How are you approaching growth in 2027, particularly in Medicare Advantage given current margins? How are the selling seasons progressing for national accounts and PBM?

For MA, the company expanded its footprint to 94% of eligibles, focusing on DSNP, CSNP, and high-value HMOs for durable growth. National accounts sales are strong, with good persistency and retention. Commercial growth will reflect trend pressures but mid-market selling is strong. PBM is seeing continued strong selling seasons due to transparency and modernization, with external membership growing. “Now more than 94% of American eligibles for Medicare have access to 1 of our plant offerings. That's an expansion year-over-year. We also took a more dynamic approach to the product planning this year. And I think there are some real opportunities for smart durable growth in the marketplace right now.”

Given the commercial business's below 5% margin and stabilization, what is the pacing for margin recovery towards historical high single-digit levels?

Trends are stabilizing but remain high, exceeding historical norms. The company priced for these trends to continue into 2027. Achieving long-term margin objectives for the commercial business will be stretched out due to these utilization pressures. “As we priced for 2027, we took the view that we would see these trends continue and persist into 2027 priced rationally consistent with all of that. As we think about our long-term targeted margins in some of these utilization pressures that we're facing in the commercial business, it is going to stretch out our ability to achieve those long-term objectives and margins for the commercial business.”

Are you seeing medical cost trends accelerate as the year progresses, and how comfortable are you with 2027 repricing based on exit rates?

The company is not seeing trend acceleration. Commercial trends are stabilizing but remain above 11%. Medicaid trends are moderating, and Medicare is performing better than expected. Repricing for 2027 incorporates the latest real-time information on medical cost utilization. “When you kind of go across each of our businesses. We've talked about commercial kind of continuing at the level stabilizing somewhat in more recent durations, but still tracking north of 11% we talked about. We're seeing moderation in trend in the Medicaid business. And we are seeing some better-than-expected performance when you start thinking about the Medicare businesses broadly. But in terms of trend acceleration, no, we are not seeing that.”

UNH

UnitedHealth Group (UNH) Q3 FY26 earnings call: guidance and Q&A

Earnings call· Sep 2026 (Q3 FY26)· Health Care· Oct 13, 2026

Source: earnings call transcript

Executive summary

UnitedHealth Group Q3 FY26 — Strong Performance, AI Integration, and 2027 Growth Confidence

UnitedHealth Group delivered strong Q3 FY26 results, driven by improved execution across Optum and UnitedHealthcare, with significant advancements in AI integration and value-based care. The company is confident in its ability to achieve long-term growth targets, despite persistent elevated medical cost trends in the commercial segment and ongoing investments in modernization. Management highlighted a focus on sustainable organic growth and a positive outlook for FY27, with a comprehensive update expected before year-end.

Highlights

Adjusted EPS of $4.69 in Q3 FY26, up from $2.92 a year ago, reflecting strong earnings quality.
Consolidated medical care ratio improved to 88.4% in Q3 FY26, down from 89.9% last year.
Optum Rx external non-UHC membership now exceeds 50% of total covered lives, indicating strong market resonance.
AI-enabled chart summarization reduced clinician review time by 33% for over 40% of employed clinicians.
Prior authorization reforms are on track to reduce total prior authorizations by 30% by year-end FY26.

Concerns

Commercial business medical cost trends continue to exceed initial expectations of 11%, driven by the No Surprises Act and specialty drugs.
Medicaid core margins are expected to be moderately better than negative 1% for FY26, indicating continued pressure.
Care intensity remains elevated, particularly among senior and complex populations, impacting medical costs.
The No Surprises Act dispute process is leading to excessive arbitration awards, approaching nearly 6% of total medical spend in some regions.
Optum Health's Q4 FY26 performance is expected to reflect normal risk seasonality and additional investments, implying a meaningfully negative quarter.

Guidance & targets

Category	Target	Timeline	Confidence
Adjusted EPS	at least $20.50 high materiality	Full-year FY26	High
Long-term growth rate	13% to 16% high materiality	Long-term	High
FY27 growth rate	lower end of 13% to 16% long-term growth rate high materiality	Full-year FY27	Medium
Debt to capital ratio	approach 40% medium materiality	Year-end FY26	High
Optum Health target margin range	6% to 8% medium materiality	Long-term · FY28	Medium
Medicaid core margins	moderately better than negative 1% medium materiality	Full-year FY26	High
Medicaid margins	rate at margins medium materiality	Year-end FY28	Medium
Medicare Advantage members in 4-plus Star plans	approach 75% of total members medium materiality	Through 2027 and into 2028 · FY28	Medium

