UnitedHealth Group Inc.

03/02/2026 | Press release | Distributed by Public on 03/02/2026 05:10

Annual Report for Fiscal Year Ending 12/31, 2025 (Form 10-K)

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion should be read together with the accompanying Consolidated Financial Statements and Notes to the Consolidated Financial Statements thereto included in Part II Item 8, "Financial Statements and Supplementary Data." Readers are cautioned the statements, estimates, projections or outlook contained in this report, including discussions regarding financial prospects, economic conditions, trends and uncertainties contained in this Item 7, may constitute forward-looking statements within the meaning of the PSLRA. These forward-looking statements involve risks and uncertainties which may cause our actual results to differ materially from the expectations expressed or implied in the forward-looking statements. A description of some of the risks and uncertainties can be found further below in this Item 7 and in Part I, Item 1A, "Risk Factors."
Discussions of year-over-year comparisons between 2024 and 2023 are not included in this Form 10-K and can be found in Part II, Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations" of the Company's Form 10-K for the fiscal year ended December 31, 2024.
EXECUTIVE OVERVIEW
General
UnitedHealth Group is a health care and well-being company with a mission to help people live healthier lives and help make the health system work better for everyone. Our two distinct, yet complementary businesses - Optum and UnitedHealthcare - are working to help build a modern, high-performing health system through improved access, affordability, outcomes and experiences for the individuals and organizations we are privileged to serve.
We have four reportable segments across our two businesses:
•Optum Health;
•Optum Insight;
•Optum Rx; and
•UnitedHealthcare, which includes UnitedHealthcare Employer & Individual, UnitedHealthcare Medicare & Retirement and UnitedHealthcare Community & State.
Further information on our business and reportable segments is presented in Part I, Item 1, "Business"and inNote 15 of the Notes to the Consolidated Financial Statements included in Part II, Item 8, "Financial Statements and Supplementary Data."
2026 Business Realignment
On January 1, 2026, we realigned certain of our businesses to respond to changes in the markets we serve and the opportunities that are emerging as the health system evolves. Optum Financial, including Optum Bank, which was historically included in Optum Health, will now be included in Optum Insight. Our reportable segments will remain unchanged, with prior period segment financial information being recast to conform to the 2026 presentation, beginning with our Quarterly Report of Form 10-Q for the three months ended March 31, 2026 filed with the SEC.
Net Portfolio Divestitures, Restructuring and Other Actions and Direct Response Costs - Cyberattack
Net Portfolio Divestitures
In the fourth quarter of 2025, the Company took various actions as a result of a strategic review of the Company's assets and businesses to operationally advance and scale core businesses and initiatives, including the value-based care business at Optum Health. These actions primarily include losses on business exits and dispositions and other businesses held for sale and a gain on the deconsolidation of a business. As a result of the Company's portfolio actions, the Company recorded a net gain of $568 million, which included a net gain of $1.5 billion at Optum Rx, partially offset by losses of $821 million and $68 million at Optum Health and Optum Insight, respectively. Gains and losses on portfolio actions were recorded within operating costs on the Consolidated Statements of Operations.
Restructuring and Other Actions
Additionally, in the fourth quarter of 2025 the Company took restructuring and other actions that resulted in a total impact of $2.5 billion, which included real estate rationalization and workforce reductions of $746 million, contractual reassessments of $573 million, the establishment a loss contract reserve related to anticipated future losses in 2026 for certain value-based care businesses of $623 million, net valuation losses on equity securities of $329 million and the advance funding of the United Health Foundation of $250 million. The $2.5 billion impact of the restructuring and other actions was a reduction to premium revenue of $122 million and investment and other income of $397 million, and increased medical costs $623 million and operating costs $1.4 billion on the Consolidated Statements of Operations. The impacts by reportable segment were $153
million, $1.7 billion, $236 million and $389 million, for UnitedHealthcare, Optum Health, Optum Insight and Optum Rx, respectively.
The net impact on 2026 cash flows as a result of the restructuring actions taken in 2025 is not expected to be material, with accruals recorded in 2025 resulting in operating cash outflows, offset by investing cash inflows related sales of businesses that are held for sale.
Direct Response Costs - Cyberattack
To support care providers impacted by the Change Healthcare cyberattack that occurred on February 21, 2024, the Company provided interest-free loans. In the fourth quarter of 2025, the Company increased its reserves for net collection expectations associated with provider loans and other customer balances of $799 million, which were recorded within operating costs on the Consolidated Statements of Operations and related to Optum Insight.
Business Trends
Our businesses participate primarily in the United States health markets. In the United States, health care spending has grown consistently for many years and accounted for 19% of gross domestic product (GDP) in 2025. We expect overall spending on health care to continue to grow in the future, due to inflation, medical technology and pharmaceutical advancement, regulatory requirements, demographic trends in the population and national interest in health and well-being. The rate of market growth may be affected by a variety of factors, including macroeconomic conditions and regulatory changes, which could impact our results of operations, including our continued efforts to control health care costs.
