• Adjusted Earnings Per Share Outlook: Revised to $26 to $26.50 for the year.
• Consolidated Revenue Outlook: Affirmed at $450 billion to $455 billion.
• Medical Care Ratio: Expected to be 87.5% plus or minus 50 basis points.
• Optum Health Revenue Outlook: $106 billion to $107 billion.
• Optum Health Operating Earnings: $6.2 billion to $6.4 billion.
• UnitedHealthcare Operating Earnings Outlook: $16 billion to $16.5 billion.
• Medicare Advantage Membership Growth: On pace to serve an additional 800,000 people this year.
• Optum Health Value-Based Care Patients: On track to add 650,000 net new patients.
• Optum Rx Revenue Growth: 14% increase, exceeding $35 billion for the quarter.
• Optum Rx Script Growth: 3% increase due to customer retention and new wins.

• Warning! GuruFocus has detected 6 Warning Sign with UNH.

Release Date: April 17, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• UnitedHealth Group Inc (NYSE:UNH) is experiencing strong growth across its businesses, with plans to serve an additional 800,000 people in Medicare Advantage this year.
• Optum Health is on track to add 650,000 net new patients to value-based care arrangements, indicating robust expansion in this segment.
• Optum Rx is experiencing a strong selling season with new wins and high retention of long-term customers, highlighting its role in reducing drug prices for consumers.
• The company has introduced several initiatives to improve consumer experience, including AI-driven call routing and the removal of prior authorizations on certain drugs.
• UnitedHealth Group Inc (NYSE:UNH) is seeing increased digital engagement among senior members, leading to higher wellness visits and better health management.

Negative Points

• UnitedHealth Group Inc (NYSE:UNH) revised its adjusted earnings per share outlook for the year to $26 to $26.50, reflecting performance challenges.
• The company is facing increased care activity in its Medicare Advantage business, with utilization trends doubling compared to expectations.
• Unanticipated changes in Optum Medicare membership profiles are impacting 2025 revenue, with reimbursement levels below expectations.
• The transition to the new CMS risk model is proving more complex than anticipated, affecting operational execution.
• UnitedHealth Group Inc (NYSE:UNH) is dealing with the effects of Medicare funding cuts, which have led to higher premiums and altered member behavior.

Q & A Highlights

Q: Can you share the Medicare Advantage cost trend estimate for 2025 and how it compares to 2024? A: Andrew Witty, CEO, explained that the company anticipated care levels consistent with 2024. However, they observed a twofold increase in care activity in Q1 2025, particularly in physician and outpatient services. Timothy John Noel, CEO of UnitedHealthcare Medicare & Retirement, added that they expect this trend to persist throughout 2025 and into 2026, shaping their pricing assumptions.

Q: How does the higher incidence of primary care visits relate to Optum Health's performance, and why is value-based care still a strategic focus? A: Andrew Witty, CEO, noted that Optum Health and UnitedHealthcare operate different models. Amar Desai, CEO of Optum Health, highlighted that new value-based patients were less engaged by prior plans, impacting performance. Heather Bresch, an unidentified company representative, emphasized that value-based care offsets trends by engaging patients early, reducing emergency visits, and improving outcomes, supporting long-term growth.

Q: What are the key elements to return to UnitedHealth's long-term growth rate? A: Andrew Witty, CEO, expressed confidence in returning to the long-term growth rate, citing improved 2026 rates and the end of the transition period of absorbing pricing pressure. He emphasized addressing second-order effects seen in 2025 and fixing issues to deliver stronger performance in 2026.

Q: What is UnitedHealth's stance on PBM reform and Medicaid funding cuts? A: Patrick Conway, CEO of Optum Health, highlighted UnitedHealth's transparency and affordability initiatives, including commercial rebate pass-through and cost-based reimbursement for pharmacies. Krista Nelson, CEO of UnitedHealthcare Community & State, emphasized their broad footprint and confidence in supporting states through changes, focusing on member health and coverage access.

Q: How is UnitedHealth addressing the impact of tariffs on pharmaceuticals? A: Andrew Witty, CEO, stated that while the situation is dynamic, UnitedHealth feels well-positioned due to price protection mechanisms in contracts and legislation limiting manufacturers' ability to pass price increases. They are monitoring developments and will adjust bids thoughtfully.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.