UnitedHealth Group: the year revenue grew 12% and profit fell 41%

FY2025 results as filed in the Form 10-K accepted 2026-03-02 (accession 0000731766-26-000062), against the FY2024 Form 10-K (0000731766-25-000063). All figures $M except per share, ratios and percentages. Negatives in parentheses.

Key figures

What the filings show

• Revenue grew $47,289M to $447,567M while operating income fell $13,323M to $18,964M. Nothing in the top line explains the bottom line: the two moved in opposite directions for the first time in the five year record.
• The cause is the medical care ratio, which rose 360bp to 89.15%. One point of that ratio is $3,522M of operating income at the FY2025 premium base of $352,229M, so 360bp of drift accounts for $12,665M, or 95.1%, of the entire operating income decline.
• Management priced for the wrong year: the FY2025 10-K says "our pricing trends and patient and member health status assumptions were well-short of the medical cost trends incurred", against a FY2024 10-K calling the same care patterns "as expected and contemplated in our benefits design".
• The damage is not evenly spread across the industry. Six listed peers drifted a median 142bp in FY2025; UNH drifted 360bp. On the peer median UNH would have earned roughly $26,638M, so about two fifths of the decline is sector wide and three fifths is company specific.
• Optum Health carries the company specific half. It swung $(8,048)M, from $7,770M of operating income to a $(278)M loss, on patients whose 2024 diagnoses were never captured and whose 2025 risk revenue was therefore set below their real cost. Optum Rx is the only segment that grew operating income, up 23.3% to $7,193M.
• Guidance failed in sequence: an initial FY2025 adjusted EPS range of $29.50 to $30.00 in December 2024, cut in April 2025, withdrawn in May 2025, reset in July 2025 at "at least $16.00", landing at $16.35 adjusted, $13.23 GAAP. The chief executive changed on the 8-K that pulled the outlook.
• The fourth quarter absorbed a $(2,878)M pretax charge, taking Q4 2025 operating income to $380M and GAAP EPS to $0.01. It was booked after the company had reaffirmed only its adjusted EPS floor in January 2026, so adjusted guidance was met by $0.10 while GAAP guidance was missed by $1.67.
• The balance sheet took the strain rather than absorbing it. Debt to EBITDA went from 2.11x to 3.36x, interest coverage from 8.27x to 4.74x, free cash flow from $20,705M to $16,075M, and shareholder returns to 83.7% of free cash flow. Retained earnings fell $433M, the first decline in five years, and all three major agencies carried a Negative outlook at 2025-12-31 against Stable a year earlier.
• Insiders read the low correctly and have not repeated it: $32,119,275 of open market purchases across three sessions in May 2025 at $271.17 to $320.80, and zero open market purchases in the twelve months since, against $954,523 of sales.

Reconciliation checks

1. Segment external customer revenue plus investment and other income equals consolidated revenue. PASS in all three years. FY2025: $443,647M plus $3,920M equals $447,567M. FY2024 and FY2023 also tie. The reconciling item, investment and other income, sits outside segment revenue.
2. Segment operating income sums exactly to consolidated operating income. PASS to $1M in all three years. FY2025: $9,425M plus $(278)M plus $2,624M plus $7,193M equals $18,964M. FY2024 sums to $32,287M and FY2023 to $32,358M.
3. Four quarters of revenue reconcile to the audited full year. PASS for FY2024 and FY2025. The three reported interim quarters tie to the nine month figure in each third quarter 10-Q to the dollar, and the derived fourth quarter is a clean plug against the audited full year with a zero residual: FY2024 $299,471M plus $100,807M equals $400,278M; FY2025 $334,352M plus $113,215M equals $447,567M. No reconciling item is required on the revenue line.

Sources: UnitedHealth Group Forms 10-K for FY2023 (0000731766-24-000081), FY2024 (0000731766-25-000063) and FY2025 (0000731766-26-000062); Forms 10-Q for Q1 to Q3 of FY2024 and FY2025; Forms 8-K Exhibit 99.1 for the quarterly earnings releases. Retrieved via SEC-API.io.

Revenue & Business Model

UnitedHealth Group booked $447,567M of FY2025 revenue across four reportable segments, of which 78.7% was insurance premium and 44% came from a single counterparty, the Centers for Medicare & Medicaid Services (10-K 0000731766-26-000062, Item 1). The company is two businesses stacked on one another: UnitedHealthcare sells risk, Optum sells care, data and drugs — and Optum sells 62% of it back to UnitedHealthcare. Combined gross segment revenue of $621,003M is cut to $447,567M by $173,436M (27.9%) of eliminations.

The revenue model in one table

Reconciliation check: segment external revenue $443,647M plus investment and other income $3,920M equals consolidated $447,567M, and the same tie holds for FY2024 and FY2023; the full check set is in the front matter.

Revenue by type — the mix has not moved in five years

Premium share ended FY2025 exactly where it stood in FY2021 despite $160bn of added revenue, so diversification is not visible in the revenue mix. Medical costs consumed 89.15% of premium in FY2025 against 83.17% in FY2023, so the dominant revenue line also carries the margin damage.

Revenue by geography — not disclosed

UnitedHealth Group discloses no disaggregation of revenue by country or region. The FY2025 10-K states only that "our businesses participate primarily in the United States health markets", and the XBRL instance carries no StatementGeographicalAxis fact against any revenue tag. Three disclosed items are the entire geographic evidence base:

The Brazil disposal completed 6 February 2024 removed roughly two thirds of the Global line in one step and drove the $(8,193)M FY2024 foreign pretax loss. Remaining South American operations are held for sale and served 1,160 thousand people at 31 December 2025. On the only disclosed measure, UNH is a 99.3% domestic revenue generator; any finer geographic split would be fabrication.

Revenue by segment

Of the $48,571M increase in external revenue in FY2025, UnitedHealthcare supplied $46,935M, or 96.6%. The three Optum segments together added $1,636M of external revenue on a $270,620M gross base — Optum's reported growth is overwhelmingly an internal transfer, not third party demand.

Revenue by product and business line

Each segment is effectively a single product company: UnitedHealthcare is 96.4% premium, Optum Rx is 91.7% product (drugs) on external revenue, Optum Insight is 97.1% services, and Optum Health straddles capitated premium (53.8% of external) and fees (45.4%).

Medicare & Retirement grew 22.8% in FY2025 to $171,285M, now 49.7% of UnitedHealthcare revenue against 45.1% in FY2021; Community & State grew 17.2%. Growth sits in the two government funded books whose rates UNH does not set. Employer & Individual Domestic grew 1.9%, the slowest line.

Lives served and volume metrics

Domestic medical lives grew 0.8% in FY2025 while UnitedHealthcare domestic revenue grew 16.0%, so essentially all of the segment's growth was price and mix, not membership. Risk bearing commercial lives fell (680) thousand while administrative services lives rose 600 thousand, a shift out of the product that books premium into the one that books only a fee.

Optum Health has lost 8 million people served since 2023 while Optum Rx scripts rose 7.6%; the two Optum growth engines are moving in opposite directions. Optum Insight backlog shrank $1.7B while the affiliated portion grew $0.4B, so external backlog fell from $20.3B to $18.2B, down 10.3%.

