Welcome to the latest edition of our health insurance financial update, Pulse. Our Health Actuarial Consulting practice aims to keep you informed about key market trends and dynamics that impact health insurer financial results and profitability. Last year, we released our analysis of the Q4 2024 financials. This article offers an overview of the Q4 2025 loss ratio and profitability trends for insured business, earnings drivers, Commercial and Medicaid membership, and market capitalization highlights.
Five key trends driving public health insurers’ financial performance in Q4 2025
- Average reported profit margins decreased compared to Q3 2025 and reached their lowest level in the past five years. There was a 2.2% decrease in average profit margin from Q3 2025 due to a decline in the reported profit margin for all carriers.
- Average loss ratios increased considerably, reaching their highest point in five years at 92.3%, up significantly from Q3 2025.
- Operating expense ratios increased relative to Q3 2025. They were 1.1% higher, though still below the levels seen in 2023 and prior. Some of these increases reflect higher marketing spend in Q4 due to open enrollment.
- Commercial and Medicaid membership declined in the quarter. Commercial and Medicaid membership declined by roughly 673,000 and 568,000 members, respectively.
- Market capitalization remained stable in Q4 2025 but saw a significant decrease in the first two months of 2026. By the end of February 2026, the collective market capitalization of the seven public healthcare companies we monitor was about 7% lower than year-end 2025 and 25% lower than year-end 2024, reflecting the declining profit margins and profitability headwinds identified by many carriers.
Net income for all public health insurers declined relative to Q3 2025
Overall, the unweighted average profit margin (net income/premium) for the four insurers is 1.0%, which is 2.2% lower than the Q3 2025 unweighted average, and 0.5% lower than the Q4 2024 unweighted average of 1.5%.
Aetna CVS Health experienced a negative profit margin in the quarter as it decreased from a gain of 0.2% in Q3 2025 to a loss of 1.1% in Q4 2025.
Cigna’s profit margin declined in the quarter from 8.3% in Q3 2025 to 4.1% in Q4 2025, which is still higher than the 1.4% profit margin realized in Q4 2024.
Elevance’s profit margin decreased in the quarter from 2.4% in Q3 2025 to 1.1% in Q4 2025 and was in line with the profit margin realized in Q4 2024 of 0.9%.
UnitedHealthcare recorded a breakeven net profit margin in Q4 2025, a 2.1% decrease versus Q3 2025, and significantly lower than the margins reported throughout 2023 and 2024.
Average medical loss ratios reached their highest point in five years
On average, the medical loss ratios (medical costs/premium) for the four large public companies that we reviewed were 2.6% higher in Q4 2025 relative to Q3 2025. In Q4 2025, reported loss ratios were 94.8% for Aetna CVS Health, 93.5% for Elevance, 92.4% for UnitedHealthcare, and 88.4% for Cigna.
Overall, the unweighted Q4 2025 average loss ratio of 92.3% was 1.6% higher than the 90.7% average loss ratio reported in Q4 2024. All carriers except for Aetna CVS Health showed increases in their quarterly loss ratio year-over-year, with UnitedHealthcare showing the largest increase of 4.7% (from 87.6% in Q4 2024 to 92.4% in Q4 2025) while Cigna (0.5% from 87.9% to 88.4%) and Elevance (1.1% from 92.4% to 93.5%) reported smaller increases. Aetna CVS Health’s quarterly loss ratio was high and consistent with the prior year, with quarterly loss ratios of 94.8% in both Q4 2024 and Q4 2025. Note that it is typical to see some seasonality in loss ratios, with Q4 loss ratios higher than those in earlier quarters in a given calendar year.
Average Q4 2025 operating expense ratios increased relative to Q3 2025
Operating expense ratios (operating expense/premium) increased by 1.1% from Q3 2025 to Q4 2025. This overall average increase was driven by Cigna, whose ratio increased by 2.1% from 3.1% in Q3 2025 to 5.2% in Q4 2025, and UnitedHealthcare, whose ratio increased by 1.4% from 6.1% in Q3 2025 to 7.6% in Q4 2025. The expense ratio of Aetna CVS Health showed a smaller increase, while Elevance’s was stable in the quarter. While the Q4 2025 loss ratio was about 0.8% higher than Q4 2024, operating expense ratios appear to be continuing an overall declining trend based on our analysis and estimates.
Most companies reported elevated trends and higher medical loss ratios in Q4 2025
Aetna CVS Health — Quarterly MBR spiked to 94.8%
Reported medical benefit ratio (MBR) of 94.8% in the quarter and 91.2% for the full year. Aetna CVS Health noted that the higher medical benefit ratio in the quarter was driven by changes in the seasonality of the Medicare Part D program, a deterioration in the risk position in its Individual Exchange business, and increased flu activity observed late in the quarter.
Centene — Medicaid behavioral health drove elevated costs
Ended the year with a health benefits ratio of 91.9%, an increase of 3.6% relative to the prior year. Within the quarter, Centene noted that its Medicaid line of business continued to experience elevated medical cost ratios, with behavioral health utilization driving about half of the excess trends and both home health and high-cost drugs also applying pressure.
Cigna — Higher MCR tied to Individual and Family Plan costs
Medical care ratio (MCR) in 2025 was higher than experienced in 2024 due to higher medical costs in the Individual and Family Plan business. Cigna reported that full-year 2026 MCR is expected to be in the range of 83.7% to 84.7%, which is generally in line with 2025 but higher than that experienced in 2024 and prior years, reflecting the elevated cost trend environment.
