UnitedHealth Group executives say conditions for commercial health insurance are still challenging.
Tim Noel, the chief executive officer of the company’s UnitedHealthcare health insurance unit, told securities analysts Tuesday that UnitedHealthcare went into 2026 thinking that the underlying cost of care might be 11% higher this year than in 2025.
“As we previously noted, trends for commercial benefits are exceeding our initial expectations,” Noel said.
Medical cost increase trends are higher than expected because of factors such as the high cost of specialty drugs, “greater cost intensity from clinicians,” and the “acceleration of costs related to the No Surprises Act,” Noel said.
Noel talked to the analysts during a conference call UnitedHealth held to discuss its third-quarter earnings. UnitedHealth streamed the analyst call live and posted a recording online.
What it means: Employers will continue to face big health coverage price increases.
The earnings: The third quarter ended Sept. 30.
UnitedHealth as a whole is reporting $4.3 billion in net income for the latest quarter on $112.7 billion in revenue, compared with $2.5 billion in net income on $113.2 billion in revenue for the third quarter of 2025.
Revenue from U.S. commercial health coverage operations increased 0.9%, to $19 billion, but revenue from Medicaid plan operations and other plans aimed at low-income people fell 0.6%, to $24 billion, and revenue from Medicare plans fell 2.2%, to $42 billion.
Enrollment: UnitedHealthcare ended the quarter providing or administering medical coverage for 48 million people, or 3.6% fewer people than it was covering a year earlier.
Medicare Advantage plan enrollment fell 9.8%, to 7.6 million. Medicaid plan enrollment fell 10%, to 6.7 million.
Enrollment in self-insured employer health plans that UnitedHealthcare administers increased 3.2%, to 22 million, but enrollment in fully insured employer plan and individual coverage fell 10%, to 7.6 million.
No Surprises Act costs: The federal No Surprises Act independent dispute resolution system is supposed to protect patients from extra bills related to some types of disputes over claims for out-of-network care. The IDR system helps commercial health coverage providers handle the disputes by working directly with health care providers.
UnitedHealth supports the goals of the No Surprises Act law, but “arbitration awards can approach nearly 6% of total medical spend in some regions,” Noel said. “We will continue working with policymakers and regulators to ensure the law functions as intended and that health care dollars are directed towards appropriate patient care rather than significantly inflated arbitration awards.”
Sales: Although commercial health coverage costs and premium increases have soared, sales and group retention rates for large employer plans have been “very, very strong,” according to Brandon Cuevas, the new CEO of UnitedHealthcare’s commercial business.
UnitedHealthcare is still in the middle of the 2027 selling season for health plans for midsize employers, but middle-market sales volume is “continuing to come in remarkably strong,” Cuevas said.