Each of the six major national insurers turned a profit in the first quarter of 2025, though financial pressures related to government programs—particularly Medicare Advantage (MA)—once again reared their ugly heads.
As it so often does, UnitedHealth Group set the tone for the industry with a rare miss, falling short of Wall Street analysts' predictions on both earnings and revenue. The company's top brass called the performance "unacceptable," attributing the struggles to challenges in MA.
Elevated utilization and reimbursement changes dinged both its health insurance division and its Optum Health segment, one of its key growth engines.
CEO Andrew Witty told investors that the first quarter represented two "disparate" stories: The business continues to grow, while these hurdles are behind uncharacteristic underperformance.
"Clearly, we're a leader in all of this marketplace where we're taking almost certainly a bigger fraction, if you will, of the pressure because of our market leadership position here," Witty said on the earnings call.
That said, despite the challenges, UnitedHealth also led the way on both profit and revenue for the first quarter. The company brought in $109.6 billion in revenue and $6.3 billion in profit in the first quarter, far outstripping its peers.
And, while these figures were both a miss for Wall Street, they represented growth year over year. In the first quarter of 2024, UnitedHealth posted $99.8 billion in revenue and a $1.4 billion loss as its finances were slammed in the wake of the cyberattack on its Change Healthcare division.
The next-highest performer in the first quarter in terms of profitability was Elevance Health, with $2.2 billion. The company was also the second up in terms of releasing its earnings and sought to sooth investors spooked by UnitedHealth Group's rough showing.
However, while it did post a beat for both profit and revenue, Elevance too felt the sting of higher medical costs. Executives at the company said that while costs were elevated, they were "manageable" and in line with its internal expectations.
Elevance Health Chief Financial Officer Mark Kaye noted that the company's MA arm saw costs rise in the early part of the quarter due to the flu and other respiratory illnesses, which evened out later in the first quarter. In its earnings report, the company said its medical loss ratio was 86.4%, which the company attributed more to acuity in its Medicaid plans than in Medicare.
As for revenue, Elevance Health reported $48.9 billion in the first quarter.
While Elevance landed at No. 2 on the list for profitability, CVS Health was the second-highest company in terms of revenue for the first quarter. The healthcare giant reported $94.6 billion in revenue as well as $1.8 billion in profit.
CVS' Aetna unit has faced similar headwinds as other major insurers, with its MLR in the first quarter landing at 87.3%. That does represent improvement year over year, though, when the company reported 90.4% for its MLR.
The main headline for CVS in the first quarter was that Aetna would pull out of the health insurance exchanges for 2026 after its plans failed to really take off. The company made a return to the individual market in 2022 after initially pulling out years earlier when the sector was far less stable.
Challenges at Aetna have been a major downer on CVS overall for the past several quarters, and the company has been focused on finding ways to right the ship at its insurance arm. Pulling back from the individual market falls within that effort, executives said.
Humana is another company making strides toward improving operations for its health plan. It reported $32.1 billion in revenue and $1.2 billion in profit for the first quarter.
Multiple MA-related factors have battered Humana over the past several quarters. It's been hit with the same challenges around elevated utilization, and its overall star ratings performance dropped significantly after the Centers for Medicare & Medicaid Services made changes to the cut points used to determine the scores.
The company expects a full-year MLR between 90.1% and 90.5%, per its report. Executives said during the company's earnings call that they're emphasizing "diversification" in its efforts to improve performance. For example, it's exited several key markets and shed several hundred thousand members to focus on the plans that are performing the best.
It's also looking to avoid concentrating too many members in the same plans, as that was the culprit behind its star ratings drop.
Cigna lands at No. 3 for revenue in the first quarter, bringing in $65.5 billion for the quarter. It also reported $1.3 billion in profit. While the company reported similar trends toward higher-than-anticipated utilization in the first quarter, that was due to the closure date for the sale of its MA plans to Health Care Service Corporation.
Now that it has divested those plans, it will shed that impact in tandem. Cigna also said its stop-loss plans played a role in its MLR performance for the quarter.
Centene similarly has less exposure to MA compared to some of the other major national plans and will be more likely feel the squeeze from potential cuts to Medicaid and the likely expiry of the Affordable Care Act's enhanced premium subsidies.
CEO Sarah London told investors that there is limited appetite on the Hill or in the White House to slash Medicaid, based on conversations the team is having with policymakers. She said there's also pressure from GOP voters to extend the premium subsidies.
Centene reported $46.6 billion in revenue and $1.3 billion in profit for the first quarter.