Repricing within UnitedHealthcare is on track to drive solid operating earnings growth from margin improvement within that business in 2026. Even so, I'm confident we will return to solid earnings growth next year, given the operational rigor and more prudent pricing. While we are still finalizing 2026 plans and intend to share full guidance with you in January, our current analyst consensus captures a likely stepping-off point for next year. We intend to balance our earnings growth ambitions in 2026 with investments and actions that will drive higher and sustainable double-digit growth beginning in 2027 and advancing from there.
Our longer-term outlook will be refreshed as we continue to execute over the next year. Medical cost trends remain historically high but consistent with our second quarter guidance, and we expect that to continue throughout the remainder of 2025. Taken together, these actions position each of our businesses on a clear path towards margin growth in 2026, with the exception of Medicaid, which I will discuss in a moment. We forecast a full-year 2025 trend of approximately 7.5% in Medicare Advantage, consistent with our previous expectations.
Our plan for next year reflects a conservative path focused on margin growth. Turning to commercial, we are focused on pricing and cost management efforts to support 2026 margin recovery. We expect the vast majority of our employer insurance businesses to be repriced for 2026 and to return to our normal margin range in 2027. These actions should drive margin improvement in our employer and individual segment in 2026, though still below our targeted 7% -9% range.
| Metric | Period | Current guidance |
|---|---|---|
| 2026 EPS | FY2026 | comfortable with current analyst consensus (formal guidance in January) |
| Operating cash flow | FY2025 | $16 billion (~1.1x net income) (reaffirmed) |
| Medicare Advantage membership | FY2026 | contraction of approximately 1 million (individual and group) |
| Medicare Advantage medical trend | FY2025 / FY2026 | ~7.5% in 2025; priced at 10% for 2026 |
| ACA enrollment | FY2026 | decline by approximately two-thirds |
| Optum Health margin | FY2025 | just under 3% (value-based care under 1%) |
| V28 headwind | FY2026 | more than $6 billion enterprise, roughly half offset |
| Debt-to-capital ratio | H2 2026 | trend closer to 40% (improving) |
| Q4 restructuring charge | Q4 2025 | non-GAAP, substantially non-cash, low single-digit billion dollars (preliminary) |
| Metric | YoY | Note |
|---|---|---|
| Adjusted EPS | $2.92, slightly ahead of expectations | steady execution while working through longer-term improvement plans |
| Revenues | +12% to over $113 billion | domestic membership expansion of over 780,000 lives year-to-date |
| Medical care ratio | 89.9% vs 85.2% a year ago | historically high but expected medical cost trends aligned with 2026 pricing |
| Operating cost ratio | 13.5% | larger-than-planned investments including >$450 million in employee incentives and Foundation contributions |
| Operating cash flow | $5.9 billion (2.3x net income) | strong cash generation and a 1.7-day sequential rise in days claims payable |
| Debt-to-capital ratio | 44.1%, roughly stable | cash-efficiency actions offset by the $3.4 billion net Amedisys disbursement |
| Topic | Previous mention | Current period | Trend |
|---|---|---|---|
| Medicare Advantage medical trend | 2Q guidance of ~7.5% | ~7.5% full-year 2025, 10% assumed for 2026 | Stable but elevated |
| Optum Health value-based care restructuring | issues identified in Q2 | ~90% of payer contracts done, ~10% VBC membership decline and 200,000 exits planned for 2026 | In progress |
| Optum Insight and AI | needs investment | Optum Real, Integrity One and Crimson AI launched with strong productivity/ROI metrics | Investing |
| Capital deployment | paused in Q2 | still paused; may reinstate buybacks and M&A in H2 2026 | Pending |
| Medicaid | rate-to-acuity mismatch | expected to extend through 2026 with declining margins | Pressured |
| Portfolio and international reshaping | — | reducing international footprint, realigning Optum Financial, quantifying a Q4 charge | Reshaping |