US health insurers forecast to see mixed Q1 2026 revenue numbers as costs rise

Leading publicly traded US managed care insurers are expected to report mixed revenue figures but broad gains in net income for the first quarter of 2026.

Five of the nine largest publicly traded managed care insurers by market capitalization are projected to post lower revenues in the first quarter than in the last quarter of 2025, according to an S&P Global Market Intelligence analysis of analyst forecasts.

Over the past year, several factors have weighed on managed care earnings, including high costs associated with Medicare Advantage plans tailored for seniors, membership acuity shifts among government-subsidized Medicaid plans and changes to Affordable Care Act (ACA) tax credits.

While the loss of ACA tax credits caused industry uncertainty during the fourth quarter, according to an April report from Wakely Consulting Group, plan selections declined by roughly 5%, but actual enrollment is projected to fall between 17% and 26% on average when accounting for unpaid premiums and ongoing attrition.

"This is a moment of transition for the individual market from recent years," said Michelle Anderson, a Wakely actuary and co-author of the report, in a news release. "What we are seeing is not just a change in enrollment levels, but a shift in the profile of members who remain covered, the types of plans they choose, and the overall risk profile of the market."

The Wakely report added that premium payment behavior is a critical indicator of market stability and that states with higher premium increases and higher rates of automatic reenrollment tended to have lower payment rates, signaling more potential coverage losses as the year progresses.

The market is shifting, J.P. Morgan analysts said in a note commenting on the report, but assuming effectuation runs in line with payor expectations, the morbidity of each payor's book and the broader ACA exchanges are the key swing factor in guidance.

"While we view this as a reason for cautious positivity, in that there may not be a negative effectuation/enrollment surprise during [first quarter] earnings, we do not expect payors to broadly revise ACA Exchange guidance until they have further clarity on claims and market morbidity, which we expect will take until June/July," the analysts said.

While revenue was down sequentially, all but two insurers in the analysis — Elevance Health Inc. and Molina Healthcare Inc. — are projected to log higher revenues than in the first quarter of 2025.

Net income

Sequentially, the nine major managed care insurers in the US are all projected to report higher net income in the first quarter compared with the fourth quarter of 2025. However, only The Cigna Group, Elevance, Oscar Health Inc., Clover Health Investments Corp. and Alignment Healthcare Inc. are projected to report rises in net income compared with the first quarter of 2025.

Cigna's increase follows a 2025 first quarter during which the company reportedly exceeded expectations and raised its full-year earnings-per-share guidance to at least $29.60 a share, up from $29.50, even as CEO David Cordani warned of healthcare's "unsustainable trajectory."

Cigna recently settled a lawsuit filed by the Federal Trade Commission, which requires its pharmacy benefit manager to adopt "fundamental changes to its business practices" to boost transparency and push down consumers' out-of-pocket costs for prescription drugs.

Cordani claimed during Cigna's fourth-quarter 2025 earnings call that the settlement will benefit his company's customers and blamed rising healthcare costs in part on burgeoning demand.

"We are steadfast in our focus on leaning in to lower health care costs and expanding access to quality care and medications, but doing so requires confronting the underlying cost drivers, including both the demand and the supply side," Cordani said. "Demand for health care in the United States is growing rapidly."

The lawsuit, which also names UnitedHealth Group Inc. and CVS Health Corp. as defendants, remains ongoing.

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Medical loss ratio

While medical loss ratios for nearly all nine managed care insurers are projected to drop from the fourth quarter, all apart from Alignment, Cigna and UnitedHealth are projected to report larger loss ratios than in the first quarter of 2025.

The fourth quarter was marked by notable increases for most managed care insurers, including Molina, which underperformed partly because of an unprecedented trend and increased acuity in the insurer's marketplace segment, CEO Joseph Zubretsky said during an earnings call.

Marketplace plans, offered through government-run sites rather than employers, saw their medical cost ratio hit 99% during the fourth quarter. For Medicaid, the medical cost ratio for the fourth quarter was 93.5%, impacted by unfavorable and unexpected retroactive premium rate actions taken by California, Zubretsky said. The Medicare medical cost ratio aimed at seniors was even higher at 97.5%.

"We believe the medical cost trend in 2025 was an aberration, an anomaly by historical standards," Zubretsky said.

UnitedHealth will be the first major managed care insurer to report first-quarter results on April 21.