Pricing Trends.To price our health care benefits, products and services, we start with our view of expected future costs, including medical care patterns, the mix and health status of people served, inflation and labor market dynamics. For 2025, our pricing trends and patient and member health status assumptions were well-short of the medical cost trends incurred, significantly impacting our earnings. We continually evaluate and adjust our approach in each of the local markets we serve, considering relevant factors, such as product positioning, price competitiveness and environmental, competitive, legislative and regulatory considerations, including minimum medical loss ratio (MLR) thresholds and similar revenue adjustments. We seek to balance growth and profitability across all these dimensions.
The commercial risk market remains highly competitive in the small group, large group and individual segments. We expect broad-based competition to continue as the industry adapts to individual and employer needs. Continued increased medical costs may impact both future pricing and benefit design, including for our individual exchange products in markets where we choose to remain, and may result in shifts between product categories for our employer benefits. These potential changes, along with certain regulatory impacts, may result in decreased membership in future periods.
Medicare Advantage funding continues to be pressured, as discussed below in "Regulatory Trends and Uncertainties"and we have observed increased care patterns as discussed below in "Medical Cost Trends", which is contemplated in our 2026 benefit design approach. As a result of continued funding pressures, which have resulted in benefit and pricing actions, we expect that our Medicare Advantage membership will contract in 2026.
Optum Health's fully accountable value-based care businesses have been impacted by Medicare funding reductions and have also seen continued medical cost trend pressures, which may impact future pricing in the markets we continue to participate in. As a result of increased pricing in response to anticipated care patterns in 2026 and decreased people served through UnitedHealthcare Medicare Advantage offerings, we expect the number of people served under value-based care arrangements to contract.
Due to elevated care activity in Medicaid, specifically related to behavioral, pharmacy and home health, there continues to be a timing mismatch between the health status of people served and state rate updates. The funding and payment rate environment remains insufficient to meet the health needs of patients and creates the risk of continued downward pressure on Medicaid margin percentages. We continue to take a prudent, market-sustainable posture for both new business and maintenance of existing relationships. We continue to advocate for actuarially sound rates commensurate with our medical cost trends and we remain dedicated to partnering with those states that are committed to the long-term viability of their programs. We expect Medicaid membership losses in 2026 as a result of reduced Medicaid eligibility and the exit from one state.
Medical Cost Trends. Our medical cost trends primarily relate to changes in unit costs, care activity and prescription drug costs. We have observed increased care patterns that are above what we expected and contemplated in our pricing and benefits design. We have also observed an increase in health care unit costs and in the intensity of services delivered, driven by increases in provider pricing and additional services bundled per visit. Additionally, the member profile of newly added patients under value-based care arrangements, additional people served by our Medicare Advantage plans in markets where other plans exited, and people served within our individual exchange business have contributed to increased medical costs. These trends may continue in future periods.
The Inflation Reduction Act (IRA) altered the Medicare Part D model and benefits, shifting more risk to plans, which results in both increased premiums and medical costs. The IRA also changed the quarterly relationship of medical costs to premiums, altering the seasonal progression and creating a more consistent relationship between medical costs and premiums throughout the year.
We endeavor to mitigate medical cost increases by engaging hospitals, physicians and consumers with information and helping them make clinically sound choices, with the objective of helping them achieve high-quality, affordable care. Additionally, we have elevated our audit, clinical policy and payment integrity tools to protect customers and patients from unnecessary costs.
Delivery System and Payment Modernization.The health care market continues to change based on demographic shifts, new regulations, political forces and both payer and patient expectations. Health plans and care providers are being called upon to work together to close gaps in care and improve overall care quality and patient experience, improve the health of populations and reduce costs. We are working to accelerate realization of these benefits through the innovation and integration of our care delivery models, including in-clinic, in-home, behavioral and virtual care, and by using our data, analytics and AI to provide clinicians with the information necessary to provide the best possible care in the most cost-efficient setting. We continue to see a greater number of people enrolled in fully accountable value-based plans that reward high-quality, affordable care and foster collaboration.
This trend is creating needs for health management services that can coordinate care around the primary care physician, including new primary care channels, and for investments in new clinical and administrative information and management systems, which we believe provide growth opportunities for our Optum business platform. A key focus of our future growth is to accelerate the transition from fee-for-service care delivery and payment models to fully accountable value-based care. This transition requires initial costs such as system enhancements, integrated care coordination technology, physician training and clinical engagement. Enhanced clinical engagement is a critical step to improving the experience and health outcomes of the people we serve and should result in lower costs to the overall health system over time.
Regulatory Trends and Uncertainties
Following is a summary of management's view of the trends and uncertainties related to regulatory matters. For additional information regarding regulatory trends and uncertainties, see Part I, Item 1 "Business - Government Regulation"and Item 1A, "Risk Factors."
