UnitedHealth Group Inc. signage on the floor of the New York Stock Exchange (NYSE) in New York, United States, on Wednesday, December 31, 2025.
Michael Nagle | Bloomberg | Getty Images
UnitedHealth Group reported slightly higher fourth-quarter profit on Tuesday but issued a subdued revenue forecast, as the parent company of the nation’s largest private insurer struggles to recover amid higher-than-expected medical costs.
Here’s what the company reported for the fourth quarter compared to what Wall Street expected, based on a survey of analysts by LSEG:
- Earnings per share: $2.11 adjusted vs. $2.10 expected
- Income: $113.2 billion versus $113.82 billion expected
The findings come two days after UnitedHealth CEO Stephen Hemsley and other executives from Minnesota’s largest companies banded together to sign an open letter calling for an “immediate de-escalation of tensions” in the state after federal immigration agents fatally shot U.S. citizen Alex Pretti, a 37-year-old intensive care nurse.
The company reported net income of $10 million, or 1 cent per share, in the fourth quarter, compared with $5.54 billion, or $5.98 per share, a year earlier. Excluding items such as business divestitures, restructurings and costs related to a massive cyberattack on its Change Healthcare business unit, UnitedHealth earned $2.11 per share.
Revenue increased from $100.81 billion in the year-ago quarter.
UnitedHealth is banking on a new management team to carry out a recovery plan. The strategy involves reducing membership, raising prices, reducing benefits and increasing transparency to restore profitability – as well as the company’s reputation – after a series of setbacks over the past two years.
UnitedHealth expects its revenue to exceed $439 billion in 2026, a 2% year-over-year decline that reflects “good scaling across the business,” the company said in a statement. That figure is well below the $454.6 billion in sales analysts expected for the year.
“This is the first time in a decade that UnitedHealth Group has experienced a revenue decline,” Chief Financial Officer Wayne DeVeydt said in an interview, referring to sales forecasts.
He pointed to three factors behind the expected decline, including the company’s fourth-quarter divestments and others planned for later this year, such as its operations in the United Kingdom and South America. He also pointed to a “pretty significant” overall decline in U.S. members of more than 3 million in 2026.
“I would say in the fourth quarter we righted the ship in the sense that we took the friction out of, obviously, operations in South America and Europe,” he said. “We are focused on domestic U.S. businesses and we have essentially strengthened the balance sheet and repositioned the company for the historic growth that investors have seen.”
The third factor is that 2026 is the final year of the transition to Medicare’s new coding system — known as V28 — which has reduced payments to insurers by changing how patient diagnoses are weighted, DeVeydt said. That will result in a $6 billion loss in revenue, $2 billion of which will affect the company’s insurer, UnitedHealthcare, with the remainder affecting its Optum healthcare unit, he noted.
On Monday, shares of UnitedHealth and other health insurers plunged after the Centers for Medicare & Medicaid Services proposed near-flat payment rates for insurers of Medicare Advantage, the private insurance program that now covers more than half of all Medicare beneficiaries.
This closely government-monitored payment rate determines how much insurers can charge for monthly premiums and benefits for the plans they offer – and ultimately helps shape their profits.
Medical costs for Medicare Advantage patients have increased over the past two years as more seniors return to the hospital to undergo procedures they had delayed during the pandemic, like joint and hip replacements. In the fourth quarter, those medical costs were “still high and high, but did not increase beyond expectations,” DeVeydt said.
For 2026, UnitedHealth expects its insurance segment’s medical benefits ratio – a measure of total medical costs paid compared to premiums collected – to stand at 88.8%, plus or minus 50 basis points. This would represent an improvement over the 89.1% ratio recorded for 2025. A lower ratio generally indicates that the company collected more in premiums than it paid out in benefits, resulting in higher profitability.