The company’s revenue for the quarter totaled $111.6 billion—$2 billion more than the first quarter’s $109.6 billion and $12.8 billion higher than the $98.9 billion reported in the same period in 2024. However, it reported earnings per share of $4.08, falling short of the $4.45 expected by Wall Street analysts.
As a result, the firm is targeting $1 billion in cost reductions by 2026, and Tim Noel—CEO of United Healthcare, the insurance division of UnitedHealth Group—warned that medical costs are likely to rise next year. He noted that UnitedHealth had initially assumed a Medicare Advantage medical cost trend of just over 5 percent when preparing its 2025 bids, but now expects the trend to reach around 7.5 percent in 2025 and 10 percent next year, indicating a double-digit premium hike for 2026.
“The higher medical trends are being driven by both an increase in units consumed and rapidly rising costs per patient encounter,” the company stated in its report.
“The pricing and benefit designs for 2026 anticipate these trends to continue to accelerate meaningfully to nearly 10 percent.”
Meanwhile, the number of people served with medical benefits is expected to increase by up to 1.135 million from 2024, and those served with commercial benefits are expected to increase by up to 335,000.
For the remainder of the year, UnitedHealth is forecasting that revenues will range within $344–345.5 billion, with a growth of more than 15 percent from 2024. Earnings from operations are expected to range within $9.0–9.3 billion.
“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,” Noel said in a statement.
UnitedHealth Group CEO Stephen Hemsley blamed unprecedented medical cost trends for recent losses.
“We’ve made pricing and operational mistakes as well as others,” he said during the conference call.
“They are getting the needed attention. Our critical processes, including risk status, care management, pharmaceutical, services, and others, are being reviewed by independent experts, and they will be reviewed every year and reported on.”
Hemsley said that the company is working to restore its performance levels.
“Over the last 60 days or more, we have made extensive management and operational changes aligned to this agenda of reform and performance,” he said.
“Other such changes to leadership, to our businesses, our culture, our approaches, and practices, and to our board, governance, and succession oversight as appropriate will continue to be made as we proceed through this period.”
