Health Insurance Company Earnings: Q1 2025

Most US public health insurance companies reported their 2025 first-quarter earnings in late April and early May. Examining those reports provides a snapshot of the performance of some of the largest health plans.

Before we dig into each insurer’s results, here’s a look at some themes that ran through their public statements:

Increased Utilization

A prominent theme across many payers was the continued experience of elevated medical costs and utilization, particularly within Medicare Advantage (MA). UnitedHealth Group, the largest MA provider, explicitly cited a sharp increase in care activities in the senior businessas a primary reason for missing Wall Street estimates and lowering its full-year 2025 EPS guidance. The health insurance company noted this was particularly significant in physician and outpatient care.

Humana, another large MA player, stated that while they have struggled with rising medical costs previously, they were not as significantly impacted this quarter after exiting certain unprofitable plans and counties. They built a mid-single-digit medical cost trend into their guidance and noted trends largely consistent with expectations. Elevance Health also reported elevated medical costs in MA. However, the company described them as “manageable” and meeting their expectations and pricing approach. They noted that the rise in their overall medical loss ratio (MLR) was primarily due to Medicaid cost trends, unlike UnitedHealth Group, where MA was the main issue.

Medicare Advantage

The MA segment dynamics were a significant area of focus, encompassing utilization trends, payment rate changes (V28), and Star Ratings. Companies discussed how V28, phased in over three years, affect rates, with Humana noting a higher impact (about 160 basis points above the industry average) due to a greater share of members with high-performing value-based providers. Humana’s efforts to return to its 3% MA margin target are tied to the outcome of STARS litigation. CVS Health and Clover Health highlighted the positive impact of improved MA star ratings for the 2025 payment year on their Medicare performance. Clover Health noted they are moving from a 3.5 to a 4-star rating for the 2026 payment year, which affects the benchmark and factors into their bid discussions.

Medicaid

Another key theme was the situation in Medicaid, particularly regarding the ongoing redetermination process and the adequacy of state rates. While Medicaid redeterminations were mentioned as partly offsetting premium revenue growth for Molina Healthcare, the discussion often centered on state rates keeping pace with rising costs. Centene saw its Medicaid Health Benefits Ratio (HBR) increase due to factors like influenza-like illnesses and acuity pressure related to redeterminations that began in Q2 2024. They noted that about 40% of their Medicaid revenue received refreshed rates in Q1, contributing to underlying performance improvement, but discussions with states continue to reflect empirical evidence of acuity shifts.

Elevance Health experienced higher medical cost trends in Medicaid than the prior year, impacting their operating gain and MLR. However, the company reported that January and April rate renewals were in line with expectations and reflect progress towards covering cost trends. Molina Healthcare noted their Medicaid MCR was in line with expectations and that state rate models incorporated the impact of discrete cost categories such as LTSS, behavioral health, and high-cost drugs.

Seasonal Illness

The impact of seasonal illnesses, particularly flu or influenza-like illnesses (ILI), was noted by multiple companies as contributing to utilization and costs in the first quarter. Centene reported about $130 million in Q1 influenza-related costs above expectations in its Medicaid segment. Elevance Health saw a slight hike in utilization early in the quarter due to flu and other respiratory illnesses, which impacted their benefit expansion ratios by 15-20 basis points. Humana also noted a heavy flu season that started later than usual, but was anticipated in their guidance. Molina Healthcare estimated the impact of seasonal illness in Medicaid to be $10 million to $15 million higher than normal, and indicated it was included in their guidance.

Pharmacy Costs

Pharmacy costs, including high-cost drugs and the focus on GLP-1s and biosimilars, were discussed. Centene noted high utilization of specialty drugs in non-low-income Part D members was impacting their HBR. Molina Healthcare mentioned high-cost drugs, including GLP-1s, as a cost category impacting Medicaid rate discussions. Cigna highlighted the strong double-digit revenue growth in its Evernorth segment, which includes Pharmacy Benefit Services and Specialty and Care Services, and discussed tracking the adoption of biosimilars like Stelara. Humana saw volume growth in specialty pharmacy in its CenterWell segment. CVS Caremark, as part of CVS Health, made a formulary update to improve access to GLP-1 drugs.

