UnitedHealth raises 2025 profit forecast, expects 2026 pressure on Medicaid business

Core Insights - UnitedHealth Group raised its annual profit forecast and aims for growth in 2026 and beyond, indicating positive momentum under new CEO Stephen Hemsley [1][3] - The company plans to provide a detailed 2026 forecast in January, with expectations for durable and accelerating growth [1] - Despite optimism, UnitedHealth shares remained flat on the announcement day [1] Financial Performance - UnitedHealth now projects 2025 adjusted profit of at least $16.25 per share, an increase from the previous forecast of $16.00, surpassing analysts' expectations of $16.20 [5] - Analysts anticipate a 2026 profit of $17.59 per share [6] Operational Challenges - Recovery in the Medicaid business is expected to be challenging due to a mismatch between payment rates and medical service costs, likely extending into the next year [2] - Behavioral health, specialty drugs, and home-health services have contributed to higher costs in Medicaid plans during the third quarter [4] Management Strategy - CEO Hemsley is focused on regaining investor and consumer trust following a difficult period for the company, which included various challenges [3] - The new Chief Financial Officer Wayne Devedyt indicated plans to reduce clinical service locations through Optum Health to improve profitability [6] - Shifting to plans with a narrower network of doctors is expected to help recover profit margins for the Optum Health unit [7]