UnitedHealth Group raised its 2026 profit forecast on Tuesday, even as 935,000 members have left its Medicare Advantage business since the end of 2025 and another 85,000 dropped off its Medicaid rolls. The company now expects adjusted profit per share of at least $20.50 this year, up from its previous forecast of at least $19.50 to $20 and above analysts' estimate of $19.86, according to LSEG data.
The numbers were strong. UnitedHealth earned $4.69 per share on an adjusted basis in the third quarter, up from $2.92 a year earlier and well above the average analyst estimate of $4.14. Revenue reached $112.69 billion, topping expectations of about $111.4 billion. Operating income climbed to $6.6 billion from $4.3 billion a year ago. Shares rose 2.1% to $386.61 in early trading.
Where the Savings Came From
The company credited what it called restrained medical-cost spending. Its medical cost ratio—the share of insurance premiums spent on actual medical care—fell to 88.4% from 89.90% a year earlier. UnitedHealth attributed the improvement to plan design and new product pricing. It also exited some health insurance products this year.
A $610 million reserve benefit helped as well, reflecting lower-than-expected claims for services provided earlier this year. Revenue at UnitedHealthcare, the insurance arm, actually fell to $86.3 billion from $87.1 billion. Yet earnings from operations and profit margins rose. The company credited benefit changes, pricing, and controls on medical and operating costs.
Mizuho analyst Ann Hynes called it a solid quarter. "The real highlight was the continued durability of the margin recovery story," she said.
Who Is Affected
Behind the margin story are people. UnitedHealthcare runs Medicare Advantage plans for adults 65 and older and Medicaid plans for low-income Americans on behalf of state governments. Employer-sponsored plan membership fell by 165,000 through attrition. Another 85,000 people left Medicaid rolls because of eligibility changes. And 935,000 members have exited Medicare Advantage since the end of 2025.
The filing doesn't say where those members went or what coverage they have now. It does show that shrinking the book of business, trimming benefits and repricing products made the company more profitable. For seniors and low-income families on those plans, benefit changes and product exits carry real consequences.
Looking Ahead to 2027
Chief Financial Officer Wayne Deveydt told investors the company is targeting the lower end of its long-term growth-rate projection of 13% to 16% for 2027, calling that a "reasonable starting point." He went further: "Current analyst consensus for 2027 may understate the opportunity ahead," he said. Wall Street analysts currently estimate earnings of $22.61 per share next year.
The recovery follows a rough stretch. UnitedHealth has spent the past two years in turnaround mode after one of the industry's biggest cyber attacks, missed financial targets and a forced withdrawal of its outlook. After missing estimates last year, it named new top executives. The company also reeled from the killing of a top executive outside its investor meeting in New York nearly two years ago.
Optum Health, the clinical unit, drove much of the improvement. UnitedHealth said technology investments, including in artificial intelligence, reduced the overall costs of providing medical services. Optum also exited less favorable contracts for certain health plans that had weighed on first-quarter earnings. Last year, the company said Optum faced regulatory and cost challenges that represented an $11 billion blow to the unit over three years.
Why This Matters:
UnitedHealth is one of the country's largest health insurers, and it sits at the center of how Medicare Advantage and Medicaid work in practice. When a company this size improves margins by exiting products, changing benefits and shedding members, older adults and low-income families who rely on those plans feel the effects. The earnings report shows a company telling investors its 2027 outlook could beat expectations, while nearly a million seniors have left one of its core businesses in under a year. That gap raises a question for regulators and state Medicaid agencies: how much of the profit recovery comes from efficiency, and how much from covering fewer people or covering them less generously? Public programs pay these premiums, so the answer matters to taxpayers and enrollees alike.