Every day we read of a ‘crisis’ in healthcare, of Americans struggling with rising costs across the board but for the health insurance industry it appears to be business as usual — it least when it comes to making a profit.
UnitedHealth Group reported first-quarter results on Tuesday that exceeded Wall Street expectations and prompted the company to increase its full-year profit forecast, signaling corporate resilience despite a period of intense public criticism and stubbornly high medical expenses.
The healthcare giant reported adjusted earnings of $7.23 per share, significantly higher than the $6.57 analysts had projected. Revenue for the quarter rose to $111.72 billion, surpassing the consensus estimate of $109.57 billion.
Despite navigating what media has called a “visceral public animus” toward insurers and ongoing government scrutiny of its billing practices, the company maintained high levels of profitability, reporting a net income of $6.28 billion for the quarter.
UnitedHealth’s performance is being closely watched as a bellwether for the broader insurance industry, which has been squeezed by rising costs for specialty drugs like GLP-1s and an influx of patients seeking care delayed during the pandemic.
A critical measure of profitability, the medical benefit ratio—the percentage of premiums paid out for medical claims—improved to 83.9%. This was better than the 85.5% analysts expected and an improvement from 84.8% in the year-earlier period, suggesting the company is managing its medical costs more effectively than its peers.
The results suggest that an ambitious turnaround plan led by CEO Stephen Hemsley is gaining momentum. The strategy involves “right-sizing” the enterprise by selling the U.K. business of its Optum unit, exiting other unprofitable markets, and leaning heavily into artificial intelligence to modernize care delivery and administrative processes.
Additionally, the company has intentionally shrunk its membership base in certain areas, which included shedding nearly one million customers in the Medicare Advantage market.
Hemsley stated that the company is continuing to help simplify and modernize health care for the people and care providers they serve, bringing greater value, affordability, transparency, and connectivity.
Reflecting confidence in its operational overhaul, UnitedHealth hiked its 2026 adjusted earnings outlook to more than $18.25 per share, up from its previous guidance of $17.75 per share. The company is maintaining its full-year revenue guidance of more than $439 billion.
Shares of UnitedHealth jumped about 8% in morning trading following the announcement, as investors were also buoyed by a recent decision by the Trump administration to finalize a larger-than-proposed payment rate increase for Medicare Advantage plans for 2027.
As traditional health insurance continues to come under public scrutiny, some Americans are turning to alternatives like healthshare programs. Healthshares, or health care sharing ministries, are nonprofit, community-based arrangements where members contribute monthly to help pay each other’s medical bills.
While not insurance, healthshares often cost significantly less and offer more flexibility, though they come with limitations and are particularly of benefit for healthy individuals and families.