UnitedHealth Stock Falls 12.8% as Medical Care Ratio Hits 88.9%
UnitedHealth’s shares have fallen 12.8% over the past three months as adjusted medical care ratio rose 340 basis points to 88.9% in 2025 and total medical enrollment is projected to drop to 46.945–47.495 million in 2026 from 49.76 million. The DOJ is investigating its Medicare billing and Optum Rx unit.
1. Stock Performance and Market Trends
UnitedHealth shares have declined 12.8% over the past three months, underperforming the industry’s 10.1% drop. Investor rotation toward high-growth technology and heightened geopolitical tensions have weighed on defensive healthcare stocks and added volatility to the sector.
2. Rising Medical Care Ratio
The company’s adjusted medical care ratio increased to 88.9% in 2025, up 340 basis points year-over-year, driven by higher utilization of healthcare services among seniors in government-supported programs. This deterioration in underwriting metrics heightens margin pressure going forward.
3. Regulatory and Enrollment Challenges
A Department of Justice investigation into Medicare billing practices and scrutiny of its Optum Rx pharmacy benefit manager have elevated compliance risk and potential costs. Management projects total medical enrollment will decline to between 46.945 million and 47.495 million in 2026, down from 49.76 million in 2025.
4. Valuation and Strategic Position
UnitedHealth trades at a forward P/E of 15.84x, below its five-year median of 19.29x but above the industry average of 13.81x. The integrated model, which combines insurance and Optum services, supported $7.9 billion in dividends and $5.5 billion in share repurchases in 2025.