UnitedHealth Heads Into Q4 Earnings As Elevated Medical Costs Loom - Is Stability In Sight?

With health insurer UnitedHealth Group Inc. (NYSE:UNH) set to report its fourth-quarter results on Tuesday, investors remain focused on elevated medical costs, which weighed on the company’s margins and profitability throughout the past year.

Are Medical Costs Set To Normalize?

During the company’s third-quarter results three months ago, UnitedHealth acknowledged that cost pressures remained elevated across the industry and expected it to remain this way for the rest of this year.

The company’s consolidated medical care ratio, which is essentially the percentage of premium revenue used for medical care, stood at 89.9%, up significantly from 85.2% during the same period the prior year, reflecting increased utilization across physician, outpatient, and inpatient services.

While UnitedHealth's own projections place medical cost trends “in excess of 11%,” PwC has forecast a lower 8.5% trend in its report, while still noting that current cost growth remains at levels last seen roughly 15 years ago.

UnitedHealth’s Repricing Push For 2026

While fourth-quarter results will still reflect much of the same cost pressure seen earlier in the year, investors are increasingly focused on how UnitedHealth’s pricing actions position the company for 2026.

“…we've repriced the vast majority of our UHC risk businesses, including Medicare Advantage and, to varying degrees, our commercial fully insured and residual ACA offerings,” CEO Tim Noel had said earlier.

These actions were aimed at supporting margin improvement in 2026.

Stock Dips Ahead of Q4 Results

Shares of UnitedHealth fell 1.30% on Monday to close at $351.64 and slid another 8.35% overnight after the Trump administration proposed only 0.09% rate increase for private insurers' Medicare Advantage plans in 2027.

This falls far short of the Centers for Medicare and Medicaid Services’ own projections of 5.8% average annual healthcare cost inflation through 2033, resulting in additional pressure on the margins of insurers in the Medicare Advantage market, which UnitedHealth currently dominates.

The stock scores poorly on Momentum and Value in Benzinga’s Edge Stock Rankings, and has an unfavorable price trend in the short, medium, and long terms.

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