Andy Schneider and Nancy Kaneb
The Q4 2025 results for the “Big Five” Medicaid managed care companies are now available. These publicly-held companies—Centene, CVSHealth/Aetna, Elevance, Molina, and UnitedHealth Group—together control about half of the Medicaid managed care market, so their performance matters to tens of millions of Medicaid beneficiaries. (The results for prior quarters in 2025 are here, here, and here.) What follows are the top-line Q4 results for their Medicaid enrollment and revenues.
Figure 1 shows that total Medicaid enrollment for all five companies continued to decline in Q4, both from the end of PHE continuous coverageon March 31, 2023 (down 8.9 million, or 20 percent) and from the enactment of the H.R. 1 Medicaid cutson July 4, 2025 (down 912,000, or 2.5 percent). (All enrollment totals are net of eligibility terminations and new enrollments). The decline in Big Five enrollment was relatively steep during the unwinding, when states redetermined the eligibility of all enrollees. Since the conclusion of the Unwindingin most states around June 2024, the Big Five enrollment decline has continued, but at a more moderate pace. By and large, this decline mirrors the 19.8 percent drop in national Medicaid enrollment, from 86.7 millionin March of 2023 to 69.5 million in October 2025, not the loss of market share to Big Five competitors.
Table 1 presents the experience of the individual companies. All of them saw absolute declines in net Medicaid enrollment. Not surprisingly, the two companies with the largest pre-Unwinding enrollments, Centene and Elevance, had the greatest absolute losses (-3.8 million and -3.4 million, respectively) between March 2023 and December 31, 2025. Measured as percentage of company enrollment over this period; the net enrollment declines vary considerably. Elevance (-28.5 percent) and Centene (-23.3 percent) had the highest percentage losses, followed by CVSHealth/Aetna (-16.8 percent), UnitedHealth Group (-11.9 percent), and Molina (-5.5 percent). The enrollment declines in the six months between the enactment of H.R. 1 and the end of 2025 are considerably less in percentage terms, averaging 2.5 percent, but all five of the companies experienced them.
As shown in Table 2, all of the Big Five other than CVSHealth/Aetna report revenues for their Medicaid lines of business. The three companies that have provided these data since at least the beginning of the unwinding—Centene (+3.7 percent), Molina (+27.0 percent), and UnitedHealth Group (+26.8 percent)—have all experienced Medicaid revenue increases through December 2025 despite declining Medicaid enrollments. This can be partly explained by a combination of increases in capitation rates and higher acuity (i.e., individuals whose eligibility was terminated and left the MCO were on average healthier and needed fewer services than individuals whose eligibility was renewed and stayed with the MCO).
Only two of the Big Five report medical loss ratios, the percentage of Medicaid revenues that the company spends on health care for its enrollees. Those MLRs—93.0 percent in the case of Centene, 93.5 percent in the case of Molina—are higher than what investors and their financial analysts are looking for. Company managements attributed them largely to greater than expected use of services, notably behavioral health, home health, and high-cost drugs, resulting in cost trends that were not reflected in rates.
Looking Forward
Shortly after the Big Five released their Q4 earnings results, the Congressional Budget Office posted its Budget and Economic Outlook: 2026 to 2036. These estimates, while subject to uncertainty, provide context for the path forward for the Big Five, at least in the near term.
CBO (and the Joint Committee on Taxation) project that the changes to the Medicaid program in the 2025 reconciliation act (H.R. 1) will reduce Medicaid enrollment by 11.4 million and increase the number of people without health insurance by 7.5 million in 2034 (p. 130). The coverage losses will be concentrated in the Medicaid expansion adults, which CBO estimates will decline from 17 million this fiscal year to 15 million in FY 2027, 14 million in FY 2028, 12 million in FY 2029, 11 million in FY 2030 and 2031, then plateau at 10 million through FY 2036.
CBO notes that as the number of Medicaid enrollees has fallen since the end of the PHE continuous eligibility policy in March 2023, there has been a decrease in their average health status, resulting in an increase in costs per enrollee. CBO “expects that payment rates for health plans that manage care for Medicaid enrollees will begin to rise in 2026 to reflect the decrease in the average health status of enrollees.” (p. 117).
Not all of the Big Five managements share this optimism. The UnitedHealthcare CEO, Tim Noel, told financial analysts at UHG’s January 27 earnings call:
“Turning to Medicaid. We continue to expect this business to see incremental pressure in 2026, largely driven by state funding shortfalls. We have received some rate relief but still anticipate the mismatch between rate and acuity to pressure performance in 2026, while we hope for further improvement in 2027.”
Of note, this CEO also expects to lose more Medicaid enrollees this year, even before the implementation of work reporting requirements and 6-month redeterminations on January 1, 2027:
“We expect Medicaid membership contraction of approximately 565,000 to 715,000 people, which includes D-SNP members, due to reduced Medicaid eligibility combined with the exit from one state.”
The Molina Healthcare CEO, Joe Zubretsky offered this perspective at the company’s February 6 earnings call:
“There is little question that Medicaid rates and medical cost trends are imbalanced. We believe our 2026 forecast for Medicaid is the trough for managed Medicaid margins. In this margin trough, we expect that Molina Medicaid will produce a low single digit margin, not losses, and that the market is underfunded by 300-400 basis points. We are confident in the outlook for this business and that rates and trend will eventually reach equilibrium.
Even at this low point in the cycle, we remain optimistic about the future earnings trajectory of the enterprise which is a function of the anticipated rate restoration and future embedded earnings. Of note, we anticipate that actuarial soundness will ultimately prevail as Medicaid rates are restored by state actuarial processes and that will allow us to achieve target margins. This potential is significant as every 100 basis points on the Medicaid MCR is worth nearly $5 per share.”
At Centene’s February 6 earnings call, Sarah London, the company’s CEO, was asked about the implications for margin pressures in Medicaid for the competitive dynamics in states, particularly as they affect smaller MCOs. (Competition in the Medicaid managed care market is of interest to health services researchers as well as financial analysts). Here was her response:
“Relative to competitive dynamics, we are seeing that continued rate pressure is having an impact on different markets and certainly some of the smaller nonprofit plans. And frankly that is an important input into states’ thinking about making sure that they’re funding the program sufficiently so that they have a competitive marketplace and that members have the quality of services that they want and they deserve. And I think over time it’s something that we would watch relative to potential membership growth if competitors choose to exit any of those geographies.”
One issue that did not come up in the earnings calls is the implementation of the H.R. 1 provision prohibiting certain “uniformity waiver” provider taxes, which CBO estimates will reduce federal spending by $34.6 billion over ten years. As our colleague Edwin Park explains, the January 29 CMS rule implementing this prohibition is expected to affect taxes on managed care plans that seven states (CA, IL, MA, MI, NY, OH, and WV) currently use to help fund their share of the cost of their Medicaid programs. Under the rule, the prohibition takes effect either this calendar year or next, depending on when the uniformity waiver in a state’s tax was approved by CMS. This change in financing policy will create a revenue shortfall that will present states, many of which are already financially stressed, with a number of bad options, including raising other taxes, trimming benefits, reducing eligibility, and/or freezing or cutting rates to providers and MCOs. Based on an initial scan, each of the Big Five operates an MCO in at least one of the seven states and several have subsidiaries in more than one, so the fallout from this change may be a topic of discussion in future earnings calls.