UnitedHealth Group's Turnaround Gains Steam on Medicare, Optum Trends

UnitedHealth Group's turnaround is gaining steam as Medicare Advantage trends improve and Optum Health sees operational gains, according to executives. The company's CFO, Wayne DeVeydt, said the trajectory of things continues to be positive, citing continued strength in Medicare Advantage, Medicaid performance tracking toward the favorable end of expectations, and operational improvements at Optum Health.

DeVeydt noted that Medicare Advantage trends support the upper half of the previously stated 2% to 4% margin range for the year. The company had repositioned its product portfolio entering the year, making difficult decisions on product durability and sustainable margins. Management expects its pricing and benefits to be competitive for 2027.

In Medicaid, UnitedHealth expects margins to be closer to a 1.1% loss than a 1.7% loss this year, DeVeydt said. The company is seeking blended rate increases of roughly 6% to 7% across its Medicaid book, and those increases have materialized as expected. Management views 2026 as a trough year for Medicaid margins, with a return toward breakeven or profitability expected in 2027.

Optum Health's CEO, Krista Nelson, said the company is targeting earnings growth and progress toward a 6% to 8% margin range in 2027. The unit is investing in newer technology and AI-enabled products, including Optum Real, Crimson, and Optum AI. UnitedHealth expects its debt-to-capital ratio to approach 40% by the fourth quarter, compared with roughly 45% a year earlier.