Here is what you’ll find in this week’s newsletter!

1. Important links 🔗 - the best articles we found this week about the Medicare Market along with links to Jared’s recent LinkedIn posts.

2. Deep Dive 📚 - UnitedHealth Group Q3 ’25: Continued Margin Pressure

3. Sponsor Snapshot 🚀 - brought to you by Medicare Market Insights +

It’s only a 5 minute read, but it will make you 10x smarter.

DEEP DIVE 📚

UnitedHealth Group Q3 ’25: Continued Margin Pressure

UnitedHealth Group’s Q3 2025 results paint a picture of both pressure and transition.

After years of steady growth, the company saw meaningful profit compression across nearly all business segments, driven by elevated Medicare medical costs and margin pressure. Yet, leadership’s tone on the earnings call was notably optimistic: 2026 will be a “margin recovery year,” followed by a stronger rebound in 2027.

In this week’s Deep Dive, we look at membership, revenue, and profitability trends across UnitedHealthcare and Optum, and what they tell us about where UnitedHealth is heading next.

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Membership Trends

Membership growth has been lead by Medicare Advantage enrollment growth.

After a slowdown last year, MA enrollment surged, driven primarily by C-SNP growth (see below), which began during AEP and has continued throughout 2025.

In contrast:

• Medicare Supplement membership declined, continuing its long-term erosion.

• Medicaid enrollment ticked upward modestly after the post-redetermination declines.

• Commercial growth slowed compared to 2024.

Looking at historical results is helpful, but it’s also important to hear what executives for UNH said in their earnings release to gain insight into future expectations.

Investor Call Insights on Membership

Medicare Advantage (MA)

• Expect ~1 million MA member contraction in 2026 (individual + group).

• About 600k of that is from product exits already announced; the remaining ~400k is split roughly evenly between (a) group MA pressure from disciplined pricing/competitor actions and (b) individual MA dislocation.

• This would equate to a ~10% decrease in MA membership

ACA (individual exchanges)

• Filed >25% average rate increases and targeted service-area reductions; expect ACA enrollment down by roughly two-thirds.

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Revenue Trends

UNH reports revenue in two major verticals: UnitedHealthcare (insurance) and Optum (services), with eliminations between the two.

• UHC Q3 2025:

  • +24% YoY in Medicare & Retirement segment

  • +18% YoY in Community & State segment

• Optum Q3 2025:

  • +16% YoY in Optum Rx

  • Optum Health (-0.1%) and Optum Insights (-0.3%) both flat

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Operating Income Trends

For the first time in seven years, operating income declined across all major segments (except Optum Rx).

Investor Call Insights on Operating Income

• Leadership emphasized 2026 as a “margin recovery year” and 2027 as a return to stronger profitability:

• CFO Wayne DeWitt added:

• 2026: modest recovery — UHC margins improving toward targets; Optum Health and Insight stabilizing.

• 2027: full rebound expected, with margins returning to historical ranges.

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Medical Loss Ratio Trends

The Medical Loss Ratio has been a major topic point in the Medicare industry over the past two years with most companies reporting higher utilization in Medicare products resulting in higher loss ratios.

[Note: elevated loss ratios in other product lines are also contributing]

You can see in the chart below that the Q3 2025 loss ratio of 89.9% is the highest it’s been in recent history.

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Profit Margins

The loss ratio chart above, along with the profit margin chart below goes along way in telling the story of United’s recent struggles, and also tells us why there has been significant disruption in this year’s AEP.

The 3.8% profit margin is far below the typical 7-9%.

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Bottom Line

UnitedHealth’s Q3 results underscore how challenging 2025 has been for the Medicare industry.

• Membership growth remains strong in MA—especially C-SNPs—but management expects a 10% contraction in 2026 as unprofitable blocks and group plans are pruned.

• Revenue growth is still solid, led by Optum Rx (+16%) and UHC Medicare & Retirement (+24%), but overall profitability has eroded.

• Operating income fell sharply, and profit margins hit multi-year lows.

• Leadership’s message: 2026 will focus on margin restoration, with a return to double-digit earnings growth by 2027.

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