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Health insurers including UnitedHealthcare, CVS Health’s Aetna, Centene, and Blue Cross and Blue Shield plans owned by Elevance Health are reporting lower costs tied to patients submitting claims. However, analysts warn that insurers offering government-subsidized coverage may face renewed pressure as Americans drop plans or struggle to afford them amid policy changes.
UnitedHealthcare, the nation’s largest insurer and a unit of UnitedHealth Group, reported a medical loss ratio below 85% for the first quarter of this year. The medical loss ratio—premium revenue spent on medical costs—fell to 83.9% in the first quarter of 2026, compared with 84.8% in the first quarter of 2025.
UnitedHealth said the year-over-year decrease was driven by strong medical cost management and favorable reserve development, partially offset by elevated utilization and unit cost trends.
Most insurers have been battling rising medical expenses for much of the past two years, with medical loss ratios around 90% or higher in many cases. UnitedHealthcare’s full-year adjusted 2025 medical care ratio was 88.9%, compared with 85.5% in 2024. The company also reported an adjusted medical care ratio of more than 91% in the fourth quarter.
Despite the current improvement, Fitch Ratings said conditions could challenge insurers’ margin recovery in coming quarters. In a report last week, Fitch cited:
Fitch’s concerns align with reported enrollment shifts following the end of enhanced tax credits. UnitedHealth said its ACA enrollment fell to 1.4 million from 1.7 million last year. Centene reported that ACA enrollment dropped by 2 million enrollees to 3.58 million at the end of the first quarter, compared with 5.54 million at the end of last year and 5.62 million in the year-ago quarter.
Elevance’s enrollment in individual plans was flat at 1.4 million in the first quarter of this year compared with the year-ago quarter. Elevance operates Blue Cross and Blue Shield plans in 14 states.
Across the industry, the end of enhanced tax credits is contributing to an exodus of plan members who either cannot afford coverage or choose lower-priced “bronze” plans with high deductibles, according to analysts and companies.
Democrats in Congress and industry analysts said the enrollment declines and insurer exits—such as Cigna’s decision announced two weeks ago and CVS Health’s exit announced last year—were expected after Republicans in Congress and the Trump White House did not extend enhanced tax credits for ACA buyers.
A KFF analysis last fall said middle-income Americans as well as lower-income individuals would face major premium increases if the credits were not extended, with customer reports of premiums doubling and even tripling for this year.
The subsidies, or premium tax credits, made individual health insurance premiums more affordable and were enhanced by the Biden administration and the Democratic-controlled Congress through the Inflation Reduction Act of 2022. The enhanced subsidies helped ACA enrollment exceed a record 24 million Americans and reach all-time highs.
With fewer insured customers, insurers say the remaining pool could become less favorable. Elevance Health said in its first-quarter SEC filing that:
“The cost of public exchange coverage premiums has increased for those individuals previously receiving the enhanced (premium tax credits), which may negatively impact our individual market enrollment. The ACA continues to impact our business and results of operations, including pricing, minimum medical loss ratios, and the geographies in which our products are available.”
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