Guidance Going Forward

Finally, the updates to full-year guidance reflected varied Q1 performance and expectations. Cigna and Clover Health raised their full-year adjusted EPS guidance based on strong starts to the year. CVS Health raised its Adjusted EPS guidance but lowered its GAAP EPS guidance, maintaining a cautious outlook on costs and potential macro headwinds. Humana reaffirmed its full-year adjusted EPS guidance, noting that its Q1 outperformance was partly due to the timing of expenses. UnitedHealth Group lowered its full-year EPS guidance due to the challenges faced in the first quarter, particularly within MA. Elevance Health reiterated its full-year adjusted EPS guidance.

In summary, the Q1 2025 earnings calls revealed an industry grappling with elevated medical costs, especially in MA, and navigating the complexities of Medicaid redeterminations and state rate negotiations. Seasonal illnesses had a noticeable impact, and pharmacy costs, including high-cost drugs, remained a key focus.

Despite these pressures, many companies reported strong revenue growth, highlighting the positive contributions from their diversified segments, such as care delivery and pharmacy services, leading to varied but generally positive outlooks for the remainder of the year and a mix of upward and downward revisions to full-year guidance.

Here’s a summary of each insurer’s earnings reports:

UnitedHealth Group

In the first quarter of 2025, UnitedHealth Group (UHG) reported strong growth across its businesses, with more people being served through their health benefits and services. However, their overall performance was described as “unusual and unacceptable.”

Here’s a summary of their key financial results:

• Revenues grew to $109.6 billion, an increase of $9.8 billion year-over-year.
• However, UHG missed Wall Street estimates on both revenue and earnings.
• Reported earnings were $6.85 per share, and adjusted earnings were $7.20 per share

Downgraded Outlook

Due to their Q1 performance, UHG revised its adjusted earnings per share outlook for 2025 to $26 to $26.50, down from the previous guidance of $29.50 to $30. The primary reasons for the revised outlook and the “unacceptable” performance were attributed to their Medicare businesses, specifically:

• Increased care activity in UnitedHealthcare’s MA business. Care activity increased at twice the rate planned for 2025, which was expected to be consistent with 2024 trends. The most notable increases were in physician and outpatient services. This issue was specific to their MA business and not seen in their commercial or Medicaid segments.
• Unanticipated changes in Optum Medicare membership. This impacted 2025 revenue due to a surprising lack of engagement in 2024 by new Medicare patients joining Optum Health, some of whom were covered by plans that exited markets. This resulted in lower-than-expected 2025 reimbursement levels that didn’t reflect their health status. Additionally, current and new complex patients were more affected by CMS risk model changes than anticipated. UHG acknowledged that they were not executing the model transition as well as they should.

Despite these challenges, UHG highlighted continued strong growth in several areas:

• UnitedHealthcare’s MA business is still on pace to serve an additional 800,000 people in 2025.
• Optum Health is on track to add 650,000 net new patients to value-based care arrangements in 2025, expecting to reach about 5.4 million by the end of the year.
• There was positive momentum in their Medicaid business regarding rates aligning with member health status.
• Commercial self-funded membership increased by approximately 700,000 in Q1.

UHG stated they are “aggressively addressing” the challenges in their Medicare businesses and believe they are “highly addressable” as they look ahead to the rest of 2025 and into 2026.

Elevance Health

Elevance Health reported its first quarter 2025 results on April 22, 2025. Overall, the company showed strong financial performance with growth in revenue and adjusted operating gain.

Here’s a summary of their Q1 2025 performance:

• Operating revenue was $48.8 billion, an increase of 15.4% compared to the first quarter of 2024 ($42.3 billion). This growth was driven by higher premium yields in the Health Benefits segment, acquisitions completed in the past year, growth in MA and Individual ACA membership, and CarelonRx product revenue, partially offset by Medicaid membership attrition.
• Adjusted operating gain was $3.3 billion, up 4.1% from $3.1 billion in 1Q 2024. Operating gain totaled $3.2 billion, up from $3.0 billion in the prior year quarter.
• Diluted EPS was $9.61, and adjusted diluted EPS was $11.97. This adjusted EPS beat Wall Street expectations.
• Elevance Health reaffirmed its FY 2025 adjusted diluted EPS guidance of $34.15 to $34.85.
• The company returned $1.3 billion of capital to shareholders in 1Q 2025 through share repurchases ($880 million) and dividends ($386 million).

