UnitedHealth: Medicare Issues Fueled ‘Unusual and Unacceptable’ Earnings

UnitedHealth Group is downgrading its 2025 revenue forecast because of issues with its Medicare business.

Speaking during a conference call Thursday (April 17) discussing first-quarter earnings , CEO Andrew Witty said the company began the year in two different ways. The first way was to provide more healthcare benefits and services to more members and patients.

“The other way, however, was an overall performance that was frankly unusual and unacceptable,” Witty said on the call.

The company said in a Thursday press release that its new outlook is net earnings of $24.65 to $25.15 per share and adjusted earnings of $26 to $26.50 per share.

It’s driven in part by “heightened care activity indications within [its] Medicare Advantage businesses, which became visible as the quarter closed, far above the planned 2025 increase, which was consistent with the elevated levels in 2024,” the release said. “This activity was most notable within physician and outpatient services.”

In addition, Witty told investors that the company added more new Medicare patients to its Optum Health program, some of whom were covered by plans that were exiting markets.

“They experienced a surprising lack of engagement last year, which led to 2025 reimbursement levels well below what we would expect and likely not reflective of their actual health status,” Witty said during the call. “Additionally, many of the current and new complex patients we serve are more affected by the CMS risk model changes that we are in the process of implementing. To be sure, it is complicated, but we’re not executing on the model transition as well as we should. We must and will work to better anticipate and address these factors.”

The earnings came one day after a report in which the company said it was trying to improve communications with customers and make its system easier to navigate following the shooting death of former UnitedHealth CEO Brian Thompson. The killing turned accused shooter Luigi Mangione into a sort of folk hero among Americans fed up with the health insurance system in the United States.

Tim Noel, who took over the insurance unit when Thompson died, said per a Bloomberg report that management is “acknowledging that there are challenges, there are problems.”

“We are fixing them,” he added.

Company officials said they are speeding up decisions on requests for care, otherwise known as prior authorizations; reducing the number of medical services subject to those hurdles; and enhancing communications with customers when a request or claim is denied.