UnitedHealth Group

UnitedHealth Group sells health insurance plans through UnitedHealthcare. This includes Medicare Advantage plans for older adults, and group health plans for employers. Optum, the company's other segment, runs pharmacy benefit management, physician clinics, and health data services. The company earns money mainly from insurance premiums, and from fees for Optum's services.

UnitedHealth's 2025 cost spike, mainly in Medicare Advantage, forced a guidance withdrawal and a CEO change. It left the market pricing the stock as though the business is still troubled. The medical care ratio has improved in 2026. In the third quarter, it was 88.4%, down from 89.9% a year earlier, and management raised its 2026 adjusted EPS guidance to at least $20.50.

But favorable reserve changes for earlier months of 2026 helped both the second and the third quarter, by $860 million and $610 million. Commercial medical cost trend is also above 11%, more than the company first expected. The case for a re-rating rests on the ratio staying low without such help. It also rests on the outcome of the Department of Justice's investigation into Medicare Advantage billing.

A large fine or a forced change to risk-coding practices would cut future revenue. A resolution with limited financial impact would remove a source of negative attention that has weighed on the stock since 2025. New management is also bringing partners into weak clinic businesses, such as a partnership with TPG for Florida clinics that became public in September 2026. On October 1, 2026, it removed about 1,700 prior-authorization codes, which it calls about 30% of its requirements.

For 2027, it also ends Medicare Advantage plans with about 390,000 members, to leave less profitable markets. These steps are meant to show the business model still works without the practices under scrutiny. Management plans to give its 2027 outlook before the end of 2026. It said that the low end of its long-term target of 13% to 16% yearly growth in adjusted EPS is a reasonable start for 2027.

The full-year 2026 results, expected in January 2027, will show whether the ratio holds without reserve help. If the 2027 outlook confirms that growth, and the DOJ matter resolves without a severe penalty, the discount can close over the next two to four quarters. If a large fine or forced billing changes arrive instead, the market's caution would prove correct, and the stock could stay discounted well into 2027.

1. Oct 13, 2026Failed

   Q3 2026 results: medical care ratio trendA medical care ratio below the year-earlier 89.9% and in line with the full-year guide of about 88.1%, without large favorable reserve changes, and confirmed or raised guidance pass; a ratio above the guide or a guidance cut fails.Outcome: The ratio fell to 88.4% from 89.9% and management raised its 2026 adjusted EPS guidance to at least $20.50, but the ratio was above the guide of about 88.1% and $610 million of favorable reserve changes helped the quarter.
2. Dec 2026 · est.Pending

   2027 earnings outlookAn outlook for 2027 adjusted EPS growth at or above the low end of the 13% to 16% long-term target passes; growth below that range or new reserve charges fail.
3. Jan 13, 2027 · est.Pending

   Q4 and full-year 2026 results: medical care ratio without reserve help2026 adjusted EPS of at least $20.50, debt to capital near 40%, and little help from favorable reserve changes pass; new reserve charges or adjusted EPS below $20.50 fail.
4. 2027 · est.Pending

   Department of Justice Medicare Advantage billing investigation outcomeA settlement with a fine the company can pay from one quarter of cash flow and no forced change to risk coding passes; a large fine or forced coding changes fail.

Every passed and failed checkpoint across all picks

UnitedHealth borrows at the parent holding company, mostly through senior unsecured notes, but most of its cash sits in regulated insurance subsidiaries. These subsidiaries must keep minimum statutory capital and need state approval for large dividends. Read more

• The Department of Justice has criminal and civil investigations into UnitedHealth's Medicare Advantage billing practices, which the company confirmed in July 2025. No settlement or charge was public on October 15, 2026. A January 2026 report from the majority staff of Senator Grassley says that the company used home visits and chart reviews to add diagnoses that increased its government payments. The company disputes the report. A large fine or forced change to these practices could reduce future revenue.
• UnitedHealth's medical cost ratio was elevated through 2025 because new Medicare Advantage members cost more to treat than the company priced for. Government rate-setting and shifts in member mix can still push costs higher than planned in future years. In 2026, commercial medical cost trend was above the 11% that the company first expected. Lower 2027 star ratings can also reduce bonus payments in 2028.
• The killing of UnitedHealthcare CEO Brian Thompson in December 2024 caused public anger at health insurers over claim denials and prior authorization. This raised the risk of new state or federal rules on insurer practices, which could reduce UnitedHealth's margins. In October 2026, the Texas Attorney General started an investigation into denials of care.

• October 13, 2026UnitedHealth reported Q3 2026 revenue of $112.7 billion, down from $113.2 billion a year earlier. The medical care ratio was 88.4%, down from 89.9%. $610 million of favorable reserve changes for earlier months of 2026 helped the quarter. Adjusted EPS was $4.69, up from $2.92. Management raised its 2026 adjusted EPS guidance to at least $20.50, from $19.50 to $20.00. The company said that at least 69% of its Medicare Advantage members are in plans with 4 stars or more for 2027. Its Medicare Advantage membership, with some Medicaid programs, fell by 935,000 since the end of 2025. Management said that the low end of its long-term target of 13% to 16% yearly growth in adjusted EPS is a reasonable start for 2027. It plans to give its 2027 outlook before the end of 2026.
• October 8, 2026The government published the 2027 Medicare Advantage star ratings. Analysts at J.P. Morgan and Stephens estimate that the share of UnitedHealth members in plans with 4 stars or more fell to about 67%, from about 78%. The company did not give a figure and said the results agreed with its expectations. Star ratings set bonus payments for 2028.
• October 5, 2026The Texas Attorney General started an investigation into UnitedHealthcare. The investigation looks at denials of care and alleged payments to nursing homes.