, as the parent of the giant health insurance company UnitedHealthcare grapples with rising healthcare costs in its Medicare Advantage business.<\/p>\n Medicare Advantage plans contract with the federal government to provide health benefits to seniors. Across the health insurance industry, executives have said seniors have a pent up demand for care and treatments and are returning for surgeries and procedures delayed during the Covid-19 pandemic.<\/p>\n On Tuesday, UnitedHealth updated its 2025 outlook<\/a>, which includes revenues of $445.5 billion to $448 billion, net earnings of at least $14.65 per share and adjusted earnings of at least $16 per share. The new outlook, which fell below what some analysts were forecasting, \u201creflects first half 2025 performance and expectations for the remainder of the year, including higher realized and anticipated care trends,\u201d the company said.<\/p>\n \u201cUnitedHealth Group has embarked on a rigorous path back to being a high-performing company fully serving the health needs of individuals and society broadly,\u201d Hemsley said in a statement accompanying the earnings report. \u201cAs we strengthen operating disciplines, positioning us for growth in 2026 and beyond, the people at UnitedHealth Group will continue to support the millions of patients, physicians and customers who rely on us, guided by a culture of service and longstanding values.\u201d<\/p>\n UnitedHealth, which has more than 50 million health plan subscribers under its UnitedHealthcare health insurance business, is seeing rising costs among health plan members in all three government-subsidized benefits it helps manage: Medicaid, Medicare Advantage and individual coverage under the Affordable Care Act, also known as Obamacare.<\/p>\n \u201cWhile we face challenges across our lines of business, we believe we can resolve these issues and recapture our earnings growth potential while ensuring people have access to high-quality, affordable health care,\u201d UnitedHealthcare chief executive officer Tim Noel said in a statement accompanying UnitedHealth\u2019s earnings report.<\/p>\n In the company\u2019s second quarter, UnitedHealthcare\u2019s \u201cconsolidated medical care ratio of 89.4% increased 430 basis points year-over-year.\u201d That compares to 85.1% in the year earlier period and well below the ratio in the lower 80th percentile where health insurers like to be.<\/p>\n The increase in the medical cost ratio, which is the percentage of premium that goes toward medical costs, \u201cwas primarily due to medical cost trends which significantly exceeded pricing trends, including both unit costs and the intensity of services delivered, and the ongoing effects of Medicare funding reductions,\u201d the company said.<\/p>\n UnitedHealth\u2019s cost struggles are among the parade of health insurance<\/a> companies that have struggled in the last two years to control costs of subscribers in plans subsidized by the government.<\/p>\n Just last week, Centene reported a rare quarterly loss as the provider of government-subsidized benefits struggles to manage costs of its health plan members. And earlier this month, Elevance Health<\/a>, which sells Blue Cross and Blue Shield plans in 14 states, lowered its profit forecast for the rest of 2025 due to rising costs in its Medicaid plans and individual policies it sells under the ACA.<\/p>\n