UnitedHealth profit rises 75% as its Medicare Advantage rolls shrink by 935,000
The company said pricing discipline and benefit changes cut the share of premiums it spends on care, after it raised prices and trimmed benefits for seniors.
UnitedHealth Group reported Oct. 13 that its third-quarter net earnings rose to $4.11 billion from $2.35 billion a year earlier, an increase of about 75%. Its medical care ratio, the share of premium revenue paid out for members' care, fell to 88.4% from 89.9%, according to the company's earnings release1.
The release attributed the lower ratio to medical cost management, benefit design changes and "pricing discipline." For seniors in its Medicare Advantage plans, those changes have meant higher prices and leaner coverage. Heading into 2026, UnitedHealthcare raised premiums, cut benefits and dropped unprofitable Medicare Advantage plans, and for 2027 it cut hundreds of plans, trimmed benefits and shifted more costs onto members, Healthcare Dive reported3.
The release said the number of people in its Medicare Advantage plans, including programs for complex populations counted in Medicaid, has fallen by 935,000 since the end of 2025. Medicare Advantage enrollment stood at 7.6 million on Sept. 30, down from 8.4 million a year earlier. Revenue from the Medicare and retirement business fell to $42.4 billion from $43.4 billion, which the company tied to changes in membership and product mix.
The company expects to lose more than 1 million Medicare Advantage enrollees in 2026, according to Healthcare Dive. Its cuts fell mostly on traditional plans with broad provider networks, while it favored health maintenance organization (HMO) plans with narrower networks and expanded special needs plans, which typically earn more per enrollee. Bobby Hunter, president of the insurance division, said it was too early to share 2027 membership assumptions.
Part of the quarter's improvement came from an accounting adjustment. UnitedHealth recorded $610 million in favorable reserve development, meaning claims for earlier months of 2026 came in lower than it had set aside, and that helped the medical care ratio, the company reported.
Not every line improved. The UnitedHealthcare business serving employers and individuals lost 165,000 members in the quarter because of employer attrition, the release said. Spending in employer-sponsored plans ran unexpectedly high for the second quarter in a row, driven by aggressive provider billing and rising specialty drug costs, Healthcare Dive reported.
The company also pointed to out-of-network billing disputes. Payouts from arbitration under the federal No Surprises Act make up nearly 6% of UnitedHealthcare's total medical spending in some regions, according to Healthcare Dive. Chief Executive Stephen Hemsley blamed some clinician groups for the payouts and said the company would keep working with policymakers and regulators on the issue.
Elsewhere, the Optum Health care delivery business earned $735 million from operations, up from $41 million a year earlier, while the Optum Rx pharmacy business filled 393 million adjusted prescriptions, down from 414 million, according to the release.
UnitedHealth raised its 2026 forecast to adjusted earnings of at least $20.50 a share, up from a range of $19.50 to $20.00, XTB reported4. It was the company's third guidance increase this year, according to Healthcare Dive.
For seniors, the next deadline is near. Medicare's open enrollment period runs Oct. 15 to Dec. 7, and plan changes made in that window take effect Jan. 1, according to Medicare.gov2. Enrollment counts for 2027 will show whether the company's Medicare Advantage membership keeps shrinking.
.jpg){kind=link}