UnitedHealth's Profits Fall as Costs of Care Continue to Rise

New York Times

6 days ago

UnitedHealth Group, the giant health care conglomerate, said on Tuesday that it continued to struggle with higher-than-anticipated costs of providing medical care to patients enrolled in its health plans, reporting a drop in earnings for the quarter ended June 30.
While UnitedHealth remained profitable, its operating earnings for the three months fell to $5.2 billion from $7.9 billion in the same period of 2024. Revenues, however, increased to $111.6 billion for the three months of 2025, compared with $98.9 billion for the same period of 2024.
The higher costs were felt across the company's vast health insurance operations, including one of its most successful businesses, selling private Medicare plans as an alternative to traditional Medicare. UnitedHealth owns the nation's largest health insurer, UnitedHealthcare, which covers 50 million people.
Other insurance companies have also reported rising medical costs and disappointing profits. Last Friday, Centene, a for-profit insurance company that focuses mostly on patients who are enrolled in Medicaid and Obamacare plans, was the latest insurer to blame rising expenses for poor financial results.
But UnitedHealth's stumble, which began earlier this year, has shocked many of its investors who have come to rely on steady increases of profits from the conglomerate. Since November, the company's stock has lost roughly half of its value.
The company owns an assortment of health care businesses, including surgery centers, a vast network of medical practices, and a big pharmacy benefit manager as well as health insurance plans. In the new earnings report, UnitedHealth acknowledged that many of the businesses housed under its Optum unit were also underperforming, including its network of physicians and other clinicians who provide care under the privatized portion of the Medicare program, known as Medicare Advantage.
UnitedHealth has experienced a series of misfortunes over the last two years, including the murder of the chief executive of its insurance operations, Brian Thompson. Investors have lost confidence in the company's business model, and patients have grown increasingly frustrated with its methods. In May, it abruptly replaced its chief executive, Andrew Witty, with Stephen Hemsley, who had stepped down from the position in 2017.
Last week, the company confirmed the Department of Justice was investigating its Medicare operations.
UnitedHealth announced its earnings before the stock market opened.
Mr. Hemsley took steps to reassure investors. The company, which had withdrawn its profit outlook for the year, provided investors with an estimate of what it expected to earn for 2025. It estimated revenues of slightly under $450 billion with net earnings of at least $14.65 per share. The company said it expected to return to earnings growth in 2026.
'UnitedHealth Group has embarked on a rigorous path back to being a high-performing company fully serving the health needs of individuals and society broadly,' Mr. Hemsley said in a statement in the company's earnings release. 'As 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.'