UnitedHealth Group Incorporated
Health Care · Managed Health Care
Structural: UNH is the structural read on US managed care - vertical integration (insurance + PBM + care delivery + claims analytics) is the moat. Medicare Advantage is the growth engine (~8M MA lives, half the industry); Optum is the margin engine (~50% of operating profit).
2025-26 is a reset cycle: elevated MLR from senior utilization normalization post-COVID, V28 risk-adjustment phase-in cutting MA rates, and CMS star-ratings litigation overhang. $ELV/$HUM exposed to same MLR headwind, UNH has more diversified earnings base via Optum; MA penetration still rising (~52% of Medicare-eligible); OptumRx scale grows with GLP-1 dispensing volumes; FCF >$30B/yr funds buybacks + bolt-ons; multiple compressed to ~17x fwd vs ~22x historical avg.
Brian Thompson assassination Dec-2024 surfaced public + political hostility to denial rates; DOJ antitrust probe of Optum-physician roll-ups active; Medicare Advantage rate cuts + V28 phase-in compress MA margin into 2026; Change Healthcare cyber breach reputational + regulatory tail; PBM rebate-reform legislation risk; potential single-payer/public-option overhang under any Dem trifecta.
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