UnitedHealth’s $4.3 Billion Quarter – Brought to You by Uncle Sam

Even as it lost thousands of customers in its commercial and Medicaid plans, UnitedHealth made billions in profits… thanks to a Medicare Advantage cash stream.

Despite losing tens of thousands of enrollees in its commercial and Medicaid health plans in the third quarter of this year, UnitedHealth still managed to make $4.3 billion in profits during those three months. Investors were initially impressed when the company reported its earnings yesterday morning, sending the share price up 4%. Later in the day, though, after looking more closely at all the numbers and hearing UnitedHealth’s executives talk about the various “headwinds” the company likely will continue to face for the rest of the year and beyond, the stock price dipped again and was down more than 2% at noon today.

UnitedHealth Group’s third quarter earnings statement for 2025.

In terms of revenues, the country’s biggest health care conglomerate took in more than $113 billion during the third quarter – a 12% increase over the third quarter of last year – primarily by hiking premiums that its individual and employer customers must pay and by collecting nearly $10 billion more from the federal Medicare program (a.k.a. taxpayers).

The company had 70,000 fewer people enrolled in its commercial and Medicaid health plans on September 30 than on June 30, but its Medicare Advantage plans added 85,000 seniors. Its total enrollment would have declined if not for MA.

In fact, if it were not for the incredible generosity of Uncle Sam, UnitedHealth would be a far, far smaller and less profitable company. Although it has 29.9 million people enrolled in its commercial plans – compared to 8.4 million in its Medicare Advantage plans – it gets way, way more money from the federal government to “cover” those MA enrollees than from its commercial customers. Of the 45.8 million people enrolled in all of UnitedHealth’s U.S. health plans, fewer than 20% are enrolled in its Medicare Advantage plans. But it’s that 20% that brings home the bacon.

Almost exactly half of the $86.2 billion in revenues collected by the company’s health plan division – UnitedHealthcare – came from the Medicare Trust Fund and seniors enrolled in its MA plans. Revenues from those 29.9 million commercial enrollees totaled $19 billion. That’s a tidy sum, no doubt about it. But it got more than twice that from the federal government – $43.4 billion to be exact – for those 8.4 million folks enrolled in UnitedHealthcare’s Medicare Advantage plans.

Let’s do some math here to help us see what’s going on and why the Medicare Advantage program is so lucrative for Big Insurance.

UnitedHealthcare got about $635 for each of those 29.9 million people enrolled in its commercial plans in the third quarter.

But it got $5,145 for each of those Medicare Advantage enrollees.

In just three months.

The government also is quite generous with its Medicaid dollars. UnitedHealthcare’s Medicaid enrollment was 7.5 million on September 30, down 30,000 from June 30 as many low-income Americans who were able to enroll in Medicare during the pandemic have lost those benefits now that COVID is largely behind us. To cover those 7.5 million people, federal and state governments paid UnitedHealthcare $23.8 million. That averages out to $3,173 for each Medicaid enrollee.

On a monthly basis then, during the third quarter, UnitedHealthcare collected approximately:

• $212 for each of its commercial health plan enrollees;

• $1,058 for each Medicaid enrollee; and

• $1,715 for each Medicare Advantage enrollee.

Now, admittedly, most of UnitedHealth’s commercial enrollees are in employer-sponsored plans, meaning that the company’s employer customers actually pay the lion’s share of the premiums for those folks; UnitedHealthcare administers those employer plans for a substantial fee. But many other people it puts in its commercial bucket are enrolled in ACA (Obamacare) marketplace plans. So in addition to the huge sums the company gets from taxpayers for its Medicare Advantage and Medicaid enrollees, it gets hundreds of millions more from the government in the form of subsidies that make its Obamacare plans reasonably affordable.

All in all, 78% of UnitedHealthcare’s health plan revenues now come from taxpayers. And that doesn’t include all the money it gets from the feds in the form of subsidies for people enrolled in Obamacare plans.

(A side note: UnitedHealth’s executives said on a call with investors yesterday that they expect a significant decline in Obamacare plan enrollment next year because of higher premiums and the possibility, if not the likelihood, that a big portion of those subsidies – put in place during the pandemic – will expire at the end of this year. Whether to extend those subsidies into the future is the reason why Democrats and Republicans are at odds and the government shutdown is in its 29th day. The company will undoubtedly also see its Medicaid enrollment continue to decline as a consequence of the deep cuts made to the program by the One Big Beautiful Bill Act Congress passed this summer.)

All in all, because of premium hikes and generous payments from the government, UnitedHealthcare’s 3Q 2025 revenues were 16% higher than they were in the same quarter last year. Investors liked that news, but weren’t thrilled that the company’s medical loss ratio was 89.9% during the third quarter, up from 85.2% in the same quarter last year. That means that the company has had to spend more of the premiums and tax dollars it has collected paying claims this year than last year.

UnitedHealth’s other big division, Optum – which encompasses the company’s big pharmacy benefit manager (Optum Rx) and hundreds of physician practices and other health care facilities it now owns – contributed $2.5 billion to the $4.3 billion in the parent company’s total operating profits while Unitedhealthcare contributed $1.8 billion. As we have reported, UnitedHealth has been on a buying spree of health care facilities in recent years. Most of UnitedHealth’s nearly 2,700 subsidiaries are engaged in health care delivery in one way or another.

Buying health care operations has enabled the company to self-deal in ways that are not permitted by law in banking, real estate and other industries. Increasingly, the health plan division is steering its enrollees to entities it owns or controls. During the third quarter, the percentage of the company’s total revenues categorized as “intercompany eliminations” increased to 28% from 27.4% in the third quarter of 2024. That essentially means that 28 cents of every premium and tax dollar UnitedHealthcare collects is spent paying one or more of Optum’s businesses. That is money that is not going to physician practices and facilities it doesn’t own, which makes it increasingly difficult for independent providers to stay independent.