Health insurers felt the sting of elevated medical costs yet again in the third quarter, with the congressional debate over the Affordable Care Act (ACA) subsidies looming large for investors.
UnitedHealth Group was the most profitable company in the third quarter, bringing in $2.3 billion in earnings. The Cigna Group was the next-highest earner with $1.9 billion in profit.
The quarter marked significant downswings for multiple players, including huge losses for both Centene and CVS Health as the companies wrote down expenses. For Centene, this amounted to a $6.6 billion loss after incurring a $6.7 billion impairment charge on its "goodwill," while CVS posted a $3.99 billion loss with a $5.7 billion impairment.
Centene attributed the impairment to multiple factors, including changes under the One Big Beautiful Bill Act and its own decreasing stock price. CVS, meanwhile, linked its charge to its Oak Street Health unit.
UnitedHealth was also the industry leader on revenue in the third quarter, posting $113.2 billion. The industry giant spent much of its investor call detailing strategies it's taking to improve the performance at some of the segments hit hardest by the utilization trend, namely Optum Health and UnitedHealthcare's government plans.
UHG CEO Stephen Hemsley called the coming year a "stepping-off point" for the company to improve performance, with eyes focused on 2027. UnitedHealth is diving deep into Optum Health's sprawl to get its value-based model back on track and broadly repricing plans across its UnitedHealthcare portfolio.
UHC CEO Tim Noel said this effort should lead to greater stability in its marketplace and employer-sponsored plans, while Medicaid costs and rising acuity in that market will make a turnaround a greater challenge.
CVS had the next-highest revenue, earning $102.9 billion, a record high for the company. The team is working to pivot its strategy around Oak Street to improve performance but remains committed to value-based care.
That work extends to closing low-performing clinics, executives said.
However, while the Oak Street unit did struggle in the third quarter, CVS said it saw a rebound in its health benefits unit, Aetna, and its pharmacy benefit manager, Caremark. Aetna had been in a financial tailspin dating back to 2024, though the unit has had positive momentum in the last couple of quarters.
Cigna notched year-over-year growth in both profit and revenue, posting $69.7 billion in revenue for the third quarter. However, executives did forecast incoming margin pressures related to its newly unveiled PBM model and a major push toward PBM client retention.
Cigna CEO David Cordani said the company expects to feel the dampening effects on company margins in the next two years but that these investments now will put the company in a stronger position for the long term.
Centene, like CVS, posted a large loss on a write-down in the third quarter, but it did also post year-over-year revenue growth. Third-quarter revenues grew from $42 billion a year ago to $49.7 billion in the third quarter of 2025.
The insurer has faced significant financial pressure related to the ACA exchanges as it braces for the potential expiry of key subsidies as well as for broad program integrity measures to take effect. Centene also has significant exposure to Medicaid and the cost pressures therein, including a growing morbidity among enrollees.
CEO Sarah London said that despite the headwinds, the insurer remains committed to the ACA market.
Elevance Health posted $1.2 billion in profit and $50.7 billion in revenue for the third quarter. The company was the first to report its results in the third quarter, and executives warned that Medicaid cost pressures would likely be here to stay for the immediate future.
Elevance CEO Gail Boudreaux said ongoing eligibility determinations as well as increasing acuity are set to play a role in much of 2026, though Elevance expects more of a return to normalcy in 2027.
Humana closed the third quarter with $195 billion in profit and $32.6 billion in revenue. The company felt the sting of rising costs in Medicare Advantage (MA) earlier than its peers did and has been investing in improvements to shore up its core MA business.
A major focus on its earnings call was the star ratings and how Humana can bounce back from a lackluster outing in the latest scores, with just 20% of its members enrolled in plans with at least four stars.
Humana CEO Jim Rechtin said the team is currently putting a focus on HEDIS measures and patient safety metrics and will also be looking to improvements around CAHPS and the Health Outcomes Survey.