TLDR
- UnitedHealth beat Q4 earnings expectations with $2.11 per share but missed revenue estimates at $113.2 billion
- The company forecasts 2026 revenue above $439 billion, marking a 2% decline and the first revenue drop in a decade
- UnitedHealth expects to lose more than 3 million members in 2026 as part of its turnaround strategy
- The medical benefit ratio improved to 88.8% projected for 2026, down from 89.1% in 2025
- Medicare Advantage payment rates proposed at nearly flat 0.09% increase sent health insurer stocks down over 12%
UnitedHealth Group delivered mixed fourth-quarter results Tuesday morning. The health insurance giant beat earnings forecasts but fell short on revenue.
#UnitedHealth Group$UNH, Q4-25. Results:
Adj. EPS: $2.11
Revenue: $113.2B
Net Income: $10M
Q4 included a $1.6B charge tied to restructuring, cyberattack costs, and portfolio actions, weighing on reported earnings. pic.twitter.com/qTDVqNHdhU
— EarningsTime (@Earnings_Time) January 27, 2026
The company posted adjusted earnings of $2.11 per share. Wall Street expected $2.10. Revenue came in at $113.2 billion, missing the $113.82 billion estimate.
The bigger story sits in UnitedHealth’s 2026 outlook. The company expects revenue to exceed $439 billion for the year. That represents a 2% decline from 2025.
UnitedHealth Group Incorporated, UNH
It marks the first time in ten years UnitedHealth has projected falling revenue. Analysts had expected $454.6 billion in sales. The guidance came as a surprise to investors who’ve grown accustomed to steady growth.
CFO Wayne DeVeydt pointed to three main factors behind the decline. First, the company completed divestitures in the fourth quarter. More are planned for 2026, including operations in the UK and South America.
Second, UnitedHealth expects to lose more than 3 million members this year. The company described this as “right-sizing across the enterprise.” It’s part of a broader turnaround plan that includes shrinking membership, raising prices, and cutting benefits.
The third factor involves Medicare’s new V28 coding system. This is the final year of transition to the new payment structure. The change will result in a $6 billion revenue hit across the company.
Medical Costs Show Improvement
UnitedHealth’s medical benefit ratio offers some good news. The metric measures medical expenses paid compared to premiums collected. For 2026, the company expects an 88.8% ratio, plus or minus 50 basis points.
That’s better than the 89.1% reported for 2025. A lower ratio means UnitedHealth is keeping more premium dollars after paying claims. It suggests the company’s cost control measures are working.
Medical costs from Medicare Advantage patients have been a problem for two years. Older adults returned to hospitals for procedures delayed during the pandemic. Hip replacements and joint surgeries drove costs higher.
DeVeydt said fourth-quarter medical costs were “still elevated and high but not growing beyond expectations.” The company is making progress on controlling these expenses.
Medicare Advantage Rates Disappoint Investors
Monday brought bad news for health insurers. The Centers for Medicare and Medicaid Services proposed a 0.09% payment rate increase for Medicare Advantage plans in 2027. Wall Street expected much more.
The proposed rates sent UnitedHealth shares down over 12% before Tuesday’s opening bell. Other insurers like Humana and CVS Health also dropped sharply.
Medicare Advantage covers more than half of all Medicare beneficiaries. The government payment rate determines how much insurers can charge for premiums and what benefits they can offer. Low rates squeeze profits.
UnitedHealth has already pulled back on Medicare Advantage offerings. The company is focusing on profitability over growth. It’s raising prices in some markets and exiting others entirely.
The government typically finalizes Medicare Advantage rates in early April. If the current proposal stands, it would add more than $700 million in payments to plans in 2027. That’s far less than insurers hoped for.
CEO Stephen Hemsley returned in May to lead the turnaround. The company has faced multiple challenges over the past two years. These include the murder of a top executive, federal probes, and public anger over insurance practices.
DeVeydt said the company “righted the ship” in the fourth quarter. UnitedHealth is divesting international operations and focusing on domestic business. The company has strengthened its balance sheet and repositioned for future growth.
UnitedHealth forecasts 2026 adjusted profit per share above $17.75. Analysts expected $17.74 according to LSEG data. The company’s cost control measures appear to be delivering results despite revenue pressures.
The post UnitedHealth (UNH) Stock Tumbles as Insurer Reports First Revenue Decline in Decade appeared first on Blockonomi.
This articles is written by : Nermeen Nabil Khear Abdelmalak
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