Next week’s UnitedHealth Group quarterly earnings are greatly anticipated for signs the health insurance giant and it rivals are getting a handle on rising costs dragging down managed care industry. This July 12, 2019, photo shows the UnitedHealthcare headquarters in Minneapolis. . (AP Photo/Jim Mone, File)

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Next week’s UnitedHealth Group quarterly earnings are greatly anticipated for signs the health insurance giant and its rivals are getting a handle on rising costs dragging down the managed care industry.

UnitedHealth, which owns the nation’s largest health insurer in UnitedHealthcare, on Tuesday, April 21 will be the first health insurer out of the box to report first quarter earnings as the industry continues to reel from higher-than-expected medical costs.

UnitedHealth’s report will offer clues as to whether the sector may finally be turning the corner with most health plans reporting medical loss ratios north of 90%. Such a ratio, which is the percentage of premium revenue that goes toward medical costs, have risen above 90%. The industry would prefer such ratios to be before 90% in the mid 80s where the industry was less than two years ago.

But recent reports from industry analysts and other observers aren’t optimistic of a health insurer rebound.

Take a report last month from Moody’s Ratings that dubbed the health insurance industry’s outlook for this year as negative “as rising medical costs, thin margins, and regulatory pressures constrain the sector’s ability to regain sustainable profitability in 2026,” the analysis said.

In particular, Moody’s cited declines in membership “across all segments in 2025” and medical loss cost trends that remain “high and cannot be fully offset by premium increases.”

“Health insurers continue to face high medical loss cost inflation that has affected virtually all health insurance segments including Medicare Advantage, Medicaid, the Affordable Care Act individual marketplace and group commercial,” Moody’s said. “Policy pricing adjustments and reimbursement rates for services provided have lagged medical inflation trends, medical loss ratios have deteriorated and EBITDA margins have declined to low to mid-single digit levels in 2025.”

The Moody’s report, however, came ahead of an announcement by the Trump administration last week saying health insurers that sell Medicare Advantage plans would get a rate hike they feared would be flat.

Instead, the Centers for Medicare & Medicaid Services (CMS) announced a 2.48% payment increase, which amounts to more than $13 billion in additional Medicare Advantage payments to private health insurers, that is much larger than a flat rate of 0.09% that was proposed in January.

The Medicare rate increase for 2027 is good news to some of the nation’s largest health insurers including UnitedHealthcare, CVS Health’s Aetna, Humana and Elevance Health, which all have been struggling to contain medical expenses of a record number of older adults enrolled in Medicare Advantage plans. Elevance Health reports its first quarter earnings April 22, Humana reports on April 29 and CVS reports on May 6.

Medicare Advantage plans contract with the federal government to provide traditional coverage available in traditional Medicare plus extra benefits and services to seniors, such as disease management and nurse help hotlines with some also offering vision, dental care and wellness programs.

“This 2.48% includes no change to the -1.53% headwind related to the unlinked chart review, which we do not believe negatively impacts our coverage universe,” Mizuho Americas research analyst Ann Hynes wrote in a note last week following CMS announcement. “As a result, we estimate MA rates in the ~+4.0% range depending on the company. This, coupled with benefit cuts, should allow MA margins to continue to expand in 2027, a positive sentiment driver for the group.”