Most publicly traded US health insurers are forecast to report sequential revenue and earnings declines for the fourth quarter of 2024, according to an S&P Global Market Intelligence analysis of sell-side analyst forecasts.

Of the nine largest publicly traded US managed care insurers, all but The Cigna Group and Alignment Healthcare Inc. are expected to log decreases in earnings per share.

Coming off a challenging end to 2024, the upcoming earnings season is an opportunity for managed care companies to focus on 2025 expectations and Medicare Advantage growth, according to J.P. Morgan analyst Lisa Gill.

"That does not minimize the importance of fourth quarter results," Gill wrote in a research note. "We expect focus on cost trends in the quarter, which will impact the outlook for 2025 and the ability for each company to hit their margin targets."

UnitedHealth Group Inc., which usually kicks off the earnings season, will be closely watched following the December 2024 murder of UnitedHealthcare CEO Brian Thompson.

In the weeks following Thompson's death, UnitedHealth has come under criticism from the public for its policies and their perceived role in the financial injury of millions of insureds, which may have motivated the man charged with shooting Thompson. The insurer has pushed back, but some investors have also raised concerns about the costs and public health impact of practices that delay or limit care options.

UnitedHealth will hold its earnings call before the market opens Jan. 16.

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An additional headwind for insurers is regulatory efforts targeting pharmacy benefit managers. Pharmacy benefit managers, which several major managed care insurers operate, essentially function as a middleman between insurers, pharmacies and pharmaceutical manufacturers and have come under scrutiny for allegedly inflating healthcare prices.

"We appreciate some investors not wanting to be involved with [managed care companies] without further policy clarity, but we believe that the group is largely being discounted here," Gill wrote. "We believe entering 2025 we will have more clarity around legislative priorities rather than policies shoe-horned into year-end spending bills."

Revenue picture

Though they are projected to fall on a sequential basis, revenues should be up year over year for most companies. Only two of the biggest health insurers are expected to report a decline from the fourth quarter of 2023.

Three of the nine largest managed care insurers — UnitedHealth, Clover Health Investments Corp. and Oscar Health Inc. — are expected to see sequential-quarter growth in revenue. Only Centene Corp. is forecast to record both sequential and year-over-year declines.

UnitedHealth and Oscar Health are expected to log sequential and year-over-year revenue growth.