UnitedHealth Group reported a second-quarter net profit of $5.48 billion, helped by lower medical costs and stronger performance in its Optum health services business. The company also raised its 2026 profit forecast, saying it expects better financial performance for the rest of the year because it has been controlling medical expenses.
Optum business shows strong growth
Overall health plan membership also declined. UnitedHealthcare covered about 48.5 million people in the second quarter compared with 49.8 million at the end of 2025. Membership also fell by around 525,000 people compared with the end of the first quarter of 2026. The company said many of these membership losses came after it stopped offering insurance in less profitable markets, including some Obamacare plans and Medicare Advantage areas.
Reuters said the company had earlier warned that Optum could face about $11 billion in regulatory and cost-related pressure over three years, making the latest improvement an important step in its recovery. Forbes noted that medical cost ratios across the health insurance industry have been rising because more patients are seeking treatment after delaying care during the pandemic.
UnitedHealth’s medical cost ratio has now stayed below 90% for two straight quarters, which is considered healthier for insurers. Forbes also said UnitedHealth’s 86.7% medical cost ratio was better than rival Elevance Health’s 89.7% benefit expense ratio reported this week. Health insurers including UnitedHealthcare, Aetna, Humana and Elevance Health have all been trying to reduce rising medical expenses, especially for older adults enrolled in Medicare Advantage plans.
Company Performance
The company also reported a strong rise in profit for the second quarter. Net income increased to $5.48 billion, or $6.04 per share, from $3.4 billion, or $3.74 per share, in the same quarter last year. Total revenue rose slightly to $112.03 billion, up from $111.6 billion a year ago. The growth was mainly driven by its Optum health services business and some UnitedHealthcare insurance plans. UnitedHealth’s revenue was also higher than analysts’ estimate of about $111 billion.
UnitedHealthcare, the company’s insurance business, reported revenue of $86 billion, almost unchanged from $86.1 billion a year earlier. The company kept its overall 2026 revenue forecast unchanged at $439 billion, DeVeydt said. Higher insurance costs caused some customers to leave the company’s health plans, especially people buying coverage through the Obamacare marketplace, according to Reuters.
This marked a turnaround after the first quarter, when Optum’s operating income had fallen 15% to $3.3 billion. DeVeydt said new artificial intelligence tools introduced this year reduced paperwork and allowed doctors to spend more time treating patients. DeVeydt said, “We said, with Optum Health, this would be a multi-year journey to return to historical growth levels and margins”, according to Reuters. He added: “I would say we are ahead of schedule in year one.” DeVeydt said he expects Optum’s revenue growth to fully return by 2028.
Competitor Comparison
Chief Executive Officer Stephen Hemsley returned to lead UnitedHealth last year after the company faced several major challenges. Those challenges included missing financial targets, a nationwide ransomware attack, and the killing of a top executive outside an investor meeting. Since returning, Hemsley has reshaped the company. He has replaced about half of the senior leadership team, exited some insurance products and committed $1.5 billion to artificial intelligence investments.
2026 profit forecast raised
UnitedHealth now expects to earn between $19.50 and $20 per share in 2026. Earlier, the company had expected to earn at least $17.75 per share. Wall Street analysts had expected earnings of about $18.47 per share, so the company’s new forecast is higher than expected.
Overall, UnitedHealth’s strong profit growth, lower medical costs, improved Optum performance and higher 2026 earnings forecast suggest the company is making progress in improving its financial performance
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Investors welcomed the results. UnitedHealth shares rose nearly 5% in premarket trading after the earnings announcement, according to Reuters. On an adjusted basis, UnitedHealth earned $6.38 per share in the second quarter. This was much higher than analysts’ average estimate of $4.90 per share, according to LSEG data.
Chief Financial Officer Wayne DeVeydt said the company also saved money by keeping medical costs under better control in its Medicare Advantage plans. He added that higher government payments for Medicaid plans serving low-income Americans also supported second-quarter earnings. DeVeydt said, “These results are not a reflection of a trend bending or coming under control, but rather our efforts to start pushing down what is already an elevated number”, according to Reuters.
The company spent a smaller share of insurance premiums on medical care. Its medical cost ratio was 86.7%, down from 89.4% a year ago. The 86.7% medical cost ratio was also better than analysts’ expectation of 88.47%, according to LSEG data. A lower medical cost ratio is good for health insurers because it means they are spending less of their premium income on patient care.
UnitedHealth said the lower medical cost ratio was driven by better pricing, changes in insurance plans, improved customer mix and stronger medical cost management. The company is still dealing with high medical costs. He said the latest results do not mean the problem has ended but show the company’s efforts to reduce expenses are working, DeVeydt said, according to Reuters.
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DeVeydt said the end of extra pandemic-era government subsidies made Obamacare plans more expensive for many customers, leading to lower enrollment. UnitedHealthcare expects about 500,000 people to leave its Obamacare plans during 2026, DeVeydt said, according to Reuters.
UnitedHealth has reduced some Medicare Advantage offerings for older adults as part of its strategy to improve profitability. Optum, the company’s health services business, showed strong improvement during the quarter. Operating income rose 29% year over year to $4 billion, according to Reuters. The improvement came because Optum Insight, the technology business, performed better and Optum Health improved access to patient care.