Medicare Advantage Rates. Medicare Advantage rate notices for numerous years have resulted in industry base rates well below the industry forward medical cost trend. While the Final Notice for 2026 approached the expected industry forward medical cost trend, the Advanced Notice for 2027 is far below. Additionally, increased medical costs in 2025, which are expected to continue in future periods, have added to the compounding impact of the previous multi-year rate shortfalls creating sustained pressure on the Medicare Advantage program. Further, substantial revisions to the risk adjustment model, which serves to adjust rates to reflect a patient's health status and care resource needs, have resulted and will continue to result in reduced funding and potentially benefits for people, especially those with some of the greatest health and social challenges.
As a result of ongoing Medicare funding pressures, there are adjustments we can make to partially offset these rate pressures and reductions for a particular period. For example, we can seek to intensify our medical and operating cost management, make changes to the size and composition of our care provider networks, adjust member benefits and implement or increase the member premiums supplementing the monthly payments we receive from the government. Additionally, we decide annually on a county-by-county basis where we will offer Medicare Advantage plans.
SELECTED OPERATING PERFORMANCE ITEMS
The following summarizes select 2025 year-over-year operating comparisons to 2024 and other financial results.
•Consolidated revenues grew 12%, UnitedHealthcare revenues grew 16% and Optum revenues grew 7%.
•UnitedHealthcare served 415,000 more people domestically, driven by growth in fee-based commercial offerings and Medicare Advantage, partially offset by risk-based commercial offerings.
•Earnings from operations of $19.0 billion compared to $32.3 billion last year, impacted by elevated medical cost trend, restructuring and other actions, gains related to business portfolio refinement in 2024, partially offset by net portfolio divestitures in 2025 and decreased impacts related to the Change Healthcare cyberattack.
•Diluted earnings per common share was $13.23.
•Cash flows from operations were $19.7 billion.
RESULTS SUMMARY
The following table summarizes our consolidated results of operations and other financial information:
(in millions, except percentages and per share data) For the Years Ended December 31, Change
2025 2024 2023 2025 vs. 2024
Revenues:
Premiums $ 352,229 $ 308,810 $ 290,827 $ 43,419 14 %
Products 53,380 50,226 42,583 3,154 6
Services 38,038 36,040 34,123 1,998 6
Investment and other income 3,920 5,202 4,089 (1,282) (25)
Total revenues 447,567 400,278 371,622 47,289 12
Operating costs:
Medical costs 313,995 264,185 241,894 49,810 19
Operating costs 59,592 53,013 54,628 6,579 12
Cost of products sold 50,655 46,694 38,770 3,961 8
Depreciation and amortization 4,361 4,099 3,972 262 6
Total operating costs 428,603 367,991 339,264 60,612 16
Earnings from operations 18,964 32,287 32,358 (13,323) (41)
Interest expense (4,002) (3,906) (3,246) (96) 2
Loss on sale of subsidiary and subsidiaries held for sale (265) (8,310) - 8,045 (97)
Earnings before income taxes 14,697 20,071 29,112 (5,374) (27)
Provision for income taxes (1,890) (4,829) (5,968) 2,939 (61)
Net earnings 12,807 15,242 23,144 (2,435) (16)
Earnings attributable to noncontrolling interests (751) (837) (763) 86 (10)
Net earnings attributable to UnitedHealth Group common shareholders $ 12,056 $ 14,405 $ 22,381 $ (2,349) (16) %
Diluted earnings per share attributable to UnitedHealth Group common shareholders $ 13.23 $ 15.51 $ 23.86 $ (2.28) (15) %
Medical care ratio (a) 89.1 % 85.5 % 83.2 % 3.6 %
Operating cost ratio 13.3 13.2 14.7 0.1
Operating margin 4.2 8.1 8.7 (3.9)
Tax rate 12.9 24.1 20.5 (11.2)
Net earnings margin (b) 2.7 3.6 6.0 (0.9)
Return on equity (c) 12.8 % 15.9 % 27.0 % (3.1) %
________
(a)Medical care ratio (MCR) is calculated as medical costs divided by premium revenue.
(b)Net earnings margin attributable to UnitedHealth Group common shareholders.
(c)Return on equity is calculated as net earnings attributable to UnitedHealth Group common shareholders divided by average shareholders' equity. Average shareholders' equity is calculated using the shareholders' equity balance at the end of the preceding year and the shareholders' equity balances at the end of each of the four quarters of the year presented.
2025 RESULTS OF OPERATIONS COMPARED TO 2024 RESULTS OF OPERATIONS
Consolidated Financial Results
Revenues
The increases in revenues were primarily driven by growth in people served through Medicare Advantage and those with higher acuity needs within Medicaid, growth at Optum Rx and pricing trends.
Medical Costs and MCR
Medical costs increased primarily due to the IRA-driven impacts on Medicare Part D plans, elevated medical cost trend and growth in people served through Medicare Advantage and those with higher acuity needs. The MCR increased as a result of the revenue effects of the Medicare funding reductions, elevated medical cost trend, the member profile of newly added patients under value-based care arrangements, the acceleration of anticipated future losses in 2026 related to certain Optum Health value-based care contracts, decreased favorable development, the impacts of the IRA on Medicare Part D and the impacts of market morbidity changes on our individual exchange offerings, partially offset by the incremental medical costs for accommodations made to care providers in 2024 as a result of the Change Healthcare cyberattack.
