UnitedHealth 2025 profit falls after Medicare funding cuts

Core Insights - UnitedHealth Group reported a 16% decline in net earnings for 2025, falling to $12.1 billion from $14.4 billion in 2024, primarily due to Medicare funding reductions and costs associated with the Change Healthcare cyberattack [1] - The adjusted medical care ratio increased to 88.9% in 2025, up from 85.5% in the previous year, indicating rising medical costs [2] - Total revenue for 2025 rose by 12% to $447.5 billion, compared to $400.2 billion in 2024, reflecting growth across various segments [2] Revenue Segments - The UnitedHealthcare Medicare & Retirement segment saw revenues increase by 23% to $171.3 billion, attributed to a rise in the number of individuals served and the Inflation Reduction Act Part D provisions [3] - The Community & State division experienced a 17% year-on-year revenue growth, reaching $94.4 billion, driven by increased services for individuals with complex needs and higher Medicaid rates [3] - The UnitedHealthcare Employer & Individual segment reported a slight revenue increase to $79.2 billion from $78.2 billion in the previous year [2] Quarterly Performance - In Q4, net earnings attributable to shareholders dropped to $10 million from $5.5 billion a year earlier, while quarterly revenues increased to $113.2 billion from $100.8 billion [4] - Guidance for 2026 projects revenues to be above $439 billion, reflecting a 2% decrease due to planned right-sizing across the enterprise, with anticipated earnings from operations exceeding $24 billion and a net margin forecasted near 3.6% [4] Management Commentary - CEO Stephen Hemsley stated that the company faced challenges directly and emerged stronger, positioning itself to better serve its clients and improve core performance [5] - A recent investigation by the US Senate Judiciary Committee alleged that UnitedHealth Group used assertive tactics to secure higher payments for Medicare Advantage members [5][6]