UnitedHealth Just Got Hit Hard by Soaring Medical Costs — Again

UnitedHealth’s second-quarter earnings are out, and it’s not pretty. The company missed expectations, cut its 2025 forecast hard, and warned that rising healthcare costs are going to keep eating into profits for a while.

After pulling its original outlook back in May (when things were already looking shaky), UnitedHealth is now aiming for at least $16 per share next year — way down from its original target of up to $30. That’s a steep drop for a company that’s usually a Wall Street darling.

So what’s going on? Simple: healthcare is getting way more expensive, way faster than insurers planned for. Emergency room visits are up, prescription drug prices are spiking (especially for high-end cancer and gene therapies), and mental health care demand keeps rising. Add it all up, and UnitedHealth’s medical costs for the quarter hit a whopping $78.6 billion — up 20% from last year.

Revenue still climbed to $111.6 billion, but profits took a 19% dive to $3.41 billion. Investors were hoping for a stronger showing: analysts were expecting $4.48 per share, but UnitedHealth delivered $4.08.

And remember when the company’s stock hit $630 last November? It’s now down 44% this year, currently trading around $272. That makes it one of the Dow Jones’ biggest drags in 2025.

Leadership shakeups haven’t helped, either. CEO Andrew Witty exited suddenly this spring, and now former chief Stephen Hemsley is back in charge, trying to stabilize things. In June, Hemsley admitted they misread care trends — and promised a more “prudent” plan going forward. This earnings report? That plan in action.

UnitedHealth isn’t alone, by the way. Other big insurers like Centene and Elevance have also lowered forecasts, all hit by the same rising-cost storm.

Bottom line: UnitedHealth says it expects a return to earnings growth in 2026. But 2025? Strap in — it’s going to be a bumpy ride.

With input from The AP News