Details

The health benefits unit experienced operating revenue of $41.4 billion. This represents an 11% increase year-over-year, driven by higher premium yields and growth in MA and Individual ACA membership. Operating gain totaled $2.2 billion, impacted by a higher medical cost trend in the Medicaid business, partially offset by premium rate increases and enhanced operating efficiencies. Medical membership totaled approximately 45.8 million as of March 31, 2025, an increase of 99,000 from year-end 2024, driven by growth in MA and Commercial risk-based members.

While Elevance Health noted ongoing elevated medical costs, particularly in MA, they stated that their overall results for the quarter were in line with their expectations and pricing approach. They also saw a slight hike in utilization in early Q1 due to flu and respiratory illnesses, which evened out over the quarter.

Elevance Health executives sought to ease concerns about elevated MA costs, stating they were “manageable” and in line with their anticipation.

CEO Gail Boudreaux emphasized the company’s purpose to improve the health of humanity and highlighted progress in reimagining the healthcare experience through personalized support, digital solutions, and a whole-health model. She noted the delivery of their strategy to be a lifetime trusted health partner and elevate health beyond healthcare.

Overall, Elevance Health presented a positive financial performance in Q1 2025, meeting or exceeding expectations in several key areas while acknowledging the industry-wide trend of elevated medical costs, particularly in MA.

Cigna

Overall, Cigna reported a strong start to 2025, exceeding earnings expectations and showing revenue growth across its key segments, driven by strong execution and strategic initiatives. The results led management to raise the full-year adjusted EPS guidance.

Here are the key details of Cigna’s performance in Q1 2025:

• Adjusted Earnings per Share (EPS): Cigna reported adjusted diluted earnings per share of $6.74. This result beat analysts’ expectations of $6.35.
• Total Revenues: Total revenues for the quarter increased 14% year-over-year to $65.5 billion.
• Cigna Healthcare Revenues: Adjusted revenues for the Cigna Healthcare segment were nearly $14.5 billion, which increased 9% relative to the first quarter of 2024. This increase primarily reflected premium rate increases aimed at covering expected increases in underlying medical costs.
• Evernorth Revenues: Evernorth revenues grew by double digits. Specifically, Pharmacy Benefit Services adjusted revenues increased 14%, and Specialty and Care Services adjusted revenues increased 19%.
• Adjusted Income from Operations: Consolidated adjusted income from operations for the first quarter of 2025 was $1.8 billion, or $6.74 per share, compared to $1.9 billion, or $6.47 per share, for the first quarter of 2024.

Segment Income

Evernorth pretax adjusted earnings were $544 million, up 4%. This reflected continued affordability improvements, partially offset by strategic investments.

Cigna Healthcare’s pretax adjusted earnings were $1.3 billion. This decreased by 4% relative to the first quarter of 2024, primarily due to a higher Medical Care Ratio (MCR), partially offset by a lower SG&A expense ratio.

Other Key Metrics

• MCR: The Cigna Healthcare MCR was 82.2% for the first quarter of 2025. This grew from 79.9% MCR in the first quarter of 2024. The increase was primarily driven by expected higher stop-loss medical costs. The later timing of the divestiture of the Medicare businesses also increased the first quarter MCR by approximately 100 basis points, as Medicare businesses typically operate at a higher MCR. Excluding this impact, the fundamental MCR was favorable to expectations.
• Medical Cost Trends: Management noted elevated trends consistent with their expectations in most categories, with some favorability in surgical activity and OB services. Stop-loss performance was tracking in line with expectations.
• Membership/Business Growth: The company saw strong growth in its Cigna Healthcare Select segment (under 500 customers), with customers growing 9% year over year. Evernorth saw strong specialty volume growth.
• Medicare Divestiture: Cigna completed the sale of its Medicare businesses (including MA and PDP) to HCSC on March 19, 2025. This transaction closed about a month later than planned.
• Capital Management: As of May 1, the company had repurchased 8.2 million shares of common stock for approximately $2.6 billion.
• Outlook: Based on the strong first-quarter results, Cigna raised its full-year 2025 adjusted earnings per share guidance to at least $29.60. They also increased the full-year pretax adjusted earnings outlook for Cigna Healthcare by $25 million to at least $4.125 billion. The company expects the full-year MCR to be within the range of 83.2% to 84.2%.

