UnitedHealth's Medical Membership Rises: Can It Maintain the Momentum?

UnitedHealth Group Inc UNH is witnessing robust growth in its medical membership, reflecting a strong demand for both commercial and government-supported health plans. In 2023, the company served 47.2 million people in the United States, which increased 5% year over year in 2024, followed by 2% growth in the first quarter of 2025 to 50.1 million. As of March 31, 2025, UnitedHealthcare served around 780,000 consumers.

One of the major driving factors of this growth is UnitedHealth’s vertically integrated strategy. This strategy brings together its insurance unit, UnitedHealthcare, with its care delivery and pharmacy services through the Optum unit. By providing coordinated, value-based care, the company has been able to attract both seniors and those enrolled in employer-sponsored plans.

However, UNH had to suspend its full-year guidance due to unexpectedly high medical costs in the Medicare Advantage segment in the first quarter of 2025. The return of its new CEO, Steve Hemsley, indicates a strong focus on operations, improved pricing, adjusted risk and improved care coordination.

Membership numbers are on the rise, but to keep that sustainable, it will require careful planning and tighter control over costs. With the 2026 Centers for Medicare & Medicaid Services (CMS) rate increase on the way and a changing competitive environment, the company has to find a way to balance between growing and staying profitable.

How are Competitors Faring?

Some of UNH’s major competitors in the healthcare plan provider space are Humana Inc. HUM and Elevance Health, Inc. ELV.

Humana’s total medical membership of the insurance segment declined 8.3% year over year in the first quarter of 2025 to 14.8 million. Humana anticipates Individual Medicare Advantage membership to witness a decline of around 550,000 in 2025. Its rising costs are concerning.

Elevance Health’s total medical membership witnessed a decline of 0.5% year over year in the first quarter of 2025 to 45.8 million. Elevance Health forecast medical enrollment between 45.8 and 46.7 million in 2025. Its rising costs are concerning.

UnitedHealth’s Price Performance, Valuation & Estimates

Shares of UNH have declined 39.3% in the year-to-date period compared with the industry’s fall of 29.2%.

From a valuation standpoint, UnitedHealth trades at a forward price-to-earnings ratio of 12.58, above the industry average of 11.58. UNH carries a Value Score of B.

The Zacks Consensus Estimate for UnitedHealth’s 2025 earnings implies an 18.7% drop from the year-ago period's actual.

The stock currently carries a Zacks Rank #5 (Strong Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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