Tear Sheet: UnitedHealth Group Inc.

Earnings in 2024 were generally challenged by industry trends, particularly within its government segments, MA, and Medicaid. The MA funding environment and elevated utilization and higher acuity relative to inadequate rates in Medicaid drove much of the pressure, resulting in a medical loss ratio of 85.5%. Additionally, an acceleration in specialty drug usage and provider upcoding also drove the elevated spend. Company-specific challenges related to the Change Healthcare cyber attack and losses from the sale (including held-for-sale assets) of South American operations were other earnings headwinds in 2024. Overall, UNH's adjusted EBIT return on revenue decreased to 8.0% in 2024, relative to 8.7% in 2023. Momentum for PBM reform legislation is of key concern for UNH, particularly following Federal Trade

...What's new: UnitedHealth Group (UNH) achieved strong revenue growth of 8% in 2024 with total revenue reaching $400 billion. This included 6% revenue growth from UnitedHealthcare (UHC) and 12% from Optum. UHC's rising revenue was driven by strong membership growth, particularly within the commercial segment, while Medicare Advantage (MA) growth trended below the industry. Optum's strong performance was supported by Optum Health's ongoing commitment to convert MA members to value-based care arrangements, which reached 4.7 million patients at year-end 2024. Earnings in 2024 were generally challenged by industry trends, particularly within its government segments, MA, and Medicaid. The MA funding environment and elevated utilization and higher acuity relative to inadequate rates in Medicaid drove much of the pressure, resulting in a medical loss ratio of 85.5%. Additionally, an acceleration in specialty drug usage and provider upcoding also drove the elevated spend. Company-specific challenges...

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