Operating Cost Ratio
The operating cost ratio increased due to gains related to business portfolio refinement in 2024; investments to support future growth and the impacts of restructuring and other actions; partially offset by the revenue impacts of government programs, including the IRA-driven impacts on Medicare Part D plans; operating cost management; net portfolio divestitures in 2025 and decreased impacts related to the Change Healthcare cyberattack.
Taxes
The effective income tax rate decreased due to tax benefits having significantly more impact due to lower pre-tax income in 2025, impacts of net portfolio divestitures, and due to non-deductible losses on the sale of subsidiary and subsidiaries held for sale in 2024. While the effective tax rate decreased due to the factors above, total domestic premium, payroll and other taxes incurred increased primarily due to increased premiums and wages. These taxes are recorded within operating costs on the Consolidated Statements of Operations.
Reportable Segments
See Note 15 of Notes to the Consolidated Financial Statements included in Part II, Item 8, "Financial Statements and Supplementary Data"for more information on our segments. We utilize various metrics to evaluate and manage our reportable segments, including individuals served by UnitedHealthcare by major market segment and funding arrangement, people served by Optum Health and adjusted scripts for Optum Rx. These metrics are the main drivers of revenue, earnings and cash flows at each business. The metrics also allow management and investors to evaluate and understand business mix, including the level and scope of services provided to people and pricing trends when comparing the metrics to revenue by segment.
The following table presents a summary of the reportable segment financial information:
For the Years Ended December 31, Change
(in millions, except percentages) 2025 2024 2023 2025 vs. 2024
Revenues
UnitedHealthcare $ 344,903 $ 298,208 $ 281,360 $ 46,695 16 %
Optum Health 101,957 105,358 95,319 (3,401) (3)
Optum Insight 19,417 18,757 18,932 660 4
Optum Rx 154,726 133,231 116,087 21,495 16
Optum eliminations (5,480) (4,389) (3,703) (1,091) 25
Optum
270,620 252,957 226,635 17,663 7
Eliminations (167,956) (150,887) (136,373) (17,069) 11
Consolidated revenues $ 447,567 $ 400,278 $ 371,622 $ 47,289 12 %
Earnings from operations
UnitedHealthcare $ 9,425 $ 15,584 $ 16,415 $ (6,159) (40) %
Optum Health (278) 7,770 6,560 (8,048) (104)
Optum Insight 2,624 3,097 4,268 (473) (15)
Optum Rx 7,193 5,836 5,115 1,357 23
Optum
9,539 16,703 15,943 (7,164) (43)
Consolidated earnings from operations
$ 18,964 $ 32,287 $ 32,358 $ (13,323) (41) %
Operating margin
UnitedHealthcare 2.7 % 5.2 % 5.8 % (2.5) %
Optum Health (0.3) 7.4 6.9 (7.7)
Optum Insight 13.5 16.5 22.5 (3.0)
Optum Rx 4.6 4.4 4.4 0.2
Optum
3.5 6.6 7.0 (3.1)
Consolidated operating margin 4.2 % 8.1 % 8.7 % (3.9) %
UnitedHealthcare
The following table summarizes UnitedHealthcare revenues by business:
For the Years Ended December 31, Change
(in millions, except percentages) 2025 2024 2023 2025 vs. 2024
UnitedHealthcare Employer & Individual - Domestic $ 75,940 $ 74,489 $ 67,187 $ 1,451 2 %
UnitedHealthcare Employer & Individual - Global 3,288 3,667 9,307 (379) (10) %
UnitedHealthcare Employer & Individual - Total 79,228 78,156 76,494 1,072 1 %
UnitedHealthcare Medicare & Retirement
171,285 139,482 129,862 31,803 23 %
UnitedHealthcare Community & State
94,390 80,570 75,004 13,820 17 %
Total UnitedHealthcare revenues $ 344,903 $ 298,208 $ 281,360 $ 46,695 16 %
The following table summarizes the number of individuals served by our UnitedHealthcare businesses, by major market segment and funding arrangement:
December 31, Change
(in thousands, except percentages) 2025 2024 2023 2025 vs. 2024
Commercial:
Risk-based 8,165 8,845 8,115 (680) (8) %
Fee-based 21,485 20,885 19,200 600 3
Total commercial 29,650 29,730 27,315 (80) -
Medicare Advantage 8,445 7,845 7,695 600 8
Medicaid 7,380 7,435 7,845 (55) (1)
Medicare Supplement (Standardized) 4,285 4,335 4,355 (50) (1)
Total Community and Senior 20,110 19,615 19,895 495 3
Total UnitedHealthcare - Medical 49,760 49,345 47,210 415 1
Supplemental Data:
Medicare Part D stand-alone 2,770 3,050 3,315 (280) (9) %
South American businesses held for sale 1,160 1,330 5,540 (170) (13) %
UnitedHealthcare's revenues increased due to the IRA-driven impacts on Medicare Part D plans and growth in the number of people served through Medicare Advantage, fee-based commercial offerings, those with higher acuity needs and Medicaid rates, partially offset by a decrease in people served through risk-based commercial offerings and Medicaid offerings.
