Our second quarter results and updated full year 2026 outlook demonstrate continuing progress toward delivering more consistent and dependable performance. The pricing, benefit design, and market actions we've taken over the past year have been central in supporting our second quarter results and improved full-year outlook. We now expect full-year Medicare Advantage enrollment to decline by approximately 1.1 million and Medicare margins to finish 2026 above 3%. We will continue to support program and margin stability through actions including benefit adjustments and selective changes in market participation.
At this distance, commercial margin recovery will remain a focus area longer than originally anticipated. Second, home health initiatives to better support patients as they return home, where they can be managed more comfortably and effectively, have reduced readmissions. I will briefly review second quarter results, discuss expectations for the remainder of the year as we refresh our 2026 guidance. Overall, the quarter and full-year outlook reflect improved performance across our businesses, with notable improvements in UnitedHealthcare and Optum Health.
UnitedHealth Group reported adjusted earnings per share of $6.38, compared to $4.08 in the prior year. Total revenues were $112 billion, largely consistent with the prior year, while operating earnings of $8 billion grew 55% year-over-year. Operating cash flows in the quarter were approximately $11 billion, or 1.9x net income, reflecting timing of substantial government payments and strong earnings. This provides capital to strengthen the balance sheet, invest in growth, and return value to shareholders.
| Metric | Period | Current guidance |
|---|---|---|
| Full-year adjusted EPS | FY2026 | $19.50-$20.00 (slightly more earnings in Q3 than Q4) |
| UnitedHealthcare operating earnings | FY2026 | at least $12 billion (raised) |
| Optum Health operating earnings | FY2026 | at least $2.2 billion (raised) |
| Full-year medical care ratio | FY2026 | 88.1% +/- 25 basis points |
| Full-year share repurchases | FY2026 | at least $5 billion |
| Medicare medical cost trend | FY2026 | expected below ~10% (point estimate to be updated next call) |
| Medicaid margins | FY2026 | -1% to -1.7% (remain pressured) |
| Long-term EPS growth algorithm | long-term | 13%-16% reaffirmed from the $19.50-$20.00 stepping-off point |
| Metric | YoY | Note |
|---|---|---|
| Adjusted EPS | $6.38 (from $4.08) | Product and portfolio actions over the prior 12 months plus more focused management disciplines. |
| Total revenue | $112 billion (~flat) | Broadly consistent with the prior year across the enterprise. |
| Operating earnings | $8 billion (+55%) | UnitedHealthcare and Optum Health improvement from portfolio actions and management disciplines. |
| Medical care ratio | 86.7% (from 89.4%) | Pricing/benefit actions plus $860M of net favorable prior-period development. |
| Medicare Advantage | margins to finish above 3% | Better retention, disciplined benefit design, network curation and a favorable respiratory season. |
| Commercial benefits | cost trend modestly above 11% | IDR/No Surprises Act exploitation and higher provider coding intensity. |
| Operating cost ratio | 12.7% (from 12.3%) | Targeted investments in technology, AI, care delivery and the United Health Foundation. |
| Operating cash flow | ~$11 billion (1.9x net income) | Timing of government payments and strong earnings. |
| Debt-to-capital | 41.2% (from 44.1%) | Capital discipline; on track to ~40% by year-end. |
| Topic | Previous mention | Current period | Trend |
|---|---|---|---|
| Turnaround / earnings reset | 2024-2025 challenges | One year into Hemsley's return and team restructuring, management describes stronger, more consistent performance disciplines, calls the $19.50-$20.00 base durable quality of earnings, and reaffirms the 13-16% long-term growth algorithm off that stepping-off point. | — |
| Medicare Advantage trend & bids | ~10% 2026 trend assumption (7.5% core + fee schedule + unknowns) | Trend running below planning assumptions (favorable claims, lighter flu/respiratory season, unused risk accommodation) but not an inflection; 2027 bids planned off current experience with no meaningful deviation from elevated core trend. | — |
| Commercial cost-trend pressure | ~11% trend, margin recovery by 2027 | Trend modestly above 11%; ineffective IDR (40% of claims ineligible, 60% of arbitration from five entities, arbiter awards averaging 11x Medicare up to 30x) plus provider coding intensity extend margin recovery past 2027 toward the historic 7%+ target. | — |
| Optum Health value-based care re-centering | Restructuring | Improved care management (transitions-of-care cutting hospitalizations ~10%, home-health and rural expansion), regional/national operating focus, ambient-listening AI at 70% of employed providers (>90% by year-end), and earlier 2027 payer benefit-planning collaboration; margins expected to steadily improve. | — |
| Optum Rx transparency | Rebate pass-through commitment | New monthly per-member-fee model with full PBM/GPO fee transparency; high-90s retention; 95%+ of clients on 100% rebate pass-through by end 2026, ahead of the end-2027 commitment. | — |
| AI as enterprise operating infrastructure | Early AI investment | Reimagining the entire enterprise: near-100% of provider/consumer interactions use AI, complex-claims automation, 96% first-pass digital prior-auth approval (humans decide denials), ambient documentation cutting clinician burnout ~90%, and commercializing internal use cases via Optum Real (~half a million prior auths processed); benefits accelerating into 2027-2028. | — |
| Prior-authorization / experience modernization | High administrative burden | Committed to eliminating 30% of prior-auth volume and nearly two-thirds of pediatric prior-auth requirements by year-end, and processing 80% of prior auths in real time by end-2027, reducing abrasion for providers and patients. | — |
| Medicaid & Optum Insight | Rate lag / reinvestment | Medicaid working with states to close the rate-vs-trend gap (early behavioral-health improvement) with margins still pressured; Optum Insight slightly ahead in Q2 (AI efficiencies plus pulled-forward client volume) on a multi-year reinvestment path with full-year guidance intact. | — |