Elevance — Cost trends rising across all lines of business
Reported a benefit expense ratio of 93.5% within the quarter, an increase of 1.1% year-over-year, due to higher medical cost trends across all lines of business. For 2026, Elevance noted that it expects an accelerating cost trend in Individual ACA as healthier members exit. In addition, it expects to continue seeing elevated acuity and utilization in Medicaid and higher cost trend in Medicare due to membership mix.
Molina — MCRs near or above 95% across all segments
Reported Q4 2025 medical cost ratios by lines of business, including 93.5% for Medicaid, 97.5% for Medicare, and 99.0% for Marketplace. Molina noted the heightened loss ratios were driven by higher usage in behavioral health, pharmacy, its Medicaid Long Term Services and Supports segment, professional office/outpatient visits, and high-cost drugs.
UnitedHealthcare — Medicare Advantage rising toward 10% in 2026
Within the year, UnitedHealthcare noted that Medicare Advantage medical cost trend was about 7.5%, driven by elevated utilization, higher physician fee schedules, and higher service intensity per encounter. It expects the trend to increase to 10% in 2026. In addition, it notes that Medicaid continues to experience state funding shortfalls and a mismatch between rate and acuity.
Commercial and Medicaid enrollment declined for public carriers in Q4 2025
In Q4 2025, total Medicaid membership for public carriers declined about 1.5% compared with Q3 2025. However, Medicaid enrollment is still about 18% higher than it was at the beginning of the pandemic. Total Commercial membership decreased by about 0.7% over Q3 2025.
Centene — Major Marketplace shifts expected in early 2026
Medicaid membership declined by about 188,000 members, ending the quarter with 12.5 million members. Within its Marketplace business, Centene ended the year with 5.5 million members, reflecting growth of over 26% versus year-end 2024. Centene noted it expects a decline of about 2.0 million members in Q1 2026, ending the quarter with 3.5 million due to the expiration of enhanced premium tax credits. It also expects a higher share of members to enroll in Bronze plans (about 30% in 2026 versus 19% to 24% over the past four years).
Aetna CVS Health — Membership down 500,000 year-over-year
Ended the year with about 26.6 million medical members, a decrease of about 500,000 from the prior year-end. Declines in individual exchange and Medicare businesses were mostly offset by growth in commercial fee-based business.
Elevance — Membership declines tied to Medicaid redeterminations
Ended the quarter with approximately 45.2 million medical members, a decrease of about 500,000 since year-end 2024, mainly due to new Medicaid eligibility requirements. It noted that it expects Individual ACA membership to grow about 10% in 2026 following a strong selling season and solid retention. It anticipates Medicare membership to decline in the high-teens percentage range in 2026 due to deliberate portfolio actions and stable dual-eligible membership.
Molina — Membership stable overall, Marketplace expected to fall
Ended the quarter with approximately 5.5 million members, roughly flat year-over-year. Molina expects Marketplace membership to decline by about 220,000 in 2026. However, it expects membership in other lines of business to remain stable relative to year-end 2025.
UnitedHealthcare — Growth in 2025, planned contraction in 2026
UnitedHealthcare added about 415,000 new members in 2025. For 2026, it expects to contract between 2.3 million and 2.8 million members as a margin recovery strategy, with 1.3 million to 1.4 million and 565,000 to 715,000 of this contraction occurring within its Medicare and Medicaid lines of business, respectively.
The chart below displays enrollment changes over the past 16 quarters for Commercial and Medicaid across public companies with consistent data. In Q4 2025, total Commercial membership decreased by roughly 673,000, while Medicaid membership fell by about 568,000.
Health plan capitalization decreased considerably in 2025
In 2025, the collective market capitalization of the seven public healthcare companies we monitor decreased considerably, with several public companies seeing declines of 30% or more. Based on market data from December 31, 2024, and December 31, 2025, the combined market capitalization of these seven public health plans fell by 19.8%, driven by Molina (-46.4%), UnitedHealthcare (-35.8%), and Centene (-33.9%). During the same period, the S&P 500 index grew by 16.4%, resulting in a difference in capitalization growth of about 45%.
Additionally, the collective market capitalization of the healthcare companies has experienced an inverse trend relative to the S&P 500 index between December 31, 2022, and December 31, 2025. Overall, the market capitalization of the healthcare companies has declined by 37.1%, compared with an increase of 78.3% in the S&P 500 index, resulting in a difference in capitalization growth of about 184% over the three-year period.
Healthcare stocks remained relatively stable between Q3 and Q4 2025
Despite overall stability, there was significant variance in company-level changes quarter-over-quarter. Centene (+15.4%), Elevance (+7.1%), and Aetna CVS Health (+5.4%) saw increases in their market capitalization in the quarter. Meanwhile, Molina (-14.0%), UnitedHealthcare (-4.4%), Cigna (-4.4%), and Humana (-1.6%) experienced declines. By comparison, the S&P 500 experienced an increase of about 2.3% in the same period.
From the end of Q4 2025 until February 27, 2026, the collective market capitalization of the seven public healthcare companies we monitor experienced a reduction of 7.2%, compared with a gain of 0.5% seen in the S&P 500.
Four of the seven carriers we monitor experienced a decline in this period. These carriers include Humana (-25.4%), UnitedHealthcare (-11.2%), Molina (-11.1%), and Elevance (-9.3%). These reductions were driven by reported earnings misses announced during their respective earnings calls and notable headwinds going into 2026, especially within the Medicare Advantage space.
Look for our next Pulse update in May 2026.