Segment performance

Segment	Revenue	YoY	QoQ	Margin
UnitedHealthcare - Medicare Seeing positive momentum. Deliberate decisions made on benefit design and market positioning for 2026 and 2027 to preserve long-term sustainability. Prioritizing high-value HMO, chronic special needs, and dual special needs offerings. Initial Star ratings for 2028 reflect investment in quality and member experience. Members in 4-plus Star plans: approach 75% of total members (by 2028)Medicare-eligible individuals with access to UnitedHealthcare Medicare plan: >94%Medicare-eligible consumers with access to $0 premium MA plan: ~90%Chronic special needs plans available to: nearly 50M individuals	—	—	—	near the top end of 2% to 4% range
UnitedHealthcare - Medicaid Remained stable through the back half of the year. Driving greater operational improvements through network curation and behavioral health program initiatives. Working with state partners to ensure rates reflect acuity and healthcare needs. Expecting margin improvement in FY27 and aspiration to reach 'rate at margins' by end of FY28.	—	—	—	moderately better than negative 1% (FY26 core margins)
UnitedHealthcare - Commercial Performance continues to stabilize. Facing challenging market with medical cost trends exceeding initial expectations, driven by No Surprises Act, clinician intensity, and high-cost specialty drugs. Strong national account sales and persistency. Mid-market selling is strong. Long-term margin objectives will be stretched out due to utilization pressures. Medical cost trends: exceeding initial expectations of 11%	—	—	—	below 5% (risk portion)
Optum Health Continued strong performance in Q3, driven by return to value-based care principles and strong execution. Focused on long-term growth and reaching target margin range. Q4 reflects risk seasonality and additional investments in technology and AI. Online self-scheduling increase: 27% YoYHome health visits increase: 10% YoYPatients served: 20MPatients in fully accountable relationships: 4M	—	—	—	6% to 8% target margin range (by FY28)
Optum Rx Focus on transparency and value alignment. Industry-first affordability, experience, and transparency initiatives resonating. Continued efforts to align pharmacy care with medical care. Genoa expanding behavioral health pharmacy footprint. Specialty pharmacy growing through volume and mix. External non-UHC membership: >50% of covered livesSpecialty pharmacy volumes: up 2.6% for the quarter	—	—	—	—
Optum Insight 2026 is a performance and investment year, with meaningful progress expected in 2027. Investment focus on developing AI solutions to enhance productivity and improve patient/clinician experience. Rationalizing existing products and launching new AI-first products. Strong disciplined execution and new product teams. Optum Integrity One clients implemented: 15 (up from 2 at end of 2025)Optum Integrity One clients implementing: 24	—	—	—	—

UNH operating KPIs by quarter

UNH operating KPIs stated on its earnings calls, by fiscal quarter
KPI	Dec 2024 Q4 FY24	Mar 2025 Q1 FY25	Mar 2026 Q1 FY26	Jun 2026 Q2 FY26	This call Sep 2026 Q3 FY26	Change vs prior quarter
Employees	400K Right now, there are 400,000 nurses, doctors, case workers, customer service specialists, pharmacists, technologists and so many others in this organization who share that commitment and are determined to advance that work. Source: earnings call transcript	400K The growth at UnitedHealthcare and Optum reflects the efforts of our 400,000 colleagues who come to work every day thinking differently about what is possible, advancing new products and ideas while constantly refining existing programs, working to make things better for the people we are privileged to serve. Source: earnings call transcript	—	—	—	0%
Medical care ratio	—	—	83.9% Our reported medical care ratio of 83.9% compares to 84.8% in the first quarter of 2025 as a result of pricing discipline, strong medical cost management and favorable reserve development. Source: earnings call transcript	86.7% Our reported medical care ratio of 86.7% includes $860 million of net favorable prior period medical development, the majority of which is in year development. Source: earnings call transcript	88.4% Consolidated medical care ratio of 88.4% for the quarter compared to 89.9% last year. Source: earnings call transcript	+1.7 pt
Patients OptumHealth	—	—	—	20M OptumHealth is intently focused on improving its clinical care and operational experience to better serve the 20 million people we care for through primary and specialist care, ambulatory surgery and home health. Source: earnings call transcript	20M First is we serve 20 million patients today, about 4 million of those are in fully accountable relationships. Source: earnings call transcript	0%

Operating figures the company stated on at least two of the calls shown, checked against each call's transcript. Click a figure to read the sentence. A dash means it was not stated that quarter.

Deals & partnerships

Anthropic Joining Anthropic Partner Network

Optum Insight recently joined the Anthropic Partner Network to further develop and bring to market healthcare-specific AI solutions.

Microsoft Go-to-market partnership

Optum Insight announced similar go-to-market partnerships with Microsoft in recent quarters across products.

Google Go-to-market partnership

Optum Insight announced similar go-to-market partnerships with Google in recent quarters across products.

Risks & headwinds

Elevated medical cost trends in Commercial business Q3 FY26 and continuing into FY27

exceeding initial expectations of 11%

Mitigation:Appropriate medical management, operational discipline, and pricing rationally for 2027.

Abuse of No Surprises Act dispute process Ongoing

arbitration awards can approach nearly 6% of total medical spend in some regions, translating to billions of dollars in excess costs

Mitigation:Working with policymakers and regulators to ensure the law functions as intended and directs healthcare dollars towards appropriate patient care.

Elevated care intensity Ongoing

particularly among senior and complex populations

Mitigation:Modernizing care management, strengthening clinical engagement, and enhancing operating discipline.

Medicaid funding gap Ongoing through FY26

stubborn gap between funding and medical cost trends

Mitigation:Working collaboratively with state partners to ensure rates appropriately reflect acuity and healthcare needs.

