UnitedHealth’s Medical Membership Rises: Can It Maintain the Momentum?

UnitedHealth Group Inc
UNH is
witnessing robust growth in its medical membership, reflecting a
strong demand for both commercial and government-supported health
plans. In 2023, the company served 47.2 million people in the
United States, which increased 5% year over year in 2024, followed
by 2% growth in the first quarter of 2025 to 50.1 million. As of
March 31, 2025, UnitedHealthcare served around 780,000
consumers.

One of the major driving factors of this growth is
UnitedHealth's vertically integrated strategy. This strategy brings
together its insurance unit, UnitedHealthcare, with its care
delivery and pharmacy services through the Optum unit. By providing
coordinated, value-based care, the company has been able to attract
both seniors and those enrolled in employer-sponsored plans.

However, UNH had to suspend its full-year guidance due to
unexpectedly high medical costs in the Medicare Advantage segment
in the first quarter of 2025. The return of its new CEO, Steve
Hemsley, indicates a strong focus on operations, improved pricing,
adjusted risk and improved care coordination.

Membership numbers are on the rise, but to keep that
sustainable, it will require careful planning and tighter control
over costs. With the 2026 Centers for Medicare & Medicaid
Services (CMS) rate increase on the way and a changing competitive
environment, the company has to find a way to balance between
growing and staying profitable.

How are Competitors Faring?

Some of UNH's major competitors in the healthcare plan provider
space are
Humana Inc.
HUM and
Elevance Health, Inc.
ELV.

Humana's total medical membership of the insurance segment
declined 8.3% year over year in the first quarter of 2025 to 14.8
million. Humana anticipates Individual Medicare Advantage
membership to witness a decline of around 550,000 in 2025. Its
rising costs are concerning.

Elevance Health's total medical membership witnessed a decline
of 0.5% year over year in the first quarter of 2025 to 45.8
million. Elevance Health forecast medical enrollment between 45.8
and 46.7 million in 2025. Its rising costs are concerning.

UnitedHealth's Price Performance, Valuation &
Estimates

Shares of UNH have declined 39.3% in the year-to-date period
compared with the

industry's fall of 29.2%.

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Source: Zacks Investment Research

From a valuation standpoint, UnitedHealth trades at a forward
price-to-earnings ratio of 12.58, above the industry average of
11.58. UNH carries a

Value Score of B.

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Source: Zacks Investment Research

The Zacks Consensus Estimate for UnitedHealth's 2025 earnings
implies an 18.7% drop from the year-ago period's actual.

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Source: Zacks Investment Research

The stock currently carries a Zacks Rank #5 (Strong Sell).

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UnitedHealth Group Incorporated (UNH): Free Stock Analysis
Report

Humana Inc. (HUM): Free Stock Analysis Report

Elevance Health, Inc. (ELV): Free Stock Analysis Report

This article originally published on Zacks Investment Research
(zacks.com).

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