SKY YORK JOURNAL News – Insurance companies are facing financial headwinds, prompting several to revise or withdraw their earnings guidance for the year.
Insurance companies are having a rough go of it recently.
Numerous companies this month have announced that they are withdrawing or reducing their earnings guidance for the year. For instance:
* On Tuesday, Oscar Health [announced](https://ir.hioscar.com/news-events-presentations/news-press-releases/news-details/2025/Oscar-Health-Announces-Preliminary-Financial-Results-for-Second-Quarter-2025-and-Revises-2025-Guidance/default.aspx#:~:text=For%202025%2C%20the%20Company%20now,)%20to%20(%24200%20million).) that it is anticipating a loss from operations of $200 million to $300 million for the year, after previously expecting earnings of $225 million to $275 million.
* Last week, Elevance Health [announced](https://www.elevancehealth.com/newsroom/elv-quarterly-earnings-q2-2025) that it reduced its outlook for adjusted earnings per share to about $30 for the year, compared to $34.15.
* On Thursday, Molina Healthcare [announced](https://investors.molinahealthcare.com/news-releases/news-release-details/molina-healthcare-reports-second-quarter-2025-financial-results) that it now expects its full year 2025 adjusted earnings to be $19 per diluted share, compared to $21.50 to $22.50 predicted in early July. This is the second time they’ve reduced it this month.
* Earlier this month, Centene [announced](https://www.prnewswire.com/news-releases/centene-corporation-withdraws-2025-guidance-302496179.html) that it is withdrawing its 2025 GAAP and adjusted diluted earnings per share guidance.
SKY YORK JOURNAL has discovered that increased utilization, particularly in the individual market, is being cited as a major contributor to the financial strain. Patients are increasingly utilizing services such as weight loss drugs and behavioral health expertise, leading to higher claims for insurers.
### Factors Contributing to Financial Challenges
Experts at SKY YORK JOURNAL suggest that a key factor behind these challenges is higher-than-anticipated utilization rates, particularly within the individual market.
Ari Gottlieb, principal of consulting group A2 Strategy Corp., told SKY YORK JOURNAL that in many cases, the individual market was underpriced. Increased utilization of weight loss drugs, high-cost specialty treatments, and behavioral health services has outpaced insurers’ initial projections.
Further complicating matters, the resumption of Medicaid redeterminations has led to higher acuity and utilization as individuals no longer eligible for Medicaid transition to individual plans.
### Medicaid Redeterminations and Reimbursement Rates
Elevance CEO and President Gail K. Boudreaux highlighted challenges related to Medicaid in the company’s [earnings call](https://seekingalpha.com/article/4801972-elevance-health-inc-elv-q2-2025-earnings-call-transcript), indicating elevated medical cost trends across ACA and slower-than-expected Medicaid rate alignment.”
According to Gottlieb, states are still using utilization data from past years to set reimbursement rates for Medicaid plans. However, these rates do not reflect the increased needs of current enrollees after the redetermination process.
### Individual Market Pressures
Oscar Health, a significant provider of individual and family plans, attributed its revised outlook to higher utilization and acuity, expecting a medical loss ratio of 86% to 87% and higher ACA Marketplace risk scores. Molina Healthcare echoed similar concerns, citing the Marketplace as a primary driver of its updated guidance.
Molina President and CEO Joseph Zubretsky acknowledged the challenging medical cost trend environment, stating that current earnings pressures stem from a temporary mismatch between premium rates and accelerating medical costs.
### Efforts to Combat Fraud
SKY YORK JOURNAL has learned that insurers also face challenges regarding increased government oversight and efforts to combat fraud, according to Hal Andrews, Trilliant Health president and CEO. Recent scrutiny from the U.S. Senate targeted a loophole allowing dual enrollment in Medicare Advantage and the Veterans Health Administration. Lawmakers are seeking to allow the VA to charge private health insurers for medical care provided to their members covered under Medicare Advantage.
Additionally, CMS recently [estimated](https://www.cms.gov/newsroom/press-releases/cms-finds-28-million-americans-potentially-enrolled-two-or-more-medicaid/aca-exchange-plans) that 2.8 million Americans are enrolled in two or more Medicaid/ACA exchange plans, leading to duplicate payments for their coverage. CMS is partnering with states to reduce duplicate enrollment, rechecking eligibility and providing states with a list of individuals enrolled in Medicaid in multiple states.
Andrews suggests this means insurers are poised to lose millions of members due to these changes, contributing to earnings adjustments.
The earnings cuts/withdrawals follow a similar [announcement](https://medcitynews.com/2025/05/social-media-uhg-ceo/) from UnitedHealth Group in May. The healthcare giant suspended its 2025 outlook and replaced Andrew Witty as CEO with Stephen J. Hemsley, who served as the company’s CEO from 2006 to 2017.
While several insurers have attributed their challenges to the individual market, Gottlieb notes that UnitedHealth Group’s situation differs slightly, with increased utilization in Medicare Advantage being the primary factor behind their earnings suspension.
### Future Outlook for Insurers
Dr. Robert Pearl, former CEO of the Permanente Medical Group and professor at Stanford, characterizes the revised earnings guidances as symptomatic of a broader issue: the growing unaffordability of healthcare in the U.S. He anticipates challenges for insurers due to Medicaid cuts and the expiration of ACA enhanced premium tax credits, which will significantly [increase premiums](https://medcitynews.com/2025/07/aca-premium-increase/).
SKY YORK JOURNAL reports that Elevance’s CFO, Mark Bradley Kaye, noted that the reconciliation bill and the expiration of the enhanced subsidies could “present near-term enrollment pressures and further shift in the risk pool.” Gottlieb concurred, predicting a “brutal” quarter and year for the individual market, with the potential for even greater challenges in the coming year.
Lopez, partner at consulting firm West Monroe, sees the guidance cuts as a wake-up call for the industry, underscoring the need for more rapid adaptation. He suggests that insurers focus on improving data accessibility and utility, connecting disparate systems, and gaining real-time insights into costs, claims, and patient trends to identify problems and make timely adjustments.
*For more of the latest in litigation, regulation, deals and financial services trends, [sign up ](https://info.breakingmedia.com/finance-docket-newsletter-referral)for Finance Docket, a partnership between Breaking Media publications Above the Law and Dealbreaker.*
