UnitedHealth Reports $3.4 Billion Profit And Sees 2026 Earnings Growth

UnitedHealth Group profits fell to $3.4 billion in the second quarter as the giant provider of health benefits and services grapples with rising costs of providing health insurance to millions of Americans.

But the company, which brought back Stephen Hemsley to be chief executive officer earlier this year, says the “company expects to return to earnings growth in 2026.”

In May, UnitedHealth Group suspended its financial outlook for the rest of the year and replaced its top executive, Andrew Witty, as the parent of the giant health insurance company UnitedHealthcare grapples with rising healthcare costs in its Medicare Advantage business.

Medicare Advantage plans contract with the federal government to provide health benefits to seniors. Across the health insurance industry, executives have said seniors have a pent up demand for care and treatments and are returning for surgeries and procedures delayed during the Covid-19 pandemic.

On Tuesday, UnitedHealth updated its 2025 outlook, which includes revenues of $445.5 billion to $448 billion, net earnings of at least $14.65 per share and adjusted earnings of at least $16 per share. The new outlook, which fell below what some analysts were forecasting, “reflects first half 2025 performance and expectations for the remainder of the year, including higher realized and anticipated care trends,” the company said.

“UnitedHealth Group has embarked on a rigorous path back to being a high-performing company fully serving the health needs of individuals and society broadly,” Hemsley said in a statement accompanying the earnings report. “As we strengthen operating disciplines, positioning us for growth in 2026 and beyond, the people at UnitedHealth Group will continue to support the millions of patients, physicians and customers who rely on us, guided by a culture of service and longstanding values.”

UnitedHealth, which has more than 50 million health plan subscribers under its UnitedHealthcare health insurance business, is seeing rising costs among health plan members in all three government-subsidized benefits it helps manage: Medicaid, Medicare Advantage and individual coverage under the Affordable Care Act, also known as Obamacare.

“While we face challenges across our lines of business, we believe we can resolve these issues and recapture our earnings growth potential while ensuring people have access to high-quality, affordable health care,” UnitedHealthcare chief executive officer Tim Noel said in a statement accompanying UnitedHealth’s earnings report.

In the company’s second quarter, UnitedHealthcare’s “consolidated medical care ratio of 89.4% increased 430 basis points year-over-year.” That compares to 85.1% in the year earlier period and well below the ratio in the lower 80th percentile where health insurers like to be.

The increase in the medical cost ratio, which is the percentage of premium that goes toward medical costs, “was primarily due to medical cost trends which significantly exceeded pricing trends, including both unit costs and the intensity of services delivered, and the ongoing effects of Medicare funding reductions,” the company said.

UnitedHealth’s cost struggles are among the parade of health insurance companies that have struggled in the last two years to control costs of subscribers in plans subsidized by the government.

Just last week, Centene reported a rare quarterly loss as the provider of government-subsidized benefits struggles to manage costs of its health plan members. And earlier this month, Elevance Health, which sells Blue Cross and Blue Shield plans in 14 states, lowered its profit forecast for the rest of 2025 due to rising costs in its Medicaid plans and individual policies it sells under the ACA.

In addition, Molina Healthcare lowered its earnings guidance for the rest of the year in the face of cost pressures in all three of the government-subsidized health insurance programs it helps manage.

Medicare Advantage plans also contributed to struggles last year for Humana and CVS Health, which elevated a new chief executive in part to help gain control of its struggling Aetna health insurance business. CVS is also exiting the individual health insurance business, leaving about 1 million Aetna members in 17 states looking for new coverage in 2026.

Despite a new financial outlook that missed Wall Street’s expectations, UnitedHealth’s total revenues rose to $111.6 billion in the quarter from $98.8 billion in the year-ago period. Net income was $3.4 billion, or $3.74 a share, compared to $4.2 billion, or $4.54 a share in the year ago quarter.

UnitedHealth, which operates the healthcare services business Optum, acknowledged the giant provider of health services, including pharmacy benefits has also “not met expectations.”

Full year 2025 revenues for Optum Health, which includes an array of medical care provider assets that include outpatient clinics, surgery centers and doctor practices, “are expected to be $101.1 billion to $101.6 billion, a decline of 4% over 2024,” the company said.

“We are refocused on fundamental execution to ensure we meet our potential to help make the health system work better for everyone,” said Dr. Patrick Conway, Optum’s chief executive officer.