UnitedHealth Group Tuesday reported third quarter net income of $4.1 billion as the healthcare giant continues to keep previously uncontrolled medical care costs in check in its health insurance plans.

Given the improved performance, the company, the parent of UnitedHealthcare, the nation’s largest health insurer, raised its full year 2026 adjusted net earnings to “at least $20.50 per share” compared to an earlier forecast of “between $19.50 and $20 per share.”

“The third quarter 2026 medical care ratio was 88.4% compared to 89.9% in the third quarter 2025,” the company said of the ratio, which is the percentage of premium revenue that goes toward medical costs. “The year-over-year decrease was driven by medical cost management initiatives, benefit design changes and pricing discipline, as well as care delivery enhancements focused on affordability and integrated value-based care. Net medical reserve development was $610 million in the quarter related to 2026 dates of service.”

UnitedHealth reported net income of $4.1 billion, or $4.56 per share for the three-month period ended Sept. 30, compared to $2.3 billon, or $2.59 per share in the third quarter of last year. UnitedHealth Group’s third quarter 2026 total revenues dipped slightly to $112.7 billion compared to $113.2 billion in the third quarter 2025.

“Our third quarter results reflect the discipline and execution our teams are bringing to every to every part of our business, as we continue evolving UnitedHealth Group to deliver a simpler, more supportive experience for patients and the clinicians who care for them,” UnitedHealth Group chief executive officer Stephen Hemsley said in a statement accompanying the earnings report.

Medical loss ratios had risen to 90% and above for several health insurance companies as claims pile up from doctors and hospitals seeing an influx of patients with a pent up demand for medical care. And some industry analysts have been worried that medical costs would rise again, particularly in the back half of this year.

In UnitedHealth’s fourth quarter of last year, for example, the insurer’s medical care ratio was 91.5%. The industry would prefer such ratios to be below 90% and into the mid 80s, where the industry was less than two years ago.

But UnitedHealth’s medical loss ratio has now been below 90% for the third consecutive quarter , which could be a good sign for the rest of the industry. UnitedHealth is the first of the major health insurance company operators to report third quarter earnings. Elevance Health, the nation’s second-largest health insurer, reports its third quarter earnings next week.

UnitedHealthcare’s improving medical cost picture comes in part due to decisions by new management under Hemsley to exit unprofitable markets where the company has sold individual coverage under the Affordable Care Act, also known as Obamacare, as well as pulling out of scores of counties where the company no longer sells privatized Medicare Advantage plans. Health insurers including UnitedHealthcare, CVS Health’s Aetna, Humana and Elevance Health all have been struggling to contain medical expenses at various points in the last couple of years, particularly among the older adults enrolled in their Medicare Advantage plans.

The exits from these markets contributed to a loss of health plan members, with UnitedHealthcare serving about 48.3 million people in the third quarter of this year compared to 50.125 million people in the year-ago quarter and 49.76 million at year-end 2025. UnitedHealthcare’s Medicare Advantage enrollment fell to 7.6 million in the third quarter compared to 8.43 million in the year-ago period and 8.44 million at the end of last year.

UnitedHealthcare, however, recently reported that it was expanding into new markets for 2027. Two weeks ago, UnitedHealthcare said its total individual Medicare Advantage footprint will expand by four counties – from 2,787 counties in 2026 to 2,791 counties in 2027 – and will span across 47 states and the District of Columbia. The company is, however, exiting Wyoming in 2027.

Meanwhile, UnitedHealth Group’s giant health services business, Optum, is still working on improving its operations. Its Optum Health third quarter revenues tumbled 10% to $22.9 billion “as a result of fewer value-based care patients served in markets where Optum lacked sufficient value-based care presence to sustain its clinicians,” the company said in its earnings report.

OptumRx revenues, however, were up slightly to $39.9 billion compared to $39.7 billion in the third quarter of last year. OptumRx, which is one of the nation’s largest pharmacy benefit management companies, said earnings from operations for the third quarter rose to $1.7 billion compared to $1.5 billion in the third quarter of last year, “reflecting continued adoption of biosimilars and operational improvements.”