UnitedHealth's turnaround is proceeding largely on plan, but commercial health plan medical costs are running modestly above the 11% the company had been expecting, while Medicare costs are tracking below its roughly 10% estimate for 2026 and Medicaid trend is broadly in line. Management credits benefit design, care management, network curation and a lighter respiratory season for Medicare landing below plan, and attributes the commercial overrun to the independent resolution process under the No Surprises Act, which it calls ineffective. On its earnings call, management said IDR dispute awards contributed approximately 50 basis points of incremental medical cost trend in 2026 and now account for at least 100 basis points of total cost, with roughly 60% of all arbitration cases brought by just five entities and average payouts to out-of-network providers now 11 times what Medicare would pay. The elevated trend has pushed the timeframe for full commercial margin recovery past 2027, which management calls a delay rather than a setback, and it still expects Medicaid margins to stay pressured for 2026. UnitedHealth lifted 2026 adjusted earnings per share guidance to $19.50 to $20 and reaffirmed its 13%-16% long-term growth rate, though its operating margin over the last twelve months, at 4.8%, remains below its three-year average of 7.1%.
UnitedHealth Group IncorporatedUnitedHealth lifted 2026 adjusted EPS guidance to $19.50-$20 and reaffirmed its 13%-16% long-term growth rate.
Humana Inc