Segment drivers, one line each

Optum Rx alone grew operating income in FY2025, up 23.3%; Optum Health swung $(8,048)M to a $(278)M loss, decomposed in the MD&A chapter.

The intersegment elimination

UnitedHealthcare records zero intersegment revenue in every year — the flow is one directional, Optum billing UnitedHealthcare. Eliminations rose 86.7% from FY2021 to FY2025 against 55.6% consolidated revenue growth, so internal billing is growing faster than the company. Optum Rx intersegment revenue rose 21.8% in FY2025 alone, versus 8.0% external growth: the pharmacy benefit franchise is increasingly a captive of the health plan.

2026 realignment and the latest print

Effective 1 January 2026 Optum Financial, including Optum Bank, moved from Optum Health into Optum Insight; reportable segments are unchanged and prior periods are recast from the Q1 2026 10-Q. Recast H1 comparisons (10-Q 0000731766-26-000197):

Growth collapsed from 11.8% in FY2025 to 1.2% in H1 2026 as UnitedHealthcare medical lives fell (1,590) thousand to 48,525 thousand at 30 June 2026, Medicare Advantage down (785) thousand and Medicaid down (710) thousand. The model is now shrinking on the volume that drove FY2025 growth.

Sources: FY2025 10-K 0000731766-26-000062 (Items 1, 7, Note 15); FY2023 10-K 0000731766-24-000081 (Item 7, Note 14); Q2 2026 10-Q 0000731766-26-000197 (Part I Items 1 and 2).

Financial Analysis & Ratios

Revenue grew 11.81% in FY2025; the ratios below trace how that year cut operating income 41.26%, from $32,287M to $18,964M.

FY2021 through FY2025, from the audited 10-Ks (accessions 0000731766-22-000008, 0000731766-23-000008, 0000731766-24-000081, 0000731766-25-000063, 0000731766-26-000062) and eight interim 10-Qs covering FY2024 and FY2025. Figures $M except per share, ratios and percentages. Negatives in parentheses.

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1. Income statement, five years as filed

Revenue compounded 11.7% a year over four years while operating income ended FY2025 below its FY2021 level. FY2025 revenue grew 11.81% and operating income fell 41.26%, the first material divergence in the series.

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2. Growth and margin ratios

Gross margin here is revenues less medical costs and cost of products sold; it fell 595bp across FY2024 and FY2025. The FY2025 effective tax rate of 12.86%, 764bp below FY2023, is not repeatable: it rests on a $(789)M foreign rate differential and a $(547)M other nondeductible credit on a shrunken pretax base.

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3. Insurance operating ratios

One point of medical care ratio is worth $3,522M of operating income at the FY2025 premium base of $352,229M, or 18.6% of the entire FY2025 operating income of $18,964M; that conversion factor is used throughout this report and is not rederived elsewhere. On it, the 716bp deterioration from the FY2022 trough to FY2025 is worth roughly $25.2bn of medical cost at FY2025 premium volume. Two reserve quality signals point the same way: days in claims payable fell 4.6 days from FY2022 to 45.7, and prior year favourable development collapsed from $1,720M in FY2021 to $140M in FY2025, so reserve releases no longer cushion the loss ratio. FY2025 also carries a $672M premium deficiency reserve, the first in the five year window.

Days in claims payable here is medical costs payable over full year medical costs, annualised on 365 days. The company publishes the same ratio against fourth quarter medical costs, which gives 44.1 days for Q4 2025 and 47.0 for Q4 2024; the quarterly series appears in the MD&A chapter.

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4. MANDATORY RECONCILIATION CHECK — quarterly revenue to audited full year

Method: sum the three interim quarters in each 10-Q, tie to the nine month figure it reports, then derive Q4 as audited full year less nine months.

FY2024 — 10-Q accessions 0000731766-24-000155, 0000731766-24-000262, 0000731766-24-000323; 10-K 0000731766-25-000063

FY2025 — 10-Q accessions 0000731766-25-000131, 0000731766-25-000236, 0000731766-25-000305; 10-K 0000731766-26-000062

RESULT: PASS for FY2024 and PASS for FY2025. The three quarters tie to the reported nine month total to the dollar in both years, and the derived fourth quarter is a clean plug against the audited full year with a zero residual. No reconciling item is required on the revenue line.

One adjacent item worth flagging, since it is a genuine interim to annual difference and not a revenue difference: the loss on sale of subsidiaries recorded across the FY2024 quarters was $(7,086)M in Q1, $(1,225)M in Q2 and $(20)M in Q3, totalling $(8,331)M, against the audited full year of $(8,310)M. The reconciling item is a $21M favourable remeasurement in the fourth quarter, not a restatement of any earlier quarter. FY2025 behaves the same way: $(15)M, $(41)M and $(83)M give $(139)M for nine months against $(265)M for the year, so Q4 carried a further $(126)M of remeasurement.

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5. Quarterly trajectory, FY2024 and FY2025

Q4 columns are derived as the audited full year less the reported nine months. Q4 diluted EPS is shown as n/a because EPS is not additive across periods and no Q4 share count is filed; the derived Q4 net income attributable to UNH of $5,543M in FY2024 and $10M in FY2025 is exact. The deterioration is a single continuous slope: the medical care ratio rose 809bp from 84.29% in Q1-24 to 92.38% in Q4-25, and quarterly operating income fell from $9,119M in Q1-25 to $380M in Q4-25, a 96% decline inside four quarters. Q1-24 GAAP net income is negative solely because $(7,086)M of the South America disposal loss landed in that quarter, and Q4-25 operating income of $380M absorbs the operating portion of the $(2,878)M pretax charge itemised in the Material Events chapter.

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6. GAAP to core earnings

The loss on sale of subsidiaries is disclosed below the operating income line, between interest expense and earnings before income taxes. Operating income, operating margin, medical care ratio and operating cost ratio are therefore unaffected by it in both years; only pretax, net income and EPS are affected. FY2024 additionally carries a $1,215M discrete tax charge disclosed in the rate reconciliation as disposition of business, worth 6.1pp of the FY2024 effective rate.

No tax effect is separately disclosed for the FY2025 $(265)M, which is treated as fully nondeductible; the FY2025 add back is therefore pretax equals after tax. This core measure removes only the disposal items and is narrower than the company's own adjusted earnings measure, which additionally excludes intangible amortisation and cyberattack effects. The judgement the reconciliation delivers is blunt: on a core basis FY2025 EPS fell 47.5% against FY2024, versus the 14.70% GAAP decline. The GAAP optics understate the FY2025 collapse because FY2024 GAAP was itself depressed by $9,525M of after tax disposal cost.

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7. Returns on capital

Invested capital is total debt plus total equity including noncontrolling interests: $121,048M in FY2021 rising to $178,479M in FY2025, a 47.4% increase against operating income that fell 20.9% over the same span. ROIC on a statutory tax basis halved from 17.27% in FY2023 to 8.47% in FY2025 and is now well inside any plausible cost of capital. ROE held above 25% through FY2023 and has since lost 1,400bp.