Seasonality and investments impacting Optum Health Q4 Q4 FY26

meaningfully negative fourth quarter implied by EBIT guidance

Mitigation:Additional investments in technology, AI, and workflow improvements for clinicians to ensure long-term performance and expanded access.

What to watch in Q4 FY26

FY27 Growth Rate

Before year-end

Current Lower end of 13% to 16% long-term growth rate as a reasonable starting point

Target Specific FY27 growth guidance

Why it matters

This will provide a more precise outlook for the company's growth trajectory in the upcoming fiscal year.

We would offer that current analyst consensus for 2027 may understate the opportunity ahead, and we see the lower end of our long-term 13% to 16% growth rate as a more reasonable starting point.

Find out whether UNH delivers this. Inve re-checks your case every morning.

Q&A highlights

What is driving the improvement in Medicaid, and are you back to breakeven? Also, what are the current MA margins for 2026?

Medicaid improvement is driven by complex care cost management, network curation, and AI-powered activities, with durable results. Margins are expected to be moderately better than negative 1% for FY26. Medicare MA margins are expected to be near the top end of the 2% to 4% range for 2026 due to recovery actions and cost management.

“given where we pace through 2026, we do now expect to be near the top end of the 2% to 4% range. I would attribute a lot of that to some of the great recovery actions that the team has executed on here throughout the year.”

asked by Justin Lake · answered by Michael Cotton

3 min read 8 chapters

Detailed narrative

Strategic Modernization and AI Integration

UnitedHealth Group is accelerating enterprise modernization by advancing simplified policies, processes, and tools, focusing on integrated value-based care, and building agentic infrastructure. AI-enabled capabilities are being expanded, with chart summarization reducing review time by 33% for over 40% of employed clinicians and AI-enabled information gathering shortening appeal cycle times by 26%.

For the Medicare Advantage annual enrollment period, AI-powered plan recommendations are being introduced to simplify member selection.

Prior Authorization Reforms and Clinician Engagement

The company is on track to implement all previously announced prior authorization reforms by year-end, which will reduce total prior authorizations by 30%, including a two-thirds reduction for individuals under 18. These efforts aim to reduce decision timelines for patients, relieve administrative burden for clinicians, and improve overall experience.

Management emphasized that these are just the beginning of broader efforts to enhance support for clinicians and health systems.

Medicare and Medicaid Performance

UnitedHealthcare is experiencing positive momentum in its Medicare and Medicaid businesses. Medicare Advantage remains a strong choice for seniors, with 94% of eligible individuals having access to a UnitedHealthcare plan and 90% having access to a $0 premium option. The company is prioritizing high-value HMO, chronic special needs, and dual special needs offerings.

Medicaid performance stabilized in the latter half of the year, with efforts to drive operational improvements and work with state partners to address funding gaps.

Commercial Business Headwinds and No Surprises Act Impact

The commercial business continues to stabilize but faces challenges from medical cost trends exceeding initial expectations of 11%. This is primarily driven by the No Surprises Act, increased clinician cost intensity, and high-cost specialty drugs. The company highlighted concerns over the abuse of the No Surprises Act dispute process, where arbitration awards can be significantly inflated, leading to billions in excess costs for consumers and employers.

UnitedHealth Group is advocating for policy changes to ensure the law functions as intended.

Optum Health's Value-Based Care and Growth Opportunities

Optum Health delivered strong Q3 performance, driven by a return to value-based care principles and strong execution in clinical programs. The business is focused on a multi-year journey to achieve a 6% to 8% target margin range by 2028. Growth opportunities include expanding fully accountable relationships, leveraging high-performing service lines like home health and surgery centers, and launching new products such as managing risk across the post-acute continuum.

Optum Rx's Transparency and Integrated Pharmacy Services

Optum Rx continues to focus on increasing transparency and aligning pharmacy services closer to patient care. Over 50% of Optum Rx's membership is now external non-UHC, reflecting market resonance with its transparent supply chain instrumentation. The company is expanding its integrated pharmacy services, including Genoa's behavioral health pharmacy footprint, growing specialty pharmacy, and shifting infusion services to lower-cost, more convenient settings.

Optum Insight's AI-Driven Transformation

Optum Insight is undergoing a multi-year investment and execution journey to simplify healthcare with AI. The business is rationalizing existing products, infusing AI into offerings, and launching new AI-first products. Examples include AI consulting for Medicaid claims adjudication and Optum Integrity One for automating claims scoring, which has grown from 2 to 15 implemented clients since late 2025.

Partnerships with Anthropic, Microsoft, and Google are also driving momentum.

Capital Deployment and Shareholder Returns

UnitedHealth Group's capital deployment priorities remain consistent: reinvestment in the business (organic growth, care delivery, technology, AI), maintaining balance sheet strength, and returning value to shareholders. The company repurchased $5 billion of stock through Q3 and paid $6.2 billion in dividends year-to-date, expecting to exceed $8 billion by year-end. The debt-to-capital ratio was 41.7% at quarter-end, with a target to approach 40% by year-end.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.