UNH stock rebounds after a steep selloff as UnitedHealth warns of a rare 2026 revenue decline

UNH stock swung sharply in late January trading as UnitedHealth Group, the parent of UnitedHealthcare, delivered a mixed message: profit outlook rising, but revenue expected to fall in 2026 for the first time in decades. By mid-afternoon Wednesday, January 28, 2026, ET, UnitedHealth stock was trading around $294, up roughly 4% on the day after plunging nearly 20% in the prior session.

The whipsaw reflects a market that’s trying to price two things at once: near-term pressure from higher medical costs and policy headwinds, and a company plan to rebuild margins through repricing, restructuring, and operational changes across its insurance and Optum businesses.

Earnings land with a large charge and a softer 2026 top-line forecast

UnitedHealth reported fourth-quarter 2025 revenue of $113.2 billion and adjusted earnings of $2.11 per share, while full-year 2025 revenue totaled $447.6 billion and adjusted earnings were $16.35 per share. Reported results were heavily affected by a $1.6 billion after-tax charge, which the company tied to a mix of restructuring and portfolio actions and a final tally of cyberattack-related costs.

Investors focused quickly on the 2026 setup. The company’s initial outlook calls for 2026 revenue greater than $439 billion, a year-over-year decline of about 2%, alongside adjusted earnings greater than $17.75 per share and earnings greater than $17.10 per share. It also projected earnings from operations greater than $24 billion and an improved net margin relative to 2025.

Further specifics were not immediately available about how quickly the company’s cost and margin initiatives will translate into quarter-by-quarter improvement during 2026.

Why the market is reacting so intensely to “right-sizing” and margin recovery

UnitedHealth has framed 2026 as a year of “measured growth” with a deliberate tradeoff: accept slower expansion in membership and revenue while rebuilding profitability that was squeezed by funding changes and rising care utilization. Management has described repricing and product repositioning efforts that are expected to improve margins, even if they result in membership contraction.

The pushback from the market isn’t simply about one year’s revenue line. A forecasted revenue decline at this scale raises questions about how much business the company is choosing to walk away from, how competitive pricing becomes in Medicare Advantage and employer plans, and whether Optum Health can regain consistent performance after a difficult year.

Some specifics have not been publicly clarified, including the exact mix of membership reductions by product type and geography that will drive the 2026 revenue decline.

How UnitedHealth makes money and why “medical care ratio” drives the story

Health insurers are fundamentally spread businesses: they collect premiums (and government program payments) and then pay medical claims. A key operating metric is the medical care ratio, which measures how much of revenue is spent on medical costs. When utilization rises, provider fees increase, or members need more intensive services, the medical care ratio tends to rise and profitability can compress unless pricing keeps up.

UnitedHealth reported a 2025 medical care ratio of 89.1%, with an adjusted figure of 88.9% after excluding certain impacts from the charge. For 2026, the company expects a medical care ratio around 88.8%, plus or minus 0.50 percentage points, implying modest improvement as repricing actions take hold. The insurer also guided to an operating cost ratio around 12.8%, plus or minus 0.50 points, highlighting ongoing efforts to manage administrative costs while continuing investments.

This mechanism is also why government payment updates matter so much. Medicare Advantage plans are heavily influenced by annual rate-setting and risk adjustment rules. A small shift in the expected rate environment can change how aggressively insurers price benefits, grow membership, and pursue margins the following year.

Policy uncertainty and Optum questions add fuel to the volatility

The selloff was intensified by fresh uncertainty around Medicare Advantage reimbursement. A preliminary federal rate notice for 2027 suggested a near-flat average increase, a sharp contrast to the larger bump that applied for 2026. Even though these notices are not the final word, they can quickly reshape investor expectations about the sector’s earnings recovery timeline.

At the same time, UnitedHealth is trying to stabilize performance across Optum, particularly Optum Health, which has been under pressure from reimbursement dynamics and medical cost trends. The company’s charge also highlighted restructuring and contract reassessments inside Optum, reinforcing that the turnaround work is active and not merely cosmetic.

Who feels the impact: members, employers, providers, and investors

The immediate stakeholder impact extends well beyond traders watching the UNH stock price. Plan members can feel repricing through benefit changes, narrower networks, or shifts in plan availability as the company “right-sizes” participation in specific markets. Employers that buy coverage or pharmacy benefit services may see renewed pricing discipline and a heavier emphasis on cost transparency.

Providers and health systems also have exposure, especially where reimbursement terms, utilization management, and claims workflows are being redesigned. And for employees, the restructuring element signals potential role changes and workforce reductions as the company reshapes parts of the organization.

For investors, the central question is whether 2026 becomes a one-year reset that sets up stronger growth in 2027, or whether the revenue decline and policy pressure mark a longer stretch of muted expansion.

The next verifiable milestone will be the federal government’s final Medicare Advantage rate announcement for 2027, typically released in the spring, alongside UnitedHealth’s next quarterly earnings report in mid-to-late April 2026, when management is expected to provide more detail on membership changes, medical cost trends, and the pace of margin recovery.