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8. Liquidity, leverage and coverage

The current ratio has sat below 1.0 for all five years, normal for a health insurer whose medical costs payable is a current liability funded by float rather than by current assets. The leverage move is the real signal: debt rose $32,386M or 70.4% over four years while EBITDA in FY2025 was $3,748M below FY2021. Debt to EBITDA at 3.36x is double the FY2021 level and is the product of both numerator and denominator moving the wrong way; interest coverage of 4.74x on operating income is a third of the FY2021 14.44x. Interest expense of $4,002M in FY2025 now consumes 21.1% of operating income, against 6.9% in FY2021.

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9. Balance sheet summary

Goodwill plus intangibles of $130,973M in FY2025 is 139.2% of equity attributable to UNH and 42.3% of total assets, so tangible book value is negative. Retained earnings fell $433M in FY2025, the first decline in the window, as $13,461M of buybacks and dividends exceeded $12,056M of earnings. Redeemable noncontrolling interests fell from $4,323M to $1,608M in FY2025, matching the $2,600M reduction on deconsolidation in the dispositions note.

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10. Cash flow summary

Every line reconstructs to the filed subtotal. Operating cash flow fell 32.2% from the FY2023 peak of $29,068M to $19,697M, a steeper fall than net income as FY2024 and FY2025 both absorbed the cyberattack loan programme, $(9,033)M advanced in FY2024 against $4,514M and $1,680M repaid since.

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11. Cash conversion, buybacks and dividends

Cash conversion above 1.2x every year is the float model's structural advantage and the one metric that has not deteriorated; the FY2024 and FY2025 readings above 1.5x are flattered by noncash disposal losses. The distribution picture is the constraint. Shareholder returns absorbed 83.7% of free cash flow in FY2025 against 51.7% in FY2021, and the dividend alone now takes 65.7% of earnings against 30.6% four years ago. Buybacks were cut 38.4% in FY2025 to $5,545M, the first reduction in the window, and the remaining authorisation fell to 21M shares from 45M at FY2021. The FY2025 10-K repurchase note carries an aggregate cost of $5,482M against $5,545M of cash paid, a $63M settlement timing difference; the FY2024 pair is $8,942M against $9,000M.

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12. Summary scorecard

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Sources: UNH Forms 10-K for FY2021 (0000731766-22-000008), FY2022 (0000731766-23-000008), FY2023 (0000731766-24-000081), FY2024 (0000731766-25-000063) and FY2025 (0000731766-26-000062); Forms 10-Q for Q1 to Q3 FY2024 (0000731766-24-000155, -000262, -000323) and Q1 to Q3 FY2025 (0000731766-25-000131, -000236, -000305). Retrieved via SEC-API.io. Q4 figures are derived as audited full year less reported nine months. Ratios are computed from as filed data; averages use opening and closing balances.

MD&A & Management Commentary

Chapter 2 measures the 360bp MCR move that took operating income to $18,964M; this chapter is management's account, in the words it filed and spoke.

Scope: Item 7 of the FY2025 10-K (0000731766-26-000062) and the FY2024 10-K (0000731766-25-000063); Part I Item 2 of the Q1 2026 10-Q (0000731766-26-000127) and Q2 2026 10-Q (0000731766-26-000197); eight 8-K Exhibit 99 releases from December 2024 to July 2026. Earnings call material is drawn from UnitedHealth Group prepared remarks PDFs published on the company investor relations site and is company investor material, not EDGAR; every such line is tagged [IR].

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1. The one sentence that changed

The same paragraph heading, "Medical Cost Trends," appears in both annual filings. Its content inverted.

Judgement: the FY2024 10-K, filed 49 days before the first guidance cut, contained no warning. The reversal is total and is stated by management itself.

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2. Medical care ratio, quarter by quarter

Management splits the 360bp itself: "The reported medical care ratio of 89.1% included a 20 basis point negative impact from loss contracts included in the charge, resulting in an adjusted medical care ratio of 88.9%, or an increase of 340 basis points year-over-year" (EX-99.1, 0000731766-26-000025). So 340bp of the 360bp is underlying and 20bp is the fourth quarter reserve.

Days claims payable, the indicator management publishes each quarter against Q4 medical costs: 47.0 (Q4 2024), 45.5, 44.5, 46.2, 44.1 (Q4 2025), 48.6 (Q1 2026), 47.0 (Q2 2026). The trough coincides with the earnings trough. The annualised full year basis in chapter 2 gives 45.7 days for FY2025.

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3. Management's own explanation for the 360bp

The FY2025 10-K gives an eight item causal list, verbatim and in the order filed:

"The MCR increased as a result of the revenue effects of the Medicare funding reductions, elevated medical cost trend, the member profile of newly added patients under value-based care arrangements, the acceleration of anticipated future losses in 2026 related to certain Optum Health value-based care contracts, decreased favorable development, the impacts of the IRA on Medicare Part D and the impacts of market morbidity changes on our individual exchange offerings, partially offset by the incremental medical costs for accommodations made to care providers in 2024 as a result of the Change Healthcare cyberattack." — FY2025 10-K, Item 7, Consolidated Financial Results (0000731766-26-000062)

Two of those eight are quantified elsewhere in the filings.

• Favorable prior year development collapsed from $700M (FY2024) to $140M (FY2025), a $560M swing, per Critical Accounting Estimates in each 10-K.
• The 2026 loss contract reserve booked into FY2025 medical costs was $623M (FY2025 10-K, Restructuring and Other Actions).

Mechanism, in management's words, on what drove unit cost: "We have also observed an increase in health care unit costs and in the intensity of services delivered, driven by increases in provider pricing and additional services bundled per visit" (FY2025 10-K, Item 7).

From the earnings release, not the 10-K: "The higher medical trends are being driven by both an increase in units consumed and rapidly rising costs per patient encounter." The same release quantifies it: "medical cost trend in Medicare Advantage offerings is expected to run at about 7.5% in 2025 compared to the 2025 pricing expectation of just over 5%" (EX-99.1, 0000731766-25-000228, 2025-07-29). That 250bp gap is the clearest number management published on the cause.

Scale of the miss, from the call: "Our current view for 2025 reflects $6.5 billion more in medical costs than we anticipated in our initial outlook." — Tim Noel, UnitedHealthcare CEO, Q2 2025 prepared remarks [IR]. And: "We now expect a full-year medical care ratio of 89.25%, plus or minus 25 basis points. This compares to the initial 86.5% mid-point we offered at the end of last year." — John Rex, President and CFO, Q2 2025 prepared remarks [IR].

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4. Management's own explanation for the OptumHealth swing

OptumHealth operating income went from $7,770M (FY2024) to $(278)M (FY2025), a swing of $(8,048)M.

"Earnings from operations decreased due to Medicare Advantage funding reductions; elevated medical cost trends; the member profile of newly added patients under value-based care arrangements; the impacts of restructuring and other actions, including the establishment a loss contract reserve related to anticipated future losses in 2026 for certain value-based care businesses; gains on dispositions in 2024; impacts of net portfolio divestitures in 2025; and reduced investment income; partially offset by cost management initiatives and incremental medical costs for accommodations to support care providers in 2024 as a result of the Change Healthcare cyberattack." — FY2025 10-K, Item 7, Optum Health (0000731766-26-000062)

Decomposition of the $(8,048)M, using management's own adjusted figures from EX-99.1 (0000731766-26-000025):

Judgement: roughly 70% of the OptumHealth swing is underlying operating deterioration, not the fourth quarter charge. The restructuring and other actions impact at OptumHealth alone was $1.7B, and portfolio losses a further $821M (FY2025 10-K).

