What UnitedHealth Group (UNH) Said on Its Q3 Earnings Call

Key Points

• UnitedHealth reported strong Q3 results, with $113 billion in revenue and adjusted EPS of $4.69, up from $2.92 a year earlier. The company raised its full-year adjusted EPS outlook to at least $20.50 as its medical care ratio improved to 88.4%.
• Management expressed confidence in returning to its long-term 13%–16% adjusted earnings growth target beginning in 2027, supported by operational improvements, share repurchases, value-based care and AI modernization.
• Medicare Advantage and Medicaid performance improved, while commercial medical costs remained elevated because of higher provider pricing, specialty-drug costs and No Surprises Act arbitration awards. Optum also highlighted growth in value-based care, pharmacy services and healthcare-focused AI products.

UnitedHealth Group NYSE: UNH reported third-quarter 2026 revenue of $113 billion and adjusted earnings per share of $4.69, compared with $2.92 a year earlier, as the healthcare company cited improving execution across UnitedHealthcare and Optum.

The company’s consolidated medical care ratio was 88.4% in the quarter, improving from 89.9% in the prior-year period. Chief Financial Officer Wayne DeVeydt said the company updated its full-year adjusted EPS outlook to at least $20.50, reflecting third-quarter performance and planned investments during the final months of the year.

DeVeydt said UnitedHealth repurchased $5 billion of stock through the third quarter and paid $6.2 billion in dividends year to date, with dividends expected to exceed $8 billion for the full year. Its debt-to-capital ratio was 41.7% at quarter-end, and the company said it remains on track to approach 40% by year-end.

Management Targets Growth in 2027 and Beyond

Chairman and Chief Executive Officer Steve Hemsley said the company’s actions during 2026 have strengthened its confidence in returning to its long-term adjusted earnings growth target of 13% to 16% beginning in 2027. DeVeydt said the lower end of that range was a “more reasonable starting point” than current analyst consensus estimates for 2027.

Management cited enterprise performance improvements, share repurchases, value-based care gains, and AI-driven modernization as prospective tailwinds. The company also expects to make further investments in policy reforms and modernization, particularly at UnitedHealthcare and Optum Insight, while remaining cautious on medical-cost trends and health-benefit funding pressures.

Hemsley said UnitedHealth is simplifying policies, processes, and technology while seeking to expand integrated, value-based care offerings. He said the company has expanded AI-enabled chart summarization to more than 40% of its employed clinicians, reducing chart-review time by 33%. AI-supported information gathering and research has shortened appeal cycle times by 26%, according to Hemsley.

The company also said it expects to complete all previously announced prior-authorization reforms by year-end. Hemsley said the changes are expected to reduce total prior authorizations by 30%, including a two-thirds reduction for people under age 18.

Medicare and Medicaid Results Improve

UnitedHealthcare CEO Tim Noel said Medicare and Medicaid performance showed positive momentum, while the commercial business continued to operate in a difficult but stabilizing cost environment. Demand for care remains elevated, particularly among senior and medically complex populations, he said.

For Medicare Advantage, UnitedHealthcare said it expects to be near the top end of its 2% to 4% margin range in 2026. Bobby Hunter, CEO of Government Programs, attributed the improvement to medical-cost management, recovery actions, and more durable product offerings.

For 2027, UnitedHealthcare plans to prioritize high-value HMO plans, chronic special-needs plans, and dual special-needs plans. The company said more than 94% of Medicare-eligible individuals will have access to a UnitedHealthcare Medicare plan, while about 90% will have access to a Medicare Advantage plan with a $0 premium option.

Hunter said UnitedHealthcare expanded its overall Medicare footprint despite refining some plan offerings, particularly among residual PPO products. He said the company sees growth opportunities in dual special-needs, chronic special-needs, and HMO plans, but will provide formal enrollment guidance later in the year.

The company expects to approach 75% of its Medicare members in plans rated 4 Stars or higher by 2028, compared with what Noel described as a 70% industry average. Hunter said UnitedHealthcare improved nearly every HEDIS and pharmacy-related Stars measure year over year and will continue investing in clinical and pharmacy outcomes.

In Medicaid, CEO Mike Cotton said the company now expects full-year performance to be moderately better than its prior forecasted range. He cited complex-care cost management, network and service curation, member engagement, AI-powered coaching, modernization, and fraud, waste, and abuse efforts.

Still, Cotton said trends remain elevated in behavioral healthcare, specialty pharmacy, home- and community-based services, and inpatient care, though those trends are moderating slightly. UnitedHealthcare expects core Medicaid margins in 2026 to be moderately better than negative 1%, and Cotton said the company aims to return to targeted margins by the end of 2028.

Commercial Costs Remain Elevated

UnitedHealthcare said commercial medical-cost trends are still running above its original expectation of 11%. Noel attributed the pressure to higher costs tied to the No Surprises Act, clinician pricing intensity, and expensive specialty drugs.

Noel said arbitration awards under the No Surprises Act’s independent dispute resolution process can approach 6% of total medical spending in some regions. He said the company supports the law’s consumer-protection purpose but is seeking policy changes to address what it considers excessive awards, administrative costs, and dispute volumes.

Management said commercial trends have stabilized but remain well above historical levels. Noel said the company used current utilization and cost information in pricing for 2027 and is not seeing the accelerating trends referenced by one analyst during the call.

Brandon Cuevas, CEO of UnitedHealthcare’s commercial business, said the company had a strong national-account selling season and expects high group retention heading into 2027. He also cited continued strength in its Surest offering and mid-market pipeline.

Optum Emphasizes Value-Based Care, Pharmacy and AI

Optum CEO Patrick Conway said Optum Health delivered strong third-quarter performance through a return to value-based care principles, clinical-program execution, and operational improvements. Optum Health reported a 27% year-over-year increase in online self-scheduling and a 10% increase in home-health visits.

Krista Nelson, CEO of Optum Health, said the business serves 20 million patients, including roughly 4 million in fully accountable relationships. She identified further opportunities in professional capitation, shared savings, home health, hospice, surgery centers, and post-acute care programs. The company continues to target an Optum Health margin range of 6% to 8% by 2028.

Nelson said fourth-quarter Optum Health results will reflect normal risk seasonality and further investments in technology and clinician workflows, including AI-enabled care summaries, ambient documentation tools, scheduling, and expanded access capabilities.

At Optum Rx, Conway said more than 50% of membership is now from external, non-UnitedHealthcare customers. Jon Mahrt, CEO of Optum Rx, said client retention is in the high 90% range and that transparency initiatives are supporting sales momentum. He said specialty pharmacy volume rose 2.6% in the quarter, even as total volumes declined 5%.

Optum Insight is investing in healthcare-specific AI products, according to CEO Sandeep Dadlani. He said its Integrity One claims-coding product expanded from two clients at the end of 2025 to 15 implemented clients, with another 24 in implementation. Management said Optum Insight’s remediation work is largely complete and that it expects meaningful progress in 2027, with accelerating growth targeted for 2028 and beyond.

About UnitedHealth Group (NYSE:UNH)

UnitedHealth Group Incorporated NYSE: UNH is a diversified health care and well-being company serving individuals, employers, health care providers and government programs. Its operations are organized primarily through UnitedHealthcare and Optum.

UnitedHealthcare provides health benefit plans and services, including employer-sponsored coverage, individual and family plans, Medicare and Medicaid offerings, and other government-supported programs. Its services include health insurance administration, pharmacy benefits and care management.

Optum provides health care services, technology and data solutions, pharmacy services, and analytics to health plans, employers, government agencies, health care providers and consumers.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.