TLDR:
- UnitedHealth reported a surge in third-quarter medical costs
- Medical loss ratio increased to 85.2% from 82.3% a year earlier
- Demand for healthcare services under Medicare plans exceeded expectations
- UnitedHealth’s adjusted profit beat Wall Street estimates
- The company reported revenue of $100.8 billion
UnitedHealth Group, one of the largest health insurers in the United States, released its third-quarter financial results on Tuesday, October 15, 2024.
The company reported a significant increase in medical costs, which overshadowed its strong revenue growth and led to a drop in its stock price.
The most notable aspect of UnitedHealth’s report was the surge in medical costs. The company’s medical loss ratio, which represents the percentage of premiums spent on medical care, rose to 85.2% in the third quarter.
This marks a substantial increase from 82.3% reported in the same period last year and exceeded analysts’ expectations of 84.2%, according to data compiled by LSEG.

Several factors contributed to the elevated medical costs. One key driver was the persistently high demand for healthcare services, particularly among Medicare plan members.
Since late last year, older adults have been undergoing medical procedures they had postponed during the COVID-19 pandemic, leading to higher-than-expected utilization of healthcare services.
Another factor impacting medical costs was the turnover in Medicaid enrollment. States have been reassessing Medicaid plan eligibility since April 2023, when a pandemic-era requirement to maintain consistent coverage lapsed. This reassessment process has resulted in many health insurers, including UnitedHealth, retaining a higher proportion of sick patients in their Medicaid programs, further driving up medical expenses.
Despite these challenges, UnitedHealth Group demonstrated resilience in other areas of its business. The company reported total revenue of $100.8 billion for the quarter, surpassing analyst estimates of $99.28 billion. This strong performance was driven by increased membership across various business segments, including its commercial health insurance offerings.
UnitedHealth’s adjusted profit also exceeded Wall Street expectations. The company reported adjusted earnings of $7.15 per share, beating analyst estimates by 15 cents. This positive result can be attributed to the company’s diversified business model, which includes both health insurance and healthcare services operations.
The company’s Optum division, which provides pharmacy benefits management and healthcare services, continued to be a strong performer. Optum’s revenues grew by more than $7 billion compared to the previous year, reaching $63.9 billion. This growth was primarily driven by Optum Health and Optum Rx, the company’s pharmacy benefit management business.
UnitedHealth Group also faced some unique challenges during the quarter. The company reported $475 million in total cyberattack impacts, stemming from an incident that affected its Change Healthcare subsidiary in February.
While significant, these costs were lower than in previous quarters, indicating that the company is making progress in addressing the aftermath of the attack.
Despite the mixed results, UnitedHealth Group maintains a positive outlook for the future. The company has seen growth in its commercial health insurance offerings, with 2.4 million new members added so far this year. UnitedHealth has also maintained its financial projections for the year, demonstrating confidence in its ability to navigate the current challenges.
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