The cohort explanation, which the 10-K abbreviates to "the member profile of newly added patients," was given plainly on the call:

"The margin compression reflects significant growth in new membership cohorts – with nearly 40% of the patients served today having come in since the beginning of 2024." — Patrick Conway, Optum CEO, Q2 2025 prepared remarks [IR]

"Overall, Optum Health earnings in 2025 are approximately $6.6 billion below our expectations." — Patrick Conway, Q2 2025 prepared remarks [IR]

The April 2025 8-K names the specific reimbursement mechanic: "Unanticipated changes in the profile of Optum Health members impacting planned 2025 reimbursement due to unexpectedly minimal 2024 beneficiary engagement by plans exiting markets" (EX-99.1, 0000731766-25-000123). Restated: OptumHealth inherited patients whose 2024 diagnoses were never captured, so 2025 risk revenue was set too low against real 2025 cost.

By Q3 2025 the segment was at a 1% margin: "Third quarter 2025 earnings from operations were $255 million, reflecting an operating margin of 1%. This compares to operating earnings of $2.2 billion and an operating margin of 8.3% in the third quarter 2024" (EX-99.1, 0000731766-25-000301).

The remedy, in management's words: "We've narrowed our affiliated network by nearly 20% since this time last year" and "streamlined our risk membership by approximately 15%." — Patrick Conway, Q4 2025 prepared remarks [IR].

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5. Guidance, changed six times in fourteen months

Adjusted EPS guidance fell from $29.75 to $16.00 in seven months, a 46% cut. GAAP EPS landed at $13.23, 53% below the $28.40 December 2024 midpoint.

The 2026 outlook, raised twice since it was set:

Judgement: the 2026 MCR guide has been tightened twice and lowered 70bp, from 88.8% +/- 50bp to 88.1% +/- 25bp. Halving the band is the stronger signal.

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6. What management said, when

Note the CEO changed on 2025-05-13 (Witty out, Hemsley in, same 8-K that pulled guidance) and the CFO changed between the Q2 2025 call (John Rex) and the Q3 2025 call (Wayne DeVeydt). Both changes fall inside the margin collapse.

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7. Trends and risks management flags on its own initiative

New or materially escalated language in the FY2025 10-K Item 7 against the FY2024 10-K:

New in the 2026 10-Qs, absent from both 10-Ks:

• "Commercial medical cost trend is elevated, in part due to the independent resolution process under the No Surprises Act and more aggressive billing practice among providers" (Q2 2026 10-Q, 0000731766-26-000197). The blame has moved from senior utilization to provider billing.
• "we have voluntarily pledged to rebate 2026 profits on our individual exchange products to customers" (Q1 and Q2 2026 10-Qs). A self imposed revenue reduction, disclosed as a driver of lower UnitedHealthcare revenue.
• The DOJ risk factor language broadened from "the DOJ's legal action relating to the risk adjustment submission matter" (2025 releases) to "the DOJ's legal actions concerning our participation in the Medicare program" (Q3 2025 onward).

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8. The 2026 turn, in the filings

Management's attribution: "The MCR decreased due to favorable prior period reserve development, affordability and medical cost management initiatives, and pricing trends, partially offset by medical costs trend which remains above historical levels" (Q2 2026 10-Q). The release quantifies it: "MCR was affected by $860 million of net favorable prior period development, with the majority related to 2026 dates of service" (EX-99.1, 0000731766-26-000191).

Judgement: $860M of net favorable development on $86,956M of Q2 2026 premiums is 99bp of the 270bp MCR improvement. Management has not claimed otherwise, nor netted it out. The remaining about 170bp is price and mix, bought by shedding 1.59 million members and 27 million scripts. Revenue is guided down 2% for FY2026, the price of margin repair, a decline "reflecting planned right-sizing across the enterprise" (EX-99.1, 0000731766-26-000025).

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9. Verification notes

• The segment revenue and segment operating income reconciliations both PASS for FY2023, FY2024 and FY2025, as set out in the front matter.
• Q4 2025 MCR of 92.4% is derived: FY2025 10-K premiums and costs less nine month figures in EX-99.1, 0000731766-25-000301. UNH does not publish it.
• The FY2025 10-K does not contain forward EPS guidance; all guidance figures above come from 8-K Exhibit 99 releases.
• No revenue outlook was restated in the April 2025, October 2025 or April 2026 releases; those cells are n/a, not zero.
• The newsfilter.io transcript link supplied for this chapter could not be retrieved. Transcript quotes tagged [IR] come from UnitedHealth Group prepared remarks PDFs on the company investor relations site (Q1 2025, Q2 2025, Q3 2025, Q4 2025), which are company investor material and not SEC filings.

Sector & Competitor Analysis

Management's account puts a 360bp medical care ratio move at the centre of FY2025; this chapter tests how much of that the industry also suffered.

1. Sector structure

US managed care is a spread business on other people's medical bills: seven listed carriers booked $1,693,526M of FY2025 revenue and kept $49,834M of operating income before impairments, a 2.94% take. The industry is a barbell of four scale insurers (UNH $447,567M, CVS $402,067M, CI $274,900M, ELV $199,125M) and three programme specialists (CNC $194,777M, HUM $129,664M, MOH $45,426M). Every one of the seven files under SIC 6324 except CVS, which files under SIC 5912 because retail pharmacy still anchors its filing identity.

2. The medical loss ratio mechanic

The medical care ratio, MCR, is medical costs divided by premiums earned, and at the conversion factor established in chapter 2 it is the only operating variable that matters at this scale. Premiums are priced twelve to eighteen months before the claims they must cover, so an acceleration in utilisation lands entirely on the carrier inside the plan year. Roughly 90 cents of every premium dollar leaves as claims, so the residual margin is levered eight to ten times to the claims line, which is why a 360bp MCR move erased 41% of UNH's operating income.

3. Medicare Advantage risk adjustment

MA plans are paid a capitated rate per member adjusted by a risk score built from diagnoses coded in the prior year, so revenue is a function of documentation as much as of health status. CMS phased in the v28 risk model over 2024 and 2025, compressing the coding intensity that had supported MA margins, while the RADV audit programme extended extrapolated recoveries to prior payment years. The result is visible in the data: HUM, the most MA weighted filer, ran a 90.22% FY2025 MCR against 87.28% in FY2023, a 294bp erosion over two years with only 42bp of it landing in FY2025.

4. The ACA minimum MLR rebate rule

Statute caps the upside, not the downside: 45 CFR Part 158 requires insurers to spend at least 85% of large group and 80% of individual and small group premium on claims and quality improvement, or rebate the shortfall. Six of the seven filers ran a FY2025 MCR at or above 89%, so the rebate floor was not the binding constraint anywhere in the group; CI at 85.32% sits closest to it, 32bp of headroom, but its residual insured book is small after the Medicare Advantage divestiture. The rule matters as an asymmetry, not a cost: a carrier that underprices keeps the full loss, while a carrier that overprices refunds the excess.

