Healthcare Facilities & Managed Care "1Q26 MCO Recap: Strong Start Fueled ..."

Research evidence excerpt

Healthcare Facilities & Managed Care "1Q26 MCO Recap: Strong Start Fueled ..."

Global Research

22 May 2026ab

Healthcare Facilities & Managed Care Equities

Americas1Q26 MCO Recap: Strong Start Fueled By

Seasonality; More Signs of Cost Trend Stabilizing Healthcare Providers

AJ Rice

Analyst

aj.rice@ubs.com

Still Early In The Year But Industry Indicates Confidence +1-212-713 4299

First quarters typically track to company expectations as the industry generally does not Jonathan Yong

have sufficient claims data to make meaningful changes in their underlying Analyst

assumptions, particularly in instances where there has been a significant shift in jonathan.yong@ubs.com

enrollment. Nevertheless, a majority of MCOs this quarter felt confident enough to +1-212-713 6268

increase their guidance this quarter. The size of the raises was directly tied to the beat in Michael Wei

1Q, which saw favorability from a lower respiratory season (less flu Y/Y) and general cost Associate Analyst

trend seasonality (weather). The industry remained cautious with respect to the rest of michael.wei@ubs.com

the year, but several companies signaled that if underlying business trends continue to +1-212-713 2565

perform better than expected, there will likely be further upside. James Kurek

Recovery in Government Businesses Showing Positive Indications james.kurek@ubs.com

While the 4Q25 earnings season was preceded by disappointing news on the 2027 +1-212-713 3704

Advance Notice, the 1Q26 earnings season started with improved sentiment following Joseph Overman

the meaningful increase in the final MA rate notice. The quarter itself was not Associate Analyst

significantly different than expectations for MA. However the favorable rate notice joseph.overman@ubs.com