Earnings from operations decreased primarily due to the impacts of Medicare Advantage funding reductions, elevated medical cost trend, gains related to business portfolio refinement in 2024, the impacts of market morbidity changes on our individual exchange offerings, other write-offs and settlements, and restructuring and other actions, partially offset by the incremental medical costs for accommodations to support care providers in 2024 as a result of the Change Healthcare cyberattack.
Optum
Total revenues increased primarily due to growth at Optum Rx, partially offset by Optum Health. Earnings from operations decreased due to Optum Health and Optum Insight, partially offset by Optum Rx. The results by segment were as follows:
Optum Health
Revenues at Optum Health decreased primarily due to the conversion of risk-based contracts to fee-based, Medicare Advantage funding reductions and the profile of members served, partially offset by growth in patients served under value-based arrangements. Earnings from operations decreased due to Medicare Advantage funding reductions; elevated medical cost trends; the member profile of newly added patients under value-based care arrangements; the impacts of restructuring and other actions, including the establishment a loss contract reserve related to anticipated future losses in 2026 for certain value-based care businesses; gains on dispositions in 2024; impacts of net portfolio divestitures in 2025; and reduced investment income; partially offset by cost management initiatives and incremental medical costs for accommodations to support care providers in 2024 as a result of the Change Healthcare cyberattack. Optum Health served approximately 95 million people as of December 31, 2025 compared to 100 million people as of December 31, 2024.
Optum Insight
Revenues increased due to decreased impacts related to the Change Healthcare cyberattack and growth in technology services, partially offset by lower volumes within business services. Earnings from operations decreased due to gains related to business portfolio refinement in 2024, lower volumes within business services and the impacts of restructuring and other actions, partially offset by decreased impacts related to the Change Healthcare cyberattack.
Optum Rx
Revenues at Optum Rx increased due to higher script volumes from both new clients and growth in existing clients and growth in pharmacy services. Earnings from operations increased due to the impacts of net portfolio divestitures, including a gain recognized on the deconsolidation of a business, and the factors impacting revenue, partially offset by restructuring and other actions and decreased investment income. Optum Rx fulfilled 1,659 million and 1,623 million adjusted scripts in 2025 and 2024, respectively.
LIQUIDITY, FINANCIAL CONDITION AND CAPITAL RESOURCES
Liquidity
Introduction
We manage our liquidity and financial position in the context of our overall business strategy. We continually forecast and manage our cash, investments, working capital balances and capital structure to meet the short-term and long-term obligations of our businesses while seeking to maintain liquidity and financial flexibility. Cash flows generated from operating activities are principally derived from earnings before noncash expenses.
Our regulated subsidiaries generate significant cash flows from operations and are subject to, among other things, minimum levels of statutory capital, as defined by their respective jurisdictions, and restrictions on the timing and amount of dividends paid to their parent companies.
Our U.S. regulated subsidiaries received capital infusions, net of dividends, of $535 million and paid their parent companies dividends, net of capital infusions, of $9.2 billion in 2025 and 2024, respectively. See Note 10 of the Notes to the Consolidated Financial Statements included in Part II, Item 8, "Financial Statements and Supplementary Data"for further detail concerning our regulated subsidiary dividends.
Our nonregulated businesses also generate significant cash flows from operations available for general corporate use. Cash flows generated by these entities, combined with dividends from our regulated entities and financing through the issuance of long-term debt as well as issuance of commercial paper or the ability to draw under our committed credit facilities, further strengthen our operating and financial flexibility. We use these cash flows to expand our businesses through acquisitions, reinvest in our businesses through capital expenditures, repay debt and return capital to our shareholders through dividends and repurchases of our common stock.
Summary of our Major Sources and Uses of Cash and Cash Equivalents
For the Years Ended December 31, Change
(in millions) 2025 2024 2023 2025 vs. 2024
Sources of cash:
Cash provided by operating activities $ 19,697 $ 24,204 $ 29,068 $ (4,507)
Issuances of long-term debt and short-term borrowings, net of repayments 726 14,660 4,280 (13,934)
Proceeds from common share issuances
827 1,846 1,353 (1,019)
Cash received for dispositions 561 2,041 685 (1,480)
Sales and maturities of investments, net of purchases 361 525 - (164)
Repayments of care provider loans - cyberattack 1,680 4,514 - (2,834)
Customer funds administered 366 - - 366
Other 63 - - 63
Total sources of cash 24,281 47,790 35,386 (23,509)
Uses of cash:
Cash paid for acquisitions and other transactions, net of cash assumed (4,509) (13,408) (10,136) 8,899
Common share repurchases (5,545) (9,000) (8,000) 3,455
Cash dividends paid (7,916) (7,533) (6,761) (383)
Purchases of property, equipment and capitalized software
(3,622) (3,499) (3,386) (123)
Purchases of investments, net of sales and maturities - - (1,777) -
Purchases of redeemable noncontrolling interests (165) (280) (730) 115
Loans to care providers - cyberattack - (9,033) - 9,033
Originations and purchases of loans, net of repayments and maturities (2,815) (1,569) (1,051) (1,246)
Customer funds administered - (1,560) (521) 1,560
Other (341) (1,743) (1,059) 1,402
Total uses of cash (24,913) (47,625) (33,421) 22,712
Effect of exchange rate changes on cash and cash equivalents
40 (61) 97 101
Net (decrease) increase in cash and cash equivalents, including cash within businesses held for sale $ (592) $ 104 $ 2,062 $ (696)
Less: net increase in cash within businesses held for sale (355) (219) - (219)
Net (decrease) increase in cash and cash equivalents $ (947) $ (115) $ 2,062 $ (915)
2025 Cash Flows Compared to 2024 Cash Flows
Decreased cash flows provided by operating activities were driven by decreased cash flows from net earnings, partially offset by changes in working capital accounts, the impact of the sale of receivables and the impacts of the Change Healthcare cyberattack in 2024. Other significant changes in sources or uses of cash year-over-year included the net impacts of loans to care providers in response to the Change Healthcare cyberattack, decreased cash paid for acquisitions and other transactions, decreased common share repurchases and increased customer funds administered, offset by decreased net issuances of short-term borrowings and long-term debt, decreased cash received from dispositions, increased net originations and purchases of loans and decreased proceeds from common stock issuances.