5. PBM economics

Pharmacy benefit management is a high volume, low margin toll on drug spend, and its reported margins are a function of what sits in the denominator. Cigna's Evernorth turned $234,953M of FY2025 revenue into $7,221M of adjusted pretax income, a 3.07% margin; CVS Health Services turned $190,425M into $7,151M of adjusted operating income, 3.76%. OptumRx appears to earn 12.47% on $57,679M of external customer revenue, but that denominator excludes the intra group scripts dispensed for UnitedHealthcare members, so the apparent margin advantage is a consolidation artifact rather than a pricing edge.

6. What compressed sector margins in FY2025

The compression was real and broad: the six peer aggregate MCR rose from 89.45% to 90.99%, a 155bp deterioration, and every filer except CVS reported a higher MCR than in FY2024. Median peer MCR drift was 142bp, and among the four pure play insurers (ELV, HUM, CNC, MOH) the median was 207bp. Aggregate group operating income before impairment fell from $67,966M to $49,834M, down (26.7)%, on revenue that grew 11.51%.

7. Peer comparison table

FY2025 versus FY2024, $M as filed, from each filer's FY2025 10-K XBRL.

Notes on comparability. ELV tags no operating income subtotal, so its figure is total revenues less total benefits and expenses plus interest expense ($199,125 less $192,415 plus $1,402 = $8,112). CNC and MOH report investment income below the operating line, understating their operating margins against UNH, CI, ELV and CVS, which report it above. CNC's FY2025 operating loss carries $7,311M of asset impairment and CVS's carries $5,725M of goodwill impairment; both are stripped in the ex impairment rows. CI's premium base fell from $45,996M to $40,261M because it sold its Medicare Advantage business, so its MCR is computed on a materially different book year over year and is the least comparable in the group. MOH tags medical care costs as CostOfGoodsAndServicesSold rather than PolicyholderBenefitsAndClaimsIncurredNet; the line is the same economic item. CNC's premium denominator is the HealthCarePremiumMember dimension ($171,556M), excluding $3,025M of service revenue and $20,196M of premium tax revenue.

8. Positioning

UNH's FY2025 MCR of 89.15% is still the second lowest in the group and 182bp below the 90.97% peer median, so on level it retains an underwriting advantage. On change it is the worst in the group at +360bp, one basis point ahead of CNC and 2.5 times the 142bp peer median. UNH is the only filer in the seven whose margin collapse cannot be explained by an impairment charge, an accounting event, or a divested book.

9. The judgement, quantified

UNH's operating income fell $13,323M, from $32,287M to $18,964M. Of that, $12,665M, or 95.1%, is explained arithmetically by the 360bp MCR deterioration applied to the FY2025 premium base of $352,229M. Splitting that 360bp against the 142bp peer median drift: 142bp is sector wide and costs $4,991M, or 37.5% of the decline; the residual 218bp is UNH specific and costs $7,674M, or 57.6% of the decline. Had UNH's MCR drifted only at the peer median, FY2025 operating income would have been approximately $26,638M and the operating margin 5.95% rather than 4.24%.

The share test confirms the split. UNH is 26.43% of the seven company FY2025 revenue base but 73.48% of the group's $18,132M aggregate decline in operating income before impairments. Excluding UNH, peer adjusted operating income fell (13.5)%; including UNH the group fell (26.7)%. The peer median operating margin decline ex impairment was (76)bp against UNH's (383)bp, a factor of 5.0.

Verdict: roughly two fifths sector, three fifths company. The sector was genuinely under pressure, and 37.5% of UNH's operating income decline is what a median managed care operator suffered in FY2025. The remaining 57.6% is idiosyncratic, and it does not sit in the insurance book alone: the OptumHealth swing of $(8,048)M is a value based care underwriting failure with no analogue at ELV, HUM or MOH, all of whom kept their care delivery exposure smaller. It is 60.4% of the total decline and overlaps economically with the medical cost bridge above, since OptumHealth's risk bearing claims are partly the same claims. The two lenses agree on direction and magnitude: the majority of UNH's FY2025 margin collapse is company specific.

Material Events & Contracts

Two fifths of the FY2025 profit decline was sector wide; 8-K filings to 2026-08-31 show how UNH disclosed, charged and financed the other three fifths.

Fifteen Current Reports on Form 8-K were filed between 2025-09-01 and 2026-08-31, of which four carried Item 2.02 earnings releases, six carried Item 7.01 Reg FD disclosures, three carried Item 5.02 officer or director actions, one carried Item 5.03 bylaw amendment and one carried Item 5.07 annual meeting results. No Item 1.01 material definitive agreement and no Item 8.01 filing was made in the period.

8-K event log, 2025-09-01 to 2026-08-31

Two judgements the event log forces

The $(2,878)M charge is the single event that separates the two EPS numbers, and the FY2025 10-K itemises it. Restructuring and other actions of $(2,521)M cover real estate rationalisation and workforce reductions $(746)M, contractual reassessments $(573)M, the loss contract reserve on 2026 value based care losses $(623)M, net valuation losses on equity securities $(329)M and advance funding of the United Health Foundation $(250)M. Added to that are $(799)M of increased reserves against Change Healthcare provider loans at Optum Insight and the $(126)M fourth quarter increment on the loss on sale of subsidiaries, less a $568M net gain on portfolio actions, being $1.5B of gain at Optum Rx against losses of $(821)M at Optum Health and $(68)M at Optum Insight. Only the $(623)M reserve lands in medical costs; $(1.4)B lands in operating costs and the rest in premium revenue, investment income and the loss on sale line.

Quarterly results reported by 8-K in the window

Q4 2025 is the trough: earnings from operations of $0.4B against $7.8B in Q4 2024. The next two quarters recover to $9.0B and $8.0B, and the MCR falls 600bp from 89.9% in Q3 2025 to 83.9% in Q1 2026. Membership shrank every quarter of the recovery, from 50.1M to 48.5M: margin repair came with volume loss.

Material contracts, FY2025 10-K exhibit index

The exhibit index contains no new credit agreement, indenture or acquisition agreement filed with the FY2025 10-K. Every debt instrument is incorporated by reference, and the company invokes Item 601(b)(4)(iii) to withhold copies of long term debt instruments.

Note that no exhibit in the index covers the Amedisys merger agreement, the South American sale agreement or the Alegeus agreement. Each was disclosed in narrative form only, which is the pattern for a filer that treats these transactions as below the materiality threshold of Item 601(b)(2).

Credit facilities and note activity

All three facilities are syndicated across 26 banks and fully backstop the commercial paper program. Pricing is one month term SOFR plus a ratings based spread; a drawn rate at year end would have fallen between 4.2% and 6.8%. The company was in compliance with all covenants at 2025-12-31.

Cash proceeds from long term debt issuance were $2,969M against repayments of $3,050M, a net financing draw of $(81)M, versus $17,811M issued in FY2024. Commercial paper rose from $1,300M to $2,249M at a 3.8% weighted average rate, a $949M face increase that nets to $807M on a cash flow basis, so the year's $726M of net issuance came entirely from the short end. By 2026-06-30 the company reported no commercial paper outstanding at all.

The weighted average coupon on FY2025 issuance was 106bp above the coupon on what was retired. Refinancing at these levels is the mechanical reason interest expense rose to $4,002M in FY2025 from $3,906M in FY2024 on essentially flat face value.

