UnitedHealth Group (UNH) , which owns UnitedHealthcare and Optum, has had a challenging few months. In December of last year, UnitedHealthcare CEO Brian Thompson was shot and killed in front of a Hilton hotel in midtown Manhattan.
The tragic incident had a major domino effect after it was later discovered that the suspect, Luigi Mangione, allegedly left behind bullet shell casings at the scene that had the words “deny,” “defend,” and “depose” written on them.
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Those three words often describe tactics health insurance companies use to avoid paying claims.
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Mangione gained a group of supporters who related to his frustrations with the health care industry. Many people took to social media to express outrage over the industry’s long history of denying insurance claims, even for people who are terminally ill.
UnitedHealth increasingly faced scrutiny over its policies and practices, such as allegedly using artificial intelligence to deny claims, which prompted protests from consumers.
A group of UnitedHealth’s shareholders even expressed concern over its practices by submitting a proposal to the health care giant in January, demanding a report on the macroeconomic risks associated with “the company’s practices that limit or delay access to healthcare.”
UnitedHealth CEO flags a major disappointment
Amid this controversy, UnitedHealth revealed in its first-quarter earnings report of 2025 that it faced a $9.8 billion year-over-year increase in revenues so far this year and managed to serve 780,000 new customers. However, UnitedHealth CEO Andrew Witty warned that the company did not meet expectations.
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“UnitedHealth Group grew to serve more people more comprehensively but did not perform up to our expectations, and we are aggressively addressing those challenges to position us well for the years ahead, and return to our long-term earnings growth rate target of 13 to 16%,” said Witty.
During an earnings call on April 17, Witty said the company’s performance was “unusual and unacceptable” and was impacted by a number of factors, including increased care activity.
“In UnitedHealthcare’s Medicare Advantage business, we had planned for 2025 care activity to increase at a rate consistent with the utilization trend we saw in 2024,” said Witty. “Instead, though, first quarter 2025 indications suggest care activity increased at twice that rate.”
Related: UnitedHealth stock tumbles after Medicare Advantage changes hit outlook
He said that while more customers are seeking preventative care, which includes more in-home visits and clinical assessments, he flagged that the number of follow-up care visits, such as specialist visits and other outpatient services, was higher than the company anticipated.
“A dynamic at play in our group Medicare Advantage business is we’re seeing a significant and disproportionate increase in utilization largely within our public sector group retiree business, and this is a population that experienced the greatest year-over-year premium increases,” said Witty.
He also said that “unanticipated changes” in the company’s Optum Medicare membership also negatively impacted its revenues this year.
“We added more new Medicare patients to OptumHealth, a portion of whom were covered by plans that were exiting markets,” said Witty. “They experienced a surprising lack of engagement last year, which led to 2025 reimbursement levels well below what we would expect and likely not reflective of their actual health status. Additionally, many of the current and new complex patients we serve are more affected by the CMS risk model changes that we are in the process of implementing.”
UnitedHealth CEO highlights the source of the problem
Witty flagged that this change in customer behavior likely resulted from the Biden administration’s “dramatic price cutting” across the health insurance industry over the last few years, which caused a “very significant increase” in plan exits across the country.
“You’ve seen premiums and benefits start to be affected in the marketplace. Group premiums have gone up because of these price cuts,” said Witty. “That is now driving a different behavior from group members, and that’s what we’ve picked up in this area.”
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In response to these changes, Witty emphasized that UnitedHealth “will work to better anticipate and address these factors.”
Some of the company’s efforts to accomplish this include ensuring that complex patients who were most impacted by the Biden administration’s Medicare funding cuts engage in clinical and value-based programs.
It also plans to double down on appropriately assessing and updating the status of new patients, “especially those at high risk levels.” Witty also said that “Medicare Advantage plan designs and pricing for 2026” will be updated to reflect recent consumer trends.
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