Financial Condition
As of December 31, 2025, our cash, cash equivalent, available-for-sale debt securities and marketable equity securities balances of $74.7 billion included $24.4 billion of cash and cash equivalents (of which approximately $1.1 billion was available for general corporate use), $48.2 billion of debt securities and $2.1 billion of marketable equity securities. Additionally, we had $9.7 billion of loan receivables as of December 31, 2025. Given the significant portion of our portfolio held in cash equivalents, we do not anticipate fluctuations in the aggregate fair value of our financial assets to have a material impact on our liquidity or capital position. Other sources of liquidity, primarily from operating cash flows and our commercial paper program, which is fully supported by our bank credit facilities, reduce the need to sell investments during adverse market conditions. See Note 4 of the Notes to the Consolidated Financial Statements included in Part II, Item 8, "Financial Statements and Supplementary Data"for further detail concerning our fair value measurements.
Our available-for-sale debt portfolio had a weighted-average duration of 4.1 years and a weighted-average credit rating of "Double A" as of December 31, 2025. When multiple credit ratings are available for an individual security, the average of the available ratings is used to determine the weighted-average credit rating.
Capital Resources and Uses of Liquidity
Cash Requirements. The Company's cash requirements within the next twelve months include medical costs payable, accounts payable and accrued liabilities, short-term borrowings and current maturities of long-term debt, other current liabilities, and purchase commitments and other obligations. We expect the cash required to meet these obligations to be primarily generated through cash flows from current operations; cash available for general corporate use; and the realization of current assets, such as accounts receivable.
Our long-term cash requirements under our various contractual obligations and commitments include:
•Debt obligations.See Note 8 of the Notes to the Consolidated Financial Statements included in Part II, Item 8, "Financial Statements and Supplementary Data"for further detail of our long-term debt and the timing of expected future payments. Interest coupon payments are typically paid semi-annually.
•Operating leases.See Note 12 of the Notes to the Consolidated Financial Statements included in Part II, Item 8, "Financial Statements and Supplementary Data"for further detail of our obligations and the timing of expected future payments.
•Purchase and other obligations.These include $8.1 billion, $2.5 billion of which is expected to be paid within the next twelve months, of fixed or minimum commitments under existing purchase obligations for goods and services, including agreements cancelable with the payment of an early termination penalty, and remaining capital commitments for venture capital funds and other funding commitments. These amounts exclude agreements cancelable without penalty and liabilities to the extent recorded in our Consolidated Balance Sheets as of December 31, 2025.
•Put and Call Options. See Note 12 of the Notes to the Consolidated Financial Statements included in Part II, Item 8, "Financial Statements and Supplementary Data"for further detail.
•Other liabilities.These include other long-term liabilities reflected in our Consolidated Balance Sheets as of December 31, 2025, including obligations associated with certain employee benefit programs, unrecognized tax benefits and various long-term liabilities, which have some inherent uncertainty in the timing of these payments.
•Redeemable noncontrolling interests. See Note 2 of the Notes to the Consolidated Financial Statements included in Part II, Item 8, "Financial Statements and Supplementary Data"for further detail. We do not have any material potential required redemptions in the next twelve months.
We expect the cash required to meet our long-term obligations to be primarily generated through future cash flows from operations. However, we also have the ability to generate cash to satisfy both our current and long-term requirements through the issuance of commercial paper, issuance of long-term debt, or drawing under our committed credit facilities or the ability to sell investments. We believe our capital resources are sufficient to meet future, short-term and long-term, liquidity needs.
Short-Term Borrowings.Our revolving bank credit facilities provide liquidity support for our commercial paper borrowing program, which facilitates the private placement of senior unsecured debt through independent broker-dealers, and are available for general corporate purposes. For more information on our commercial paper and bank credit facilities, see Note 8 of the Notes to the Consolidated Financial Statements included in Part II, Item 8, "Financial Statements and Supplementary Data."