Debt maturity ladder

Reconciliation check, PASS: consolidated maturities of $79,384M less parent only maturities of $78,677M equals $707M, which matches the $708M of subsidiary other financing obligations to $1M. Second check, PASS: total short term borrowings and long term debt carrying value is $77,681M plus $708M other financing obligations equals $78,389M, which equals current debt of $6,069M plus noncurrent debt of $72,320M on the balance sheet exactly.

The maturity face of $79,384M exceeds carrying value of $78,389M by $995M, the unamortized discount and issuance cost net of fair value hedges.

Only 26.1% of principal falls due through 2030. The 2026 tower of $6,082M decomposes exactly, a third PASS: $2,249M commercial paper plus notes of $500M at 1.25%, $1,000M at 3.10%, $1,000M at 1.15%, $650M at 4.75% and $500M floating, plus $182M current subsidiary financing obligations, equals $6,081M against the $6,082M disclosed, a $1M rounding gap. The four fixed rate 2026 tranches carry a blended coupon of 2.53%; replacing them at the 5.15% level of FY2025 issuance would add roughly $83M of annual interest on $3,150M refinanced.

Debt to capital fell 290bp across four consecutive quarters, from 44.1% at 2025-09-30 to 41.2% at 2026-06-30, without net new debt reduction of any size. The driver is the denominator: retained earnings recovery plus the elimination of $2,249M of commercial paper by 2026-06-30.

Leadership changes disclosed in the period

Michele Hooper signed the FY2025 10-K as a director on 2026-03-02 but was not among the nine nominees elected on 2026-06-01, so the board contracted by one seat over the period even after adding Gottlieb. The Q1 2026 release states the company created a Public Responsibility Committee of the Board, named a Lead Independent Director and named new committee chairs; none of these three actions was reported on a Form 8-K.

The Hemsley option amendment is the clearest governance signal in the period. A compensation committee does not tighten a sitting CEO's granted award unless it expects a contest, and say on pay support of 82.74% in June, 12.26 points below the ratification vote, confirms the concern was real.

Investigations, litigation and tax

The IRS notice is the only genuinely new adversarial development of the period and it is unquantified in the filings. The wording shift on subpoenas from a routine present tense habit to a specific perfect tense response is a small but deliberate change; it is not accompanied by any named matter.

Acquisitions and divestitures

FY2025 shows a $1.7B deconsolidation gain and a $910M gain on sale of business inside operating costs, while $(2,473)M of held for sale remeasurement losses sit alongside. Net of these, portfolio actions were a drag; the $(265)M loss on sale line and the $(950)M other remeasurement are the visible pieces. In FY2024, portfolio gains of $3,333M were reported and the Brazil exit alone booked $(7,086)M of the $(8,310)M full year loss on sale, all of it in the first quarter.

The South American exit will not close until the second half of 2026 and the held for sale remeasurement widened from $(1,523)M at 2025-12-31 to $(1,656)M at 2026-06-30, a further $(133)M of deterioration over two quarters while the assets sat unsold.

Capital returns in the period

The quarterly dividend was $2.10 paid 2025-03-18 and $2.21 for each of the three payments on 2025-06-24, 2025-09-23 and 2025-12-16, so the rate was flat through the entire event window. Buybacks were cut 38% in dollars while the average execution price fell 14%, meaning the company bought fewer shares at a lower price in the year its stock derated. The Q1 2026 release announces a forward arrangement of at least $2.0B and the Q2 2026 guidance lifts full year repurchase to at least $5,000M, so the pace resumed only after the FY2026 outlook was raised.

Statutory capital and surplus of subsidiaries was $43.1B at 2025-12-31 against a $23.2B regulatory requirement, and the parent received $6.8B of subsidiary dividends in FY2025 versus $19.3B in FY2024, a 65% decline. Net of capital infusions the direction reverses outright: the FY2025 10-K reports that the US regulated subsidiaries received $535M more capital than they paid up, against $9.2B of net dividends paid up in FY2024. That is the tightest constraint visible in the period: the parent funded a $7,916M dividend and $5,545M of buybacks while its regulated entities were a net taker of cash, and covered the gap by drawing $7,162M of long term notes from its own subsidiaries.

Ownership, Voting Power & Annual Meeting

The board behind a 41% profit fall and the $(2,878)M charge met shareholders on 2026-06-01 with 768,066,717 shares represented and no control block.

Verdict: one share, one vote, no control block, and a shareholder base that punished the board in 2025 and largely forgave it in 2026. Say on pay went from 60.00% to 82.74%. The single contested item, an independent board chair, drew 20.24% support.

UnitedHealth Group has a single class of common stock, and the 2026 DEF 14A (accession 0001104659-26-046125) states that each owner of record is entitled to one vote for each share of common stock held. There is no dual class structure, no super voting stock and no founder block: economic ownership and voting power are the same quantity. On the 2026-04-02 record date there were 908,213,180 shares issued, outstanding and entitled to vote, against 910,223,791 on the 2025-04-04 record date, a reduction of (2,010,611) shares or (0.22%) from buybacks.

1. Voting mechanics as filed

Turnout fell (463bp) year on year; 89,736,263 broker nonvotes were recorded on every matter but auditor ratification, 11.68% of shares represented.

2. Holders above 5%, as the proxy reports them

Two judgements. First, the 5% table is stale by construction: BlackRock's figure comes from a Schedule 13G/A filed 2024-02-06, more than two years before the meeting, and the Vanguard figure is carried at 10.11% even though the proxy's own footnote records that on 2026-03-27 Vanguard reported it no longer has, or is deemed to have, beneficial ownership of the shares following an internal realignment. Second, insider alignment is thin and shrinking: the entire board and executive team held 1,708,073 shares, 0.19% of the company, down from 0.28% a year earlier, of which Stephen Hemsley alone accounts for 1,335,742 shares on the proxy's beneficial ownership definition, against the 1,055,287 shares his Forms 4 report in the Insider Activity chapter.

BlackRock is also a counterparty, not merely a holder: the proxy discloses that UnitedHealth paid BlackRock $7.8 million in the related person transactions section while BlackRock held approximately 7.99% of the stock as of 2026-04-02.

3. Schedule 13D and 13G traffic, 24 months to 2026-08-31

Zero Schedule 13D filings in the two year window. No activist, no control seeker, no group has crossed 5% with an intent to influence control; every disclosure is a passive Rule 13d-1(b) institutional filing. The only structural change is Vanguard's internal realignment, which retired the legacy 10.08% block and replaced it with a 7.50% stake at a new entity. That new entity reports sole voting power over 9,251,706 of its 68,122,483 shares, or 13.58%, so Vanguard's disclosed voting reach is now far below its disclosed economic stake.

4. Form 13F: the reporting base is widening

Across the last four quarters the count rose from 3,272 to 3,453, +181 filings or +5.53%. The 2026-03-31 dip to 3,131 is the low of the five quarter window and coincides with the quarter of the lowest implied share price; the rebound to a five quarter high in the June quarter is the cleaner signal.

5. Largest reported positions, by quarter

Aggregate value across all 3,453 filers cannot be summed from this dataset, so the table below tracks a fixed panel of the nine largest reported holders. BlackRock's 2026-03-31 filing could not be retrieved and is shown as n/a rather than estimated.

