Elevance Health slashed its 2025 adjusted earnings target to roughly $30 a share from as much as $34.85 after second-quarter results showed higher-than-expected medical costs in Affordable Care Act plans and slower reimbursement growth in Medicaid. The Indianapolis-based insurer reported adjusted EPS of $8.84 on operating revenue of $49.42 billion, missing profit estimates but beating on sales. It now expects its full-year medical loss ratio to approach 90%. Shares fell as much as 11% on 17 July. The warning extends a string of setbacks for U.S. managed-care companies. On 2 July, Centene withdrew its 2025 outlook entirely, citing new risk-adjustment data that point to a $1.8 billion hit to marketplace revenue and a $2.75 reduction in next-year EPS. The announcement erased up to 38% of Centene’s market value in its steepest one-day decline since 2006 and triggered selling across the sector. Mounting utilisation and drug expenses are feeding through to consumer prices. Early state filings compiled by health-policy research group KFF show ACA insurers are requesting a median 15% premium increase for 2026—the sharpest proposed hike since 2018—as carriers brace for the expiry of enhanced federal subsidies and persistent cost inflation. Legal and regulatory pressures are adding to the strain. A federal judge in Texas on 18 July dismissed Humana’s bid to overturn cuts to its Medicare Advantage star ratings, jeopardising billions of dollars in quality-based bonus payments. Humana’s shares fell about 3%, while peers including UnitedHealth, CVS Health and Cigna also traded lower. Taken together, the profit warnings, premium-hike requests and courtroom loss underscore the worsening operating environment for U.S. health insurers as higher morbidity, rising prices for drugs and medical services, and shifting federal policies squeeze margins.