As of December 31, 2025, we were in compliance with the various covenants under our bank credit facilities.
Long-Term Debt.Periodically, we access capital markets to issue long-term debt for general corporate purposes, such as to meet our working capital requirements, to refinance debt, to finance acquisitions or for share repurchases. For more information on our debt, see Note 8 of the Notes to the Consolidated Financial Statements included in Part II, Item 8 "Financial Statements and Supplementary Data."
Credit Ratings.Our credit ratings as of December 31, 2025 were as follows:
Moody's S&P Global Fitch A.M. Best
Ratings Outlook Ratings Outlook Ratings Outlook Ratings Outlook
Senior unsecured debt A2 Negative A+ Negative A Negative A- Stable
Commercial paper P-1 n/a A-1 n/a F1 n/a AMB-1 n/a
The availability of financing in the form of debt or equity is influenced by many factors, including our profitability, operating cash flows, debt levels, credit ratings, debt covenants and other contractual restrictions, regulatory requirements and economic and market conditions. A significant downgrade in our credit ratings or adverse conditions in the capital markets may increase the cost of borrowing for us or limit our access to capital.
Regulatory Capital.As a result of an increased MCR impacting our regulated insurance and HMO subsidiaries, the specified levels of required statutory capital required to be maintained are expected to increase. We have entered into various agreements with reinsurers that could limit our risk of loss under certain circumstances, thus reducing our capital and surplus requirements. These agreements do not qualify for reinsurance accounting and are therefore accounted for under deposit accounting.
Share Repurchase Program. As of December 31, 2025, we had Board of Directors' authorization to purchase up to 21 million shares of our common stock. The Board of Directors from time to time may further amend the share repurchase program in order to increase the authorized number of shares which may be repurchased under the program. For more information on our share repurchase program, see Note 10 of the Notes to the Consolidated Financial Statements included in Part II, Item 8, "Financial Statements and Supplementary Data."
Dividends. In June 2025, our Board of Directors increased our quarterly cash dividend to shareholders to an annual rate of $8.84 compared to $8.40 per share. For more information on our dividend, see Note 10 of the Notes to the Consolidated Financial Statements included in Part II, Item 8, "Financial Statements and Supplementary Data."
We do not have other significant contractual obligations or commitments requiring cash resources. However, we continually evaluate opportunities to expand our operations, which include internal development of new products, programs and technology applications and may include acquisitions.
CRITICAL ACCOUNTING ESTIMATES
Critical accounting estimates are those estimates requiring management to make challenging, subjective or complex judgments, often because they must estimate the effects of matters inherently uncertain and may change in subsequent periods. Critical accounting estimates involve judgments and uncertainties which are sufficiently sensitive and may result in materially different results under different assumptions and conditions.
Medical Costs Payable
Medical costs and medical costs payable include estimates of our obligations for medical care services rendered on behalf of consumers, but for which claims have either not yet been received or processed. Depending on the health care professional and type of service, the typical billing lag for services can be up to 90 days from the date of service. Approximately 90% of claims related to medical care services are known and settled within 90 days from the date of service.
In each reporting period, our operating results include the effects of more completely developed medical costs payable estimates associated with previously reported periods. If the revised estimate of prior period medical costs is less than the previous estimate, we will decrease reported medical costs in the current period (favorable development). If the revised estimate of prior period medical costs is more than the previous estimate, we will increase reported medical costs in the current period (unfavorable development). Medical costs in 2025, 2024 and 2023 included favorable medical cost development related to prior years of $140 million, $700 million and $840 million, respectively.
In developing our medical costs payable estimates, we apply different estimation methods depending on the month for which incurred claims are being estimated. For example, for the most recent two months, we estimate claim costs incurred by applying observed medical cost trend factors to the average per member per month (PMPM) medical costs incurred in prior months for which more complete claim data is available, supplemented by a review of near-term completion factors.
Completion Factors.A completion factor is an actuarial estimate, based upon historical experience and analysis of current trends, of the percentage of incurred claims during a given period adjudicated by us at the date of estimation. Completion factors are the most significant factors we use in developing our medical costs payable estimates for periods prior to the most recent two months. Completion factors include judgments in relation to claim submissions such as the time from date of service to claim receipt, claim levels and processing cycles, as well as other factors. If actual claims submission rates from providers (which can be influenced by a number of factors, including provider mix and electronic versus manual submissions), actual care activity incurred (which can be influenced by pandemics or seasonal illnesses, such as influenza), or our claim processing patterns are different than estimated, our reserve estimates may be significantly impacted.