The eight manager panel added 35,217,121 shares, +15.06%, in four quarters while reported value moved $80.714B to $111.871B, +38.60%. The gap between the two is price, not flow: implied price per share inside the panel ran $345.21, $330.03, $269.83 and $415.83 across the four quarters, a trough to peak swing of +54.11%. Reported value therefore fell (16.16%) into 2026-03-31 on a rising share count and then rose 65.32% in a single quarter. Institutions were net accumulators through the drawdown. Two moves dominate: Charles Schwab Investment Management took its position from 8,440,352 to 20,817,755 shares in the March 2026 quarter, and FMR went from 12,019,046 to 27,992,995 shares in the June 2026 quarter, +132.9%.

The panel of nine held 345,894,729 shares at 2026-06-30, 38.54% of the 897,594,847 shares outstanding reported at 2026-07-31.

6. Voting authority is not the same as ownership

The two Vanguard filing entities report 83,794,759 shares, 9.34% of shares outstanding, with zero voting authority at the filer, and State Street reports voting authority over only 11.1% of its 45,633,267 shares on Form 13F even though its Schedule 13G reports shared voting power over 24,261,527 shares. Voting power inside the index complexes sits at a different legal entity from the position, so the 13F holder table overstates who casts the ballots.

7. The 2026 annual meeting: every proposal, every count

Percentages are as certified in the 8-K filed 2026-06-05 (accession 0000731766-26-000138): for directors the denominator is for plus against, for items 2, 3 and 4 abstentions count as against. All twelve items resolved the way the board recommended. Pass rate 12 of 12, or 100%. Every director seat cleared 89%, and the only shareholder proposal was defeated by a margin of 3.92 to 1.

8. The contested item: independent board chair

At 20.24%, this is the most supported dissident item UnitedHealth has faced in the two meetings covered here, a level that keeps a proposal resubmittable but far from a mandate. The board's defence rests on Hemsley being an exception, not on the merits of a combined chair and chief executive.

9. Year on year: the shareholder base changed its mind

The 2025 protest vote hit the audit and compensation incumbents, Noseworthy at 85.92% and Flynn at 86.79%; both rehabilitated in 2026. The 2026 protest hit Charles Baker, whose support fell (973bp) to 89.68%, making him the most opposed director on the slate and the only nominee with a double digit collapse. The board also shrank from ten seated directors in 2025 to nine nominees, Michele Hooper not renominated and Scott Gottlieb added.

The single loudest number in this chapter is say on pay: 60.00% in 2025, a level that normally triggers formal shareholder outreach and pay redesign, then 82.74% in 2026 after that redesign. The stock fell and the pay vote recovered, which says the 2025 vote was about pay structure rather than about performance.

Insider Activity

Outside shareholders returned say on pay to 82.74% in June 2026; insiders had already committed $32,119,275 in two windows 14 months earlier.

Verdict: insiders bought the collapse. They did not sell into it. They have not bought since.

Over the 24 months to 2026-08-31, UNH Section 16 insiders filed 258 ownership forms (253 Form 4, 5 Form 3, 0 Form 5) covering 326 transaction lines and 21 reporting persons. Open market purchases (code P) totalled $32,119,275 against sales (code S) of $1,573,156, a ratio of 20.4 to 1 by value and 29.2 to 1 by share count. Every dollar landed in two windows, January 2025 and May 2025, and nothing has been bought on the open market in the 15 months since 2025-05-16.

1. The 24 month scoreboard

Net voluntary dollar flow was +$30,546,119. Net reported dispositions of $26,809,894 were 94.1% code F tax withholding, which is mandatory and carries no information.

2. Monthly buying versus selling, 24 months

Twenty two of the 24 months show zero open market purchases. Twenty of the 24 months show zero open market sales.

3. The May 2025 buy cluster: every open market purchase, itemised

Hemsley alone was 77.9% of purchase dollars; Hemsley plus Rex were 93.5%. Both filings carry a weighted average price footnote: Hemsley traded in a $287.05 to $289.38 band, Rex in a $287.1576 to $291.8576 band, and both round dollar targets ($25.0M and $5.0M) indicate size was set in dollars, not shares. Five of 21 reporting insiders (23.8%) bought; four of those five were directors.

4. Every open market sale, itemised

Three of 21 insiders sold anything at all. Conway is 79.4% of all sale dollars and 80.8% of shares sold, at an average $367.74 across four sales. Baker's 27 share sale disposed of an inherited indirect position acquired 2025-08-01 and is immaterial at $9,613. The only sale that preceded the collapse was McSweeney's 701 shares at $626.23 on 2024-11-11, six months before the guidance withdrawal, and it was 0.03% of the 24 month code A award pool.

5. Insider transaction price path, from the filings themselves

Insider transaction prices fell from $626.23 (2024-11-11) to $271.17 (2025-05-15), a decline of 56.7%, then recovered to $410.00 (2026-08-05). Hemsley's $288.57 entry was 53.9% below the last insider sale price of $626.23.

6. Mark to market on the buy cluster

Reference price $390.00 is the 2026-08-21 Conway sale price reported on Form 4, accession 0000731766-26-000201. Flynn is the only buyer under water, because his January 2025 purchase at $511.575 preceded the collapse.

7. Rule 10b5-1 plans

Zero. The aff10b5One checkbox is false on all 258 forms filed in the 24 month window, no footnote in any of the 326 transaction lines contains the string "10b5", and zero Form 144 intent to sell notices were filed by any UNH insider between 2024-09-01 and 2026-08-31. Every purchase and every sale in this chapter was a discretionary, unplanned transaction. This raises the informational content of the May 2025 buying and of Conway's four sales alike.

8. Compensation flow, which is not a signal

Two grant events dominate: 2025-02-20 settlement of the 2022 to 2024 performance share awards, and the 2026-02-23 annual grant. Hemsley's 2025-05-14 reappointment grant of 602,773 nonqualified options at a $308.01 strike, first exercisable 2028-05-14 and expiring 2035-05-14, is 54.4% of all code A shares in the window and is entirely out of the money against the $288.57 he paid two days later in cash. Rex's single code M exercise on 2025-02-07 covered 25,504 options at a $108.97 strike; the footnote states he retained all net shares and sold none.

9. Roster changes, Forms 3

Five new Section 16 filers in 19 months against a 21 person roster is 23.8% turnover. Brian R. Thompson's last Form 4 reported 32,674.986 shares on 2024-09-24. Andrew Witty's last reported holding was 112,162.378 shares on 2025-03-18; he took no code P or S transaction in the window.

10. Hemsley beneficial ownership bridge

Hemsley's economic stake fell 5.1% over 13 months, and 100% of it is charitable gifting, not selling. The 2026 collapse in his reported direct line from 362,629 to 48,099 shares is Rule 16a-13 exempt transfers between his direct holdings and his trusts, disclosed in footnote, with no shares leaving his ownership.

11. The judgement

1. They bought the collapse. $32.1M of unplanned open market purchases arrived in the three sessions of 2025-05-14 to 2025-05-16, at $271.17 to $320.80, from the incoming CEO, the sitting CFO and three directors. That cluster is up 34.1%, or $10,939,845, at $390.
2. They did not sell into it. Total sales across 24 months were $1,573,156, which is 4.9% of purchase dollars and 6.2% of the code F tax withholding they were forced to suffer. Only one sale, McSweeney's $438,987, occurred before the collapse.
3. They have not bought since. Zero open market purchases in the last 12 months, against $954,523 of sales, all four of which came from Conway or Baker. Net voluntary insider flow over the last 12 months is $(954,523).