CVS Health

CVS Health Corporation on May 1 reported the following results for the first quarter ended March 31, 2025. The company experienced a year-over-year increase in revenue and EPS and increased full-year EPS guidance. Here’s a detailed look at the company’s 2025 first-quarter results:

• Total revenues increased to nearly $94.6 billion, up 7.0% compared to $88.437 billion in the prior year quarter (Q1 2024).
• GAAP diluted EPS was $1.41. This is an increase from $0.88 in the first quarter of 2024.
• Adjusted EPS was $2.25. This is an increase from $1.31 in the first quarter of 2024.
• The increase in GAAP diluted EPS and Adjusted EPS was primarily attributed to improved operating results in the Health Care Benefits segment. This reflects a favorable year-over-year impact of prior-year development and improved underlying performance in Medicare, including improved MA star ratings for the 2025 payment year.
• The company generated cash flow from operations of $4.6 billion.

Operational Highlights

• CVS Health plans to exit the individual exchange business.
• Aetna released new solutions aimed at easing the patient and provider experience.
• CVS Caremark made a formulary update intended to improve access to GLP-1 drugs.

Based on these Q1 results, CVS Health updated its full-year 2025 guidance:

• Revised GAAP diluted EPS guidance range to $4.23 to $4.43 from the previous range of $4.58 to $4.83.
• Raised adjusted EPS guidance range to $6.00 to $6.20 from the previous range of $5.75 to $6.00.
• Raised cash flow from operations guidance to approximately $7.0 billion from the previous estimate of nearly $6.5 billion.

The updated full-year guidance reflects strong performance across each of the businesses, while the company is maintaining a cautious view for the remainder of the year due to continued elevated cost trends and the potential for macro headwinds.

Humana

Humana reported stronger performance in Q1 of 2025, as noted by its stock rising 6.03% in premarket trading after the announcement. Key results include:

• Adjusted Earnings per Share (EPS): Humana reported an EPS of $11.58. This surpassed analysts’ expectations of $10.07, beating the forecast by 15%.
• Revenue: Total revenue for the quarter was $32.11 billion. This figure slightly missed the anticipated projection of $32.22 billion.

Management reaffirmed the health insurance company’s full-year adjusted EPS guidance of approximately $16.25. Jim Rechten, President and CEO, noted that the company came in ahead of plan for Q1, reaffirming the full-year guidance. Celeste Mele, CFO, reinforced that while early, it was a solid start to the year, and the underlying fundamentals were developing as expected.

The strong financial performance in Q1 2025 was attributed to strategic initiatives in the Medicare and Medicaid markets, as well as improvements in operational efficiencies. Expansion in these segments drove the performance. Some of the outperformance in the quarter was described as timing-related. The EPS outperformance was largely driven by a shift in the expected timing of certain expenses.

Management Commentary

Celeste Mele stated that about a third of the Q1 beat was driven by the CenterWell segment, predominantly by its Primary Care Organization (PCO) and pharmacy businesses. Some favorable results in CenterWell were timing-related administrative expenses, while others, such as favorable pharmacy drug mix and higher-than-expected patient growth in PCO, could be durable.

Regarding medical cost trends, Humana’s management indicated that trends across their business align with expectations. Their guidance contemplated mid-single-digit growth on the medical side and low double-digit growth on the pharmacy side, consistent with their experience. They noted seeing some dynamics that have been called out by others, such as higher trends in oncology, which were contemplated in their guidance. They had significant data through April, and nothing seen suggested trends outside of their guidance.

Humana expects its insurance segment benefit ratio for the full year to be between 90.1% and 90.5%.

Risks and challenges noted by the health insurance company include regulatory challenges, changes in healthcare policy, and rising medical and pharmacy costs. The timing of the STARS ruling litigation is uncertain. The V28 impact, related to changes in risk adjustment, is playing out as expected and was contemplated in their guidance.

