UnitedHealth Group has reported third-quarter earnings ahead of Wall Street expectations and raised its full-year profit forecast, despite continued pressure from high medical costs.
The US healthcare group said it now expects adjusted earnings of at least $20.50 per share for 2026, up from its previous forecast of between $19.50 and $20. Shares rose by about 3% in pre-market trading.
UnitedHealth reported adjusted earnings of $4.69 per share for the quarter, compared with analysts’ estimate of $4.14. Revenue was $112.69 billion, ahead of the $111.40 billion expected.
Net income rose to $4.11 billion, or $4.56 per share, from $2.35 billion, or $2.59 per share, a year earlier. Revenue was slightly lower than the $113.16 billion recorded in the same quarter last year.
The company said both its UnitedHealthcare insurance arm and Optum healthcare division exceeded operating earnings expectations.
UnitedHealth has been seeking to stabilise its margins by reducing membership, withdrawing from unprofitable contracts and increasing investment in value-based care and artificial intelligence.
Wayne DeVeydt, the company’s chief financial officer, said: “You’ll see in the quarter that we continue to execute not only on the financial aspects of our business, but really doing them with a simpler approach and an approach that’s really focused on investing heavily in value-based care.”
UnitedHealth medical costs remain elevated
UnitedHealth’s medical cost ratio, which measures medical expenses against premiums collected, was 88.4% in the third quarter. That was below the 89.9% analysts had expected, with a lower figure generally indicating stronger profitability.
However, Mr DeVeydt said medical costs remained above historical levels, particularly for inpatient services and specialty medicines used to treat cancer and rare diseases.
He said the independent dispute resolution process established under the No Surprises Act was adding at least one percentage point to total medical costs. The process allows insurers and providers to settle disagreements over payments for out-of-network treatment.
Mr DeVeydt said the higher claims costs could ultimately be passed on to consumers through increased premiums. He added: “I think it’s something we should keep an eye on. I think you’ll see that our medical care ratio has improved quite a bit, but I don’t want that to be misleading in terms of [medical cost trends].”
UnitedHealth said its value-based care programmes were helping to manage costs by directing patients towards appropriate providers and placing greater emphasis on preventive treatment. Acute hospital admissions among its members fell by 15% year on year through the third quarter, while home health admissions increased by 10%.
Mr DeVeydt said the company was also introducing artificial intelligence-powered ambient listening tools to reduce doctors’ administrative workload. Patient-led appointment scheduling rose by 27% over the same period.
He said the initiatives were expected to have a cumulative impact on medical cost management during the fourth quarter and into 2027 as they expanded.
