UNH Earnings Growth Hinges on Controlling Medical Costs

UnitedHealth (UNH) has experienced significant earnings growth in recent quarters, with operating earnings rising 55% in the second quarter of 2026. However, revenue growth has stalled, increasing by only 0.4% year-over-year.

The company attributes this turnaround to repricing and benefit design changes, which have helped management boost its full-year adjusted earnings guide to $19.50 to $20 a share. Despite this, the medical bills of those insured continue to rise, with commercial plans experiencing a modestly above 11% trend in medical cost.

This trend is partly due to the arbitration process under the No Surprises Act, which adds around 50 basis points of extra trend in 2026. The average payout for out-of-network providers is now 11 times what Medicare would pay, pushing full commercial margin recovery past 2027.