Centene

Overall, Centene reported a strong first quarter for 2025, beating EPS expectations and showing significant year-over-year revenue growth driven by membership gains in Medicare PDP, Marketplace, and better-than-expected retention in MA. The company reaffirmed its full-year adjusted EPS guidance while increasing its revenue outlook.

Here are the key results for Centene Corporation in the first quarter of 2025:

• Adjusted Diluted Earnings per Share (EPS): Centene reported an Adjusted Diluted EPS of $2.90 for the first quarter of 2025. This beat analysts’ expectations of $2.52 and was up 28% from $2.26 in the first quarter of 2024.
• GAAP Diluted EPS: GAAP Diluted EPS was $2.63 for Q1 2025 compared to $2.16 in the first quarter of 2024.
• Total Revenues: Total revenues for the quarter were $46.62 billion. Premium and service revenues totaled $42.49 billion in Q1 2025. This represented a 17% year-over-year growth from $36.3 billion in the comparable period of 2024.
• Health Benefits Ratio (HBR): The consolidated HBR for the first quarter of 2025 was 87.5%, an increase from 87.1% in Q1 2024.
• Operating Cash Flow: The cash flow provided by operations was $1.51 billion for the first quarter of 2025. This was primarily driven by net earnings and increased medical claims liabilities, partially offset by a delay in premium payments from a state partner.

Segment Performance Highlights

• Medicaid: Medicaid membership was stable and in line with expectations. The Medicaid HBR, excluding excess influenza-related costs, was approximately 93%, showing some progress from Q4 2024.
• Medicare: MA and Medicare Part D (PDP) businesses outperformed membership expectations in the quarter. Retention in MA was stronger than anticipated. Medicare segment HBR was 86.3% in the quarter. The HBR is expected to follow an inverted slope line compared to 2024 due to the Inflation Reduction Act program changes, resulting in a lower HBR and higher earnings earlier in the year.
• Commercial (Marketplace): Commercial membership was strong in the quarter, with new enrollment and retention being better than anticipated. Q1 commercial segment HBR at 75.0% was higher than 73.3% last year, driven by 1.9 million new marketplace members in Q1. The company experienced slightly higher new member utilization than the previous year’s new members.

Management Commentary & Outlook

• CEO Sarah London said the company managed well while navigating a dynamic policy landscape. She noted that MA is performing in line with expectations regarding the path to breakeven in 2027. She also highlighted strong growth in the commercial segment.
• CFO Drew Asher described Q1 2025 as a “good start” and reiterated that they manage the business as a diversified portfolio.
• The company reiterated its full-year 2025 adjusted diluted EPS guidance floor of more than $7.25. They also reaffirmed the GAAP diluted EPS guidance floor of over $6.19.
• Centene increased its 2025 premium and service revenues guidance range by $6.0 billion to between $164.0 billion and $166.0 billion. This increase reflects $5.0 billion of additional Marketplace premium revenue due to enrollment outperformance and $1.0 billion of premium revenue from outperformance in MA member retention.

Molina

Molina Healthcare reported its first-quarter 2025 performance with adjusted earnings per share (EPS) of $6.08. This beat the Zacks Consensus Estimate of $5.86. The adjusted EPS also grew by 6.1% from the year-ago period.

Here’s a more detailed look at their Q1 2025 performance:

• Total revenues amounted to $11.15 billion, an increase of 12.2% yearly. This also marginally beat the consensus mark. Premium revenues were $10.63 billion, up 11.8% year over year. The improvement in premium revenues stemmed from contract wins, buyouts, rate hikes, and an expanding nationwide footprint, partly offset by Medicaid redeterminations.
• The consolidated MCR was 89.2%, higher than the 88.5% reported in the same quarter of the previous year and above the consensus mark of 88.5%. This increase was due to rising medical care costs.
• Adjusted net income decreased slightly by 0.3% year-over-year, to $333 million.
• Total membership as of March 31, 2025, was around 5.8 million, a 0.4% increase year over year, although this missed the Zacks Consensus Estimate. Molina experienced year-over-year increases in customers within its Medicare and Marketplace businesses.

Segment Results

In Medicaid, the MCR was 90.3%, which aligned with their expectations. Medical costs increased moderately due to continued utilization of LTSS, high-cost drugs, behavioral health services, and seasonal illnesses, largely offset by updates in the new rate cycle. Their full-year Medicaid MCR guidance remains unchanged at 89.9%.

