Study Reveals UnitedHealth’s Profit Margins Four Times What It Claimed
UnitedHealth Group’s (UHG) profit margins were four times what the health insurance company claimed, a recent study commissioned by Insurance Watchdog Coalition revealed.
Insurance Watchdog Coalition, which aims to “educate Americans and elected officials on the dangers posed by Big Insurance, and work to hold the conglomerates accountable,” released the results of the study on UnitedHealth Group and its claims of earning “relatively low profit margins because they treat premium dollars that are subsequently paid out in medical claims as revenue.”
However, the study, released in August 2026 by economist Nam D. Pham, Ph.D., found that this is wholly disingenuous.
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“When pass-through medical costs (claims reimbursements paid to health care providers that are not retained by the insurer) are excluded from its revenue, UnitedHealth’s operating profit margin averaged 33.0% of gross profit from 2020 to 2025, compared with its average 7.6% net margin,” a press release detailing the results of the study revealed. In other words, that profit margin is four times what it claims.
“UnitedHealth Group obscures its profitability by counting funds used to pay medical claims as revenue,” a summary of the findings asserted, identifying $26.4 billion behind what it describes as the company’s “shell game.”
Pham wrote in the study:
Because these pass-through costs are neither retained by the health insurer nor reflect added value of the business, excluding these pass-through costs from revenues offers a more meaningful reflection of profit margins. This approach mirrors the treatment of other financial intermediaries, such as brokerage firms, which do not report on the value of their clients’ trades as revenue, only the fees they retain for facilitating transactions. When these pass-through costs are appropriately excluded from profit calculations, UHG’s profit margins are comparable to the average among the top ten innovative biopharmaceutical manufacturers, at about
33% of gross profits in 2020-2025. This comparison is striking because these ten biopharmaceutical manufacturers collectively reinvested nearly 52% of operating costs (nearly 35% of their gross profits) into research and development (R&D) to discover new treatments despite significant financial risk, while UHG operates a low-risk, high-volume business model in which 93% of operating costs (more than 62% of gross profit) were devoted to selling, general, and administrative (SG&A) expenses to build a giant healthcare conglomerate, with none of its gross profits invested in R&D.
Pham added that the findings “suggest that common comparisons of profit margins can understate the profitability of health insurers relative to biopharmaceutical manufacturers by failing to account for the large volume of pass-through cost items embedded in insurer revenue.”
This would put UnitedHealth Group’s profit margins in alignment with top pharmaceutical companies in the country.
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The press release detailing the findings said, “According to the study, UnitedHealth’s average annual gross profit from 2020 to 2025 was $79.9 billion, compared with an average of $29.9 billion for the 10 largest U.S. manufacturers by revenue. Operating profit as a share of gross profit averaged 33.0% for both UHG and the biopharmaceutical group over the period.”
The full study can be found here.
These findings coincide with President Trump’s team urging Senate Republicans to focus on health care as part of their midterm election messaging. More specifically, polling on campaign issues found Republicans holding a 46-point advantage when pushing for more transparency in the health insurance industry, including insurers’ profits as well as rejected claims and delays care.
