UnitedHealth Group reported a fourth quarter profit of only $10 million as the healthcare giant absorbed a massive $1.6 billion restructuring charge while working through a comprehensive financial turnaround. The company, which operates the nation’s largest health insurer UnitedHealthcare and major healthcare provider Optum, announced the results Tuesday as part of its full-year 2025 earnings report.
The minimal fourth quarter profit represents a dramatic decline from $5.5 billion in the same period a year earlier. For the full year, UnitedHealth Group posted net income of $12 billion, down from $14.4 billion in 2024, according to the company’s financial statements.
Restructuring Charge Reflects Multiple Initiatives
The $1.6 billion net restructuring charge stemmed from a $2.8 billion hit to earnings before taxes. According to the company, this included $799 million in final costs related to the historic 2024 cyberattack on UnitedHealth businesses and $2.5 billion in restructuring and other expenses.
The restructuring efforts encompass several strategic initiatives, the company said. These include refocusing on key markets, products and geographies, implementing pricing discipline to address higher medical trends and healthcare policy changes, and re-baselining operations at Optum.
Additionally, the restructuring charge covered divestitures and business exits, loss contract assessments, real estate rationalization and workforce reductions. The company characterized these moves as necessary steps to strengthen its core operations and improve future performance.
Medicare Advantage Enrollment Expected to Drop Significantly
UnitedHealth Group is pulling back from certain Medicare Advantage markets, following a trend among major health insurers facing higher costs and limited government reimbursement increases. The company expects Medicare Advantage enrollment to contract by more than 1.1 million older adults this year, according to projections released Tuesday.
The Medicare Advantage pullback, combined with contractions in commercial risk and Medicaid businesses, will cause total enrollment across all medical plans to drop to 47 million in 2026. Furthermore, total company revenues are projected to decline 2% this year to approximately $439 billion.
However, UnitedHealth Group joins rivals CVS Health’s Aetna and Humana in retreating from certain geographic markets after years of expansion. These insurers are attempting to control escalating medical costs during a period when regulatory rate increases remain constrained.
Rising Medical Costs Impact Profitability
UnitedHealthcare faced significantly higher medical costs throughout 2025. The company’s full-year adjusted medical care ratio, which measures the percentage of premium revenue spent on medical costs, reached 88.9% compared to 85.5% in 2024, according to the earnings report.
In the fourth quarter alone, the adjusted medical care ratio exceeded 91%. This increase reflects the industry-wide challenge of managing higher-than-expected healthcare utilization and costs across insurance products.
Revenue Growth Continues Despite Challenges
Despite profitability pressures, UnitedHealth Group demonstrated strong revenue growth across its business segments. Full-year 2025 revenues increased $47.3 billion, or 12% year-over-year, to $447.6 billion, the company reported.
UnitedHealthcare’s revenues grew 16%, or $46.7 billion, to $344.9 billion as the health insurance division served 49.8 million people in 2025, an increase of 415,000 members year-over-year. Meanwhile, Optum revenues rose 7% for the year to $270.6 billion compared to $253 billion at the end of 2024.
In contrast to the weak profit performance, fourth quarter revenues climbed to $113 billion compared to $100.8 billion in the prior year period. The revenue growth demonstrates continued market demand for the company’s healthcare and insurance services.
Leadership Focused on Turnaround
Chief Executive Officer Stephen Hemsley, who returned from retirement last year to lead the company, emphasized progress made during the challenging year. “We confronted challenges directly and finished 2025 as a much stronger company, giving us the momentum to better serve those who count on us and continue to improve our core performance,” Hemsley said in a statement.
The company will continue implementing its turnaround strategy throughout 2026, though specific timelines for achieving targeted profitability improvements have not been disclosed. Investors and industry observers will be monitoring whether the restructuring initiatives successfully offset ongoing pressures from elevated medical costs and reduced enrollment in key markets.
