Evaluating UnitedHealth Group in the List of Best Health Insurance Stocks for 2025

Last updated Feb 9, 2025

TL/DR –

The US health insurance sector is experiencing significant shifts due to the increasing costs of healthcare services, evolving enrollment trends, and technological advancements. The US health insurance market is projected to grow at a CAGR of 3.7% from 2025-2033 to reach a value of $639 billion. UnitedHealth Group Incorporated is considered one of the best health insurance stocks to buy in 2025, with its focus on value-based care and utilization of AI to enhance services and operational effectiveness.

Where UnitedHealth Group Stands in the 2025 Health Insurance Market

UnitedHealth Group Incorporated (NYSE:UNH) is a key player among the 12 Best Health Insurance Stocks to Buy in 2025. With significant changes such as increased healthcare costs, evolving customer trends, and technological advancements defining the U.S. health insurance sector, the market is now valued at $453 billion as of 2024 and projected to reach $639 billion by 2033 (source: IMARC Group).

Government Reimbursement Rates Increase

In January 2025, the U.S. government proposed increased payments to insurers offering Medicare Advantage plans. This could raise payments to private insurance companies by 2.2%, affecting monthly premiums, benefits offered, and insurer profits. Factoring in a 2.1% risk score, the total payment increase could reach 4.3% or over $21 billion.

Medicare Advantage Plans Compete for Contracts

Private health insurance companies will use this new payment rate to bid for Medicare Advantage contracts for 2026. Approximately 65 million people are enrolled in the government’s Medicare program, which caters to those aged 65 and older or who are disabled. Over half of these individuals are enrolled in Medicare Advantage plans.

UnitedHealth Group’s Place in the Health Insurance Sector

To determine the best health insurance stocks to buy in 2025, we considered the largest companies, assessed financial media reports, ETFs, and various online resources, and focused on the top 12 stocks favoured by institutional investors. UnitedHealth Group was among the top contenders based on the number of hedge funds holding stakes in them, according to Q3 2024 data from Insider Monkey’s database of 900 elite hedge funds.

UnitedHealth Group’s Strategy and Investments

UnitedHealth Group’s strategy revolves around value-based care. According to Wedgewood Partners, their value-based care programs focus on preventative care and home visits, leading to better health outcomes and cost reduction. As the U.S. health insurance coverage rate continues to increase, this approach could become the standard of care.

UnitedHealth Group’s Competitive Edge

UnitedHealth Group is leveraging artificial intelligence (AI) to provide customers with the best value care options and enhance operational efficiency. Their focus on AI and strategic investments place them in a strong position in the health insurance sector.

UnitedHealth Group ranks 1st in the list of best health insurance stocks to buy in 2025. For a promising AI stock that trades at less than 5 times its earnings, check out the cheapest AI stock.