Updated: UnitedHealth Group’s First Quarter Revenue Increases, But Company Revises Outlook

UnitedHealth Group’s first quarter 2025 revenue has grown compared with the first quarter of 2024, but the company has adjusted its performance outlook for 2025 to net earnings of $24.65 to $25.15 per share.

Company leaders said in a press release that healthcare expenses, especially physician and outpatient services, within the Medicare Advantage businesses were above what they had expected. Additionally, within Optum Health, plans exited markets, and the company experienced greater-than-expected impact from current and new complex patients from the ongoing Medicare funding reduction.

Andrew Witty

“UnitedHealth Group grew to serve more people more comprehensively but did not perform up to our expectations, and we are aggressively addressing those challenges to position us well for the years ahead, and return to our long-term earnings growth rate target of 13 to 16%,” Andrew Witty, CEO of UnitedHealth Group, said in a news release

UnitedHealth Group’s first quarter 2025 revenue grew $9.8 billion year-over-year to $109.6 billion. The first quarter medical care ratio was up slightly, 84.8% compared with 84.3% in 2024. The increase, a company executive said, was related to both the ongoing Medicare funding reductions and member mix and the higher senior care activity, partially offset by the Medicare Part D program changes.

Within UnitedHealthcare, first-quarter revenues of $84.6 billion grew by $9.3 billion year-over-year. Operating earnings were $5.2 billion, impacted by higher-than-expected care activity levels within UnitedHealthcare’s Medicare Advantage business. UnitedHealthcare provides healthcare benefits, serving individuals and employers, and Medicare and Medicaid beneficiaries.

With Optum Health, first-quarter revenue of $63.9 billion increased $2.8 billion, led by Optum Rx, which provides pharmacy benefit services. Optum Rx revenues were $35.1 billion. Adjusted scripts grew to 408 million, compared with 395 million last year.

The number of people served by the company’s offerings for seniors and people with complex needs grew by 545,000 in the first quarter and remains expected to grow up to 800,000 in 2025. Within the commercial health insurance sector, the number of consumers served with self-funded commercial benefits increased by about 700,000 in the first quarter.

In an investor call, Witty explained that unanticipated changes in the Optum Medicare membership impacted 2025 revenue. But UnitedHealthcare and Optum Health are distinct businesses with different models, markets, and products.

Within Optum Health, “the Medicare business is multi-payer and not limited to just UnitedHealthcare members, he said. “Given these differences, changes in care activity and member profile do not always follow the same patterns and can result in different impacts on each business. The respective teams are urgently responding to our performance challenges, starting with care activity in UnitedHealthcare's Medicare Advantage business.”

Within Optum Health, Witty said the company added new Medicare patients, and a portion of these were previously covered by plans that had exited markets. Because of a lack of “engagement” last year with these patients, 2025 reimbursement levels increased that were not reflected by CMS risk models.

“To be sure, it is complicated, but we’re not executing on the model transition as well as we should,” Witty said. “We must and will work to better anticipate and address these factors here still early in 2025. We believe they are highly addressable as we look ahead to 2026.”

John Rex, president and chief financial officer of UnitedHealth Group, said during the investor call that the company expects the full-year medical care ratio to be 87.5% plus or minus 50 basis points, reflecting higher utilization across senior populations. “At the patient mix and revenue profile of Optum Health within this range, we expect the first half of the year to be below the midpoint and the second half to be above.”

Rex said that across the senior populations throughout the company’s offerings, there was earlier and higher wellness visit activity, which drives specialty and outpatient utilization.

“We had a much higher level of wellness business in the quarter,” Rex said during the question-and-answer period. “Those are the factors that are super effective and not costly. But they do drive specialty care.”

This story was updated to include information from UnitedHealth Group's earnings call with investors.