The signal is a single high conviction bottom tick that has not been reaffirmed. Insiders put $32.1M behind the recovery at the point of maximum distress and have added nothing at $390, a level 35% above where they bought, while the only insider transacting on the open market since is selling.

Source: SEC Forms 3, 4, 5 and 144, UnitedHealth Group Incorporated, CIK 731766, retrieved via SEC-API.io. 258 ownership forms, period 2024-09-01 to 2026-08-31. Transaction level accession numbers cited inline. All prices as reported on the forms; weighted average price footnotes noted where applicable.

Risk Factors

Insiders bought at $271.17 to $320.80 in May 2025; the 10-K nine months later gives the medical cost factor behind the fall 400 of its 8,677 Item 1A words.

Source documents: FY2025 10-K Item 1A (0000731766-26-000062, filed 2026-03-02), FY2024 10-K Item 1A (0000731766-25-000063, filed 2025-02-27), Q1 2026 10-Q Part II Item 1A (0000731766-26-000127) and Q2 2026 10-Q Part II Item 1A (0000731766-26-000197). Both 10-Qs state verbatim: "There have been no material changes to the risk factors as disclosed in our 2025 10-K." The entire FY2026 risk narrative therefore rests on the 10-K filed 2026-03-02.

Inventory and diff summary

The word count is the tell. Item 1A grew only 111 words net while the new AI factor alone added 120 words and the privacy compliance factor shed (125) words. UnitedHealth relocated its AI disclosure rather than expanding it, then made 12 targeted edits that each convert a hypothetical risk into a realized one.

Full heading by heading diff

New: no counterpart heading in FY2024. Materially reworded: substance, scope or realization changed. Unchanged: editorial or figure updates only.

Risk factors by theme

Regulation and government programs consume 29.9% of Item 1A against a single 400 word factor for medical cost, the variable that actually broke FY2025 earnings. That asymmetry is the most striking feature of the disclosure.

Tying the disclosure to the financial reality

Realization language audit

The strongest signal in a risk factor diff is a change of tense. Five factors moved from conditional to realized in FY2025.

2026 interim updates

Two consecutive quarters of no change through 2026-06-30 means the 21 factor set stands as filed on 2026-03-02.

What the diff does not contain

Stock Price, Scenarios & Sensitivity

The filings fix FY2025 at an 89.15% medical care ratio and $18,964M of operating income; this chapter prices what a range of paths for that ratio is worth.

1. Price history

Five years of monthly closes, September 2021 through 31 August 2026.

Peak close $610.20 (Nov 2024) to trough close $249.56 (Jul 2025) is a (59.1%) drawdown; the latest close of $392.95 is +57.5% off that trough and still (35.6%) below the peak. Over the full five years the shares are +0.6%, so the entire FY2022 to FY2024 gain has been surrendered.

The drawdown is calendar aligned with the medical care ratio: 2025 fell (34.7%) in the year MCR went to 89.15%, and 2026 has recovered +19.0% to 31 August.

Price data: market data, monthly closing prices. No SEC-API.io figure appears in this section.

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2. The single driver that matters

Operating income under the FY2025 cost structure is a linear function of MCR: $447,567M revenue less $114,608M of other costs leaves $332,959M, less medical costs of MCR × $352,229M. Every scenario below is that identity run forward at the $3,522M per MCR point established in chapter 2.

The FY2025 collapse is almost entirely this arithmetic: FY2025 premiums at the FY2024 MCR would have cost $301,330M against $313,995M reported, and that $12,665M excess, attributed in the sector chapter, is 95.1% of the $13,323M operating income decline.

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3. Scenario architecture

Three paths, each built from six explicit drivers rather than an assumed EPS growth rate.

Anchors: FY2025 other costs were 25.61% of revenue, down from 25.93% (FY2024) and 26.20% (FY2023); premiums were 78.70% of revenue. Tax is normalised at 22.0% in all three paths because the FY2025 effective rate of 12.86% is not representative against 24.06% (FY2024) and 20.50% (FY2023). At 22.0% the reported FY2025 operating income yields $11.99 of EPS, not the $13.23 reported.

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4. Scenario outputs

All forward figures are scenario outputs, not forecasts of fact.

The FY2028E spread is $48,198M against $11,605M of operating income, a 4.2x range on revenue differing only 13.6%: the asymmetry is the MCR at work.

At $2,000M a year the buyback fails to cover roughly 6M shares of annual net issuance from equity compensation, so the worst case share count rises to 914M. The base case buyback of $5,000M a year contributes only $0.52 of EPS across three years, against $6.77 from MCR recovery alone.

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5. Critical factors driving the best case

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6. Core assumptions and what drives demand

Modelling assumptions. Premiums stay at 78.70% of revenue in the base case, matching FY2025. Tax is 22.0% across all paths. Noncontrolling interests run $760M to $840M against $751M in FY2025. Average repurchase price is assumed at $400, a scenario assumption, with 6M shares a year of net equity compensation issuance. The FY2025 loss on sale of subsidiaries of $(265)M is treated as nonrecurring and excluded.

Demand drivers, ranked by revenue weight.

Membership counts are not restated here because they are not in the verified anchor set; the segment revenue above is used as the demand proxy.

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7. Sensitivity

FY2027E outcomes across MCR and annual revenue growth, two years of compounding from FY2025 revenue of $447,567M. Fixed: premiums 78.70% of revenue, other costs 25.50%, interest $4,250M, tax 22.0%, NCI $790M, 898M diluted shares.

The grid's verdict. Moving 600bp of MCR (85.0% to 91.0%) changes FY2027E EPS by $20.63. Moving 600bp of annual revenue growth (3% to 9%) changes it by $2.59. MCR is 8.0x the lever that growth is. Each 50bp of MCR is worth about $1.72 of EPS at 6% growth.

FY2024 operating income of $32.3B is unreachable at any growth rate unless MCR is 86.5% or better; at 9% growth and 88.0% MCR it returns only $27.9B.

At the 31 August 2026 close of $392.95 the base case puts the shares on 19.8x FY2027E and 16.0x FY2028E. The best case implies 13.0x FY2027E; the worst case 82.7x. The gap between 13.0x and 82.7x is one variable, and on an 18x to 20x FY2027E multiple the close of $392.95 implies an MCR of 86.98% to 87.62%, so the market has roughly 150bp to 220bp of MCR recovery already priced in.

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Financial anchors: SEC-API.io. UNH FY2025 10-K (0000731766-26-000062), FY2024 10-K (0000731766-25-000063), FY2023 10-K (0000731766-24-000081).

Price and multiple inputs: market data, monthly closing prices through 31 August 2026.

All FY2026E, FY2027E and FY2028E figures here are scenario outputs of the model in section 3, not forecasts, guidance or company projections.

Filing data from SEC-API.io. Figures are as filed with the SEC; accession numbers are cited throughout. Share price history in the final section comes from market data and is not covered by the SEC-API.io credit. Forward looking figures are scenario outputs built from filed results, not forecasts of fact, and are not investment advice.