UnitedHealth Heads Into Q4 Earnings As Elevated Medical Costs Loom — Is Stability In Sight?

With health insurer UnitedHealth Group Inc. (NYSE:UNH) set to report its fourth-quarter results on Tuesday, investors remain focused on elevated medical costs, which weighed on the company’s margins and profitability throughout the past year.

Are Medical Costs Set To Normalize?

During the company’s third-quarter results three months ago, UnitedHealth acknowledged that cost pressures remained elevated across the industry and expected it to remain this way for the rest of this year.

The company’s consolidated medical care ratio, which is essentially the percentage of premium revenue used for medical care, stood at 89.9%, up significantly from 85.2% during the same period the prior year, reflecting increased utilization across physician, outpatient, and inpatient services.

While UnitedHealth's own projections place medical cost trends “in excess of 11%,” ...