UnitedHealth Group stock drop after bad forecast due to higher medical costs from physicians and outpatient services
UnitedHealth Group stock dropped after a poor annual profit forecast released April 17, 2025, citing higher-than-expected medical costs in its privately run Medicare plans.
UnitedHealth Group revised its 2025 performance outlook established in December 2024 to net earnings of $24.65 to $25.15 per share and adjusted earnings of $26 to $26.50 per share. This outlook reflects two factors:
- Heightened care activity indications within UnitedHealthcare’s 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. This activity was most notable within physician and outpatient services.
- Unanticipated changes in the profile of Optum Health members impacting planned 2025 reimbursement due to unexpectedly minimal 2024 beneficiary engagement by plans exiting markets. In addition, a greater-than-expected impact to current and new complex patients from the ongoing Medicare funding reductions enacted by the previous administration.
The company believes these factors to be highly addressable over the course of this year as well as it looks ahead to 2026.
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