UnitedHealth(UNH) Forbes·2024-12-29 13:00Industry Overview - The top health insurers have maintained a medical care ratio (MCR) between 82% and 84% for the better part of the last decade [3] - The seven largest publicly traded health insurers are projected to have an annual MCR of nearly 86% for 2024 [10] - Rising medical loss ratios in 2024 were modestly offset by lower administrative ratios and stronger investment income due to higher market interest rates [8] - Business diversification among some health insurers in terms of insurance products, provider assets, and pharmacy benefit management operations continues to soften the impact of elevated healthcare utilization [8] Medicaid and Medicare Challenges - Medicaid margin pressure could persist into the first half of 2025, with concerns about inadequate rates paid per Medicaid beneficiary relative to the average costs of care [2] - Health insurers face challenges in government-funded businesses, including Medicaid coverage for poor Americans and Medicare Advantage benefits for Americans 65 and older [5] - Pricing pressures from state Medicaid programs come as health insurers see increased costs from Americans getting more care post-Covid-19 pandemic [6] - Weaker combined operating performance for the largest seven publicly traded health insurers in the first nine months of 2024 reflected continued increases in healthcare service utilization in the senior population and higher acuity in the remaining Medicaid population [7] UnitedHealth Group Specifics - UnitedHealth Group faces rising costs and tough negotiations with governments it works with to provide health benefits to elderly and poor Americans [1][9] - UnitedHealthcare's medical care ratio was 85.2% for the third quarter of 2024 compared to 82.3% last year [10] - Companies like UnitedHealth Group, Humana, and CVS Health have large and growing businesses that also provide medical care, which could blunt some of the impact of rising costs in their health insurance businesses [4]