AM Best has reassigned UnitedHealth Group’s credit ratings outlooks from stable to negative in anticipation of poor 2025 performance in its Medicare Advantage segment.
Similar action has been taken at S&P Global, which has reassigned a negative outlook.
Elevated medical costs for a number of new Medicare Advantage recipients and an expansion of benefits covered by the service increased operating costs for the business, AM Best said, while the programme’s structure prevents UnitedHealthcare from taking corrective pricing actions on its policies before 2026.
UnitedHealth Group’s removal of its full-year earnings guidance from its most recent earnings report prompted S&P Global Ratings to downgrade the company’s outlook. However, it noted: “We continue to view UnitedHealthcare’s earnings issues as largely fixable, depending on the competitive environment, medical cost trends, and operational execution […] we believe an overall earnings recovery, at least partially, remains achievable in 2026.”
While outlooks have fallen, AM Best has affirmed the long-term issuer credit rating (ICR) of a (excellent) and a financial strength rating of A+ (superior) for the parent company. Its health and detail insurance subsidiaries (UnitedHealthcare) have retained their aa- (superior) long-term ICRs.
These ratings reflect a strong balance sheet, a very strong operating performance, a very favourable business profile and appropriate enterprise risk management, AM Best said.
At S&P Global Ratings UnitedHealth Group has also retained A+/A-1 issuer credit ratings for its parent and intermediate holding companies, and AA- long-term financial strength and issuer credit ratings for its subsidiaries.
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