The following table illustrates the sensitivity of these factors and the estimated potential impact on our medical costs payable estimates for those periods as of December 31, 2025:
Completion Factors
(Decrease) Increase in Factors 		Increase (Decrease)
In Medical Costs Payable
(in millions)
(0.75)% $ 1,163
(0.50) 774
(0.25) 386
0.25 (384)
0.50 (766)
0.75 (1,145)
Medical Cost Per Member Per Month Trend Factors.Medical cost PMPM trend factors are significant factors we use in developing our medical costs payable estimates for the most recent two months. Medical cost trend factors are developed through a comprehensive analysis of claims incurred in prior months, provider contracting and expected unit costs, benefit design and a review of a broad set of health care utilization indicators. These factors include but are not limited to pharmacy utilization trends, inpatient hospital authorization data and seasonal and other incidence data from the National Centers for Disease Control. We also consider macroeconomic variables such as GDP growth, employment and disposable income. A large number of factors can cause the medical cost trend to vary from our estimates, including: our ability and practices to manage medical and pharmaceutical costs; changes in level and mix of services utilized; mix of benefits offered, including the impact of co-pays and deductibles; changes in medical practices; and catastrophes, epidemics and pandemics.
The following table illustrates the sensitivity of these factors and the estimated potential impact on our medical costs payable estimates for the most recent two months as of December 31, 2025:
Medical Cost PMPM Quarterly Trend
Increase (Decrease) in Factors 		Increase (Decrease)
In Medical Costs Payable
(in millions)
3% $ 1,503
2 1,002
1 501
(1) (501)
(2) (1,002)
(3) (1,503)
The completion factors and medical cost PMPM trend factors analyses above include outcomes considered reasonably likely based on our historical experience estimating liabilities for incurred but not reported benefit claims.
Management believes the amount of medical costs payable is reasonable and adequate to cover our liability for unpaid claims as of December 31, 2025, but actual claim payments may differ from established estimates as discussed above. Assuming a hypothetical 1% difference between our December 31, 2025 estimates of medical costs payable and actual medical costs payable, 2025 net earnings would have increased or decreased by approximately $300 million.
For more detail related to our medical cost estimates, see Note 2 of the Notes to the Consolidated Financial Statements included in Part II, Item 8, "Financial Statements and Supplementary Data."
Goodwill
We evaluate goodwill for impairment annually or more frequently when an event occurs or circumstances change indicating the carrying value may not be recoverable. When testing goodwill for impairment, we may first assess qualitative factors to determine if it is more likely than not the carrying value of a reporting unit exceeds its estimated fair value. During a qualitative analysis, we consider the impact of changes, if any, to the following factors: macroeconomic, industry and market factors; cost factors; changes in overall financial performance; and any other relevant events and uncertainties impacting a reporting unit. If our qualitative assessment indicates a goodwill impairment is more likely than not, we perform additional quantitative analyses. We may also elect to skip the qualitative testing and proceed directly to the quantitative testing. For reporting units where a quantitative analysis is performed, we perform a test measuring the fair values of the reporting units and comparing them to their carrying values, including goodwill. If the fair value is less than the carrying value of the reporting unit, an impairment is recognized for the difference, up to the carrying amount of goodwill.
We estimate the fair values of our reporting units using a discounted cash flow method which includes assumptions about a wide variety of internal and external factors. Significant assumptions used in the discounted cash flow method include financial projections of free cash flow, including revenue trends, medical costs trends, operating productivity, income taxes and capital levels; long-term growth rates for determining terminal value beyond the discretely forecasted periods; and discount rates. For each reporting unit, comparative market multiples are used to corroborate the results of our discounted cash flow test.
Financial projections and long-term growth rates used for our reporting units are consistent with, and use inputs from, our internal long-term business plan and strategies. Discount rates are determined for each reporting unit and include consideration of the implied risk inherent in their forecasts. Our most significant estimate in the discount rate determinations involves our adjustments to the peer company weighted average costs of capital reflecting reporting unit-specific factors. We have not made any adjustments to decrease a discount rate below the calculated peer company weighted average cost of capital for any reporting unit. Reporting unit-specific adjustments to discount rates are subjective and thus are difficult to measure with certainty. The passage of time and the availability of additional information regarding areas of uncertainty with respect to the reporting units' operations could cause these assumptions to change in the future. Additionally, as part of our quantitative impairment testing, we perform various sensitivity analyses on certain key assumptions, such as discount rates and cash flow projections to analyze the potential for a material impact. As of October 1, 2025, we completed our annual impairment tests for goodwill with all of our reporting units having fair values substantially in excess of their carrying values.
LEGAL MATTERS
A description of our legal proceedings is presented in Note 12 of Notes to the Consolidated Financial Statements included in Part II, Item 8, "Financial Statements and Supplementary Data."
CONCENTRATIONS OF CREDIT RISK
Investments in financial instruments such as marketable securities and accounts receivable may subject us to concentrations of credit risk. Our investments in marketable securities are managed under an investment policy authorized by the Audit & Finance Committee of the Board of Directors. The investment policy establishes defined limits on credit quality, security selection, and permissible asset classes to ensure a disciplined and risk-appropriate investment approach. Concentrations of credit risk with respect to accounts receivable are limited due to the large number of employer groups and other customers constituting our client base. As of December 31, 2025, there were no significant concentrations of credit risk.
UnitedHealth Group Inc. published this content on March 02, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on March 02, 2026 at 11:10 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]