In Medicare, the first quarter MCR was 88.3%, aligning with their expectations. Medical cost trends were as expected and adequately captured by rates and risk adjustment. They remain confident in their pricing and benefit adjustments for 2025.

In Marketplace, the first quarter MCR was 81.7%, higher than expected due to prior-year items related to final risk adjustment and membership reconciliations, as well as a higher new store MCR related to the Connecticut acquisition. Excluding these non-recurring items, the normalized MCR was approximately 77.7%. They are increasing their full-year Marketplace MCR guidance from 79% to 80% to reflect these unfavorable non-recurring impacts.

Molina Healthcare reaffirmed its 2025 guidance, expecting premium revenues to be around $42 billion (approximately a 9% increase from 2024) and adjusted EPS of at least $24.50 (roughly an 8% increase from 2024).

Overall, Molina Healthcare’s Q1 2025 results showed growth in revenue and EPS, beating estimates. However, the consolidated MCR increased due to higher medical costs, particularly in Medicaid, with some non-recurring impacts in the Marketplace segment. The company reaffirmed its full-year guidance, indicating continued confidence in its performance.

Oscar

Oscar Health reported strong financial results for the first quarter ended March 31, 2025. The health insurance company achieved total revenue of approximately $3.0 billion, marking a 42% increase year-over-year and exceeding Wall Street’s forecast.

This significant revenue growth was primarily attributed to a 41% year-over-year increase in membership, reaching approximately 2.0 million members by the end of the quarter.

Oscar Health also showed meaningful improvement in profitability metrics.

• GAAP Net income attributable to Oscar Health, Inc. was $275.3 million, a substantial improvement of $98 million compared to the first quarter of 2024.
• The company reported $0.92 of diluted earnings per share, surpassing the forecast of $0.81.
• Adjusted EBITDA reached $328.8 million, improving by approximately $110 million year-over-year.
• Earnings from operations grew by $112 million year-over-year to $297.1 million, with the operating margin increasing by 110 basis points to 9.8%.

Regarding cost metrics, the MLR was 75.4% for the quarter, an increase of 120 basis points from the prior year. This increase was primarily driven by a 2024 risk adjustment true-up and higher inpatient utilization, although these were partially offset by favorable pharmacy costs.

Management Commentary

CEO Mark Bertolini stated that the results demonstrated the strength of their strategic plan and positioned the company for meaningful margin expansion. CFO Scott Blackley highlighted the role of technology in driving performance.

Following these results, Oscar Health reaffirmed its full-year 2025 guidance across all metrics. The market reacted positively, with the health insurance company’s stock experiencing a notable surge in premarket trading after the announcement.

Clover Health

Clover Health Investments, Corp., which primarily offers MA plans, reported strong financial results for the first quarter ended March 31, 2025.

Key results for Q1 2025 include:

• Total revenues of $462 million, representing a 33% increase year-over-year. Premiums earned, net, were $456.9 million.
• MA membership grew 30% year-over-year to 103,418 members as of March 31, 2025.

The health insurance company also showed meaningful improvement across profitability metrics:

• GAAP Net loss was $1 million, an improvement from a $19 million GAAP Net loss a year ago, or an $18 million year-over-year improvement. The GAAP net loss from continuing operations was $1.27 million.
• Adjusted EBITDA was $26 million, up 279% year-over-year.
• Adjusted Net income was $25 million, up 322% year-over-year

MA medical costs were in line with expectations. The Insurance medical loss ratio for the first quarter was 86.1%, a modest increase year-over-year but in line with expectations and consistent with full-year guidance.

Management Commentary

Clover Health’s CEO, Andrew Toy, commented that the team delivered a strong start to the year. The results demonstrate the company’s ability to meaningfully grow membership and expand profitability. CFO Peter Kuipers stated they were very pleased with the strong first quarter performance, executing well against their strategy, and that results and strong underlying business fundamentals reinforce their conviction in 2025.

Based on the strong Q1 results, Clover Health improved its full-year 2025 guidance, raising the Adjusted EBITDA and Adjusted Net income profitability guidance to $50 million to $70 million from the previous range of $45 to $70 million.

 

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