Q1 2026 UnitedHealth Group Inc Earnings Call

April 21, 2026

26 earnings conference call.

<unk> and answer session will follow Unitedhealth group's prepared remarks as a reminder, this call is being recorded here is some important introductory information. This call contains forward looking statements under U S. Federal Securities laws. These statements are subject to risks and uncertainties that could cause actual results to differ materially from historical experience or <unk>.

<unk> expectations, a description of some of the risks and uncertainties can be found in the reports that we file with the Securities and Exchange Commission, including the cautionary statements included in our current and periodic filings.

Speaker #1: Good morning and welcome to the UnitedHealth Group Q1 2026 Earnings Conference Call. A question-and-answer session will follow UnitedHealth Group's prepared remarks. As a reminder, this call is being recorded.

This call will also reference non-GAAP amounts a reconciliation of the non-GAAP to GAAP amount is available on the financial and earnings reports section of the company's Investor Relations page at Www Dot Unitedhealth group Dot Com information presented on this call is contained in the earnings release, we issued this morning and in our.

Speaker #1: Here are some important introductory information. This call contains forward-looking statements under U.S. federal securities laws. These statements are subject to risks and uncertainties that could cause actual results to differ materially from historical experience or present expectations.

8-K dated April 21, 2026, which may be accessed from the Investor Relations page of the company's website.

Speaker #1: A description of some of the risks and uncertainties can be found in the reports that we file with the Securities and Exchange Commission, including the cautionary statements included in our current and periodic filings.

I will now turn the conference over to the Chairman and Chief Executive Officer of Unitedhealth Group Stephen Hemsley.

Speaker #1: This call will also reference non-GAAP amounts. A reconciliation of the non-GAAP to GAAP amounts is available on the Finance and Earnings Report section of the company's Administration page at www.unitedhealthgroup.com.

Thank you Lisa good morning, and thank you for joining us today.

The first quarter unfolded largely as expected.

The actions taken in the past several months to drive consistent performance across each business.

Speaker #1: Information presented on this call is contained in the earnings release we issued this morning and in our Form 8-K dated April 21, 2026, which may be accessed from the Investor Relations page of the company's website.

The quarter saw continued progress in advancing our organizations performance culture and better business practices.

All of our major business segments exceeded plan for the quarter.

Speaker #1: I will now turn the conference over to the Chairman and Chief Executive Officer of UnitedHealth Group, Stephen Hemsley.

United Health care pricing is improving relative to elevated health care cost trends.

Speaker #2: Thank you, Lisa. Good morning, and thank you for joining us today. The first quarter unfolded largely as expected, reflecting actions taken in the past several months to drive consistent performance across each business.

And affordability initiatives initiatives are generating positive momentum.

At Optum health operational improvements continued to take hold as we more deeply embed disciplined integrated value based care practices market by market.

Speaker #2: The quarter saw continued progress in advancing our organization's performance, culture, and better business practices. All of our major business segments exceeded plan for the quarter.

Optum insight has seen increased market interest with its AI first enterprise approach.

No and Petro Conway will discuss these efforts in more detail in a minute.

Speaker #2: At UnitedHealthcare, pricing is improving relative to elevated healthcare cost trends, and affordability initiatives are generating positive momentum. At OptumHealth, operational improvements continue to take hold as we more deeply embed disciplined, integrated, value-based care practices market by market.

We're encouraged by the way the year has started.

We remain grounded in the need for consistent execution in managed care fundamentals and on our strategy to help build an integrated value based health system that together makes things better and simpler for care providers patients and customers.

We are investing in AI enabled modernization.

Speaker #2: OPTIMINSIGHT is seeing increased market interest with its AI-first enterprise approach. Tim Noel and Patrick Conway will discuss these efforts in more detail in a minute.

While early these capabilities are already improving experiences for consumers and care providers, increasing productivity and reducing administrative burden.

Speaker #2: We're encouraged by the way the year has started. We remain grounded in the need for consistent execution in managed care fundamentals and on a strategy to help build an integrated, value-based health system that together makes things better and simpler for care providers, patients, and customers.

The application of that technology has long been foundational to help this enterprise operates and.

And how we can help others across the health system improve their operations through Optum insight.

We remain on track to invest nearly $1 5 billion in AI related initiatives in 2026.

Speaker #2: We are investing in AI-enabled modernization. While early, these capabilities are already improving experiences for consumers and care providers, increasing productivity and reducing administrative burden.

I hope our conversation today gives you a sense of the momentum building at our company and the steps we've taken to strengthen the enterprise and positioned it for long term success.

We have refocused the organization squarely on U S health care.

Speaker #2: The application of technology has long been foundational to how this enterprise operates, and how we can help others across the health system improve their operations through OPTIMINSIGHT.

Exiting non U S businesses.

We've refreshed nearly half of our top 100 leadership roles.

Our accelerated technology and AI investments are showing meaningful potential.

Speaker #2: We remain on track to invest nearly $1.5 billion in AI-related initiatives in 2026. I hope our conversation today gives you a sense of the momentum building at our company and the steps we've taken to strengthen the enterprise.

And were actively evolving business practices in areas, such as data and process and interoperability and speed.

Pharmacy practices prior authorization product and reporting transparency and management practices more broadly.

Speaker #2: And position it for long-term success. We have refocused the organization squarely on U.S. healthcare, exiting non-U.S. businesses. We've refreshed nearly half of our top 100 leadership roles.

At the corporate level.

Strengthened governance by creating a public responsibility committee of the board named.

Damian.

New lead independent director and New Committee chairs.

Speaker #2: Our accelerated technology and AI investments are showing meaningful potential. And we're actively evolving business practices in areas such as data and processing interoperability and speed.

Adding a new independent director and accelerating our board recruiting process.

And we have redoubled.

Community engagement and support with renewed focus and resources to the United Health Foundation.

Speaker #2: Pharmacy practices, prior authorization, product and reporting transparency, and management practices more broadly. At the corporate level, we've strengthened governance by creating a Public Responsibility Committee of the Board.

And an expanded commitment to improving rural health care, expanding the health care workforce strengthening maternal and children's health addressing the challenges of behavioral health and more.

We strive to be an organization of people.

Speaker #2: Naming a new lead independent director and new committee chairs, adding a new independent director, and accelerating our board recruiting process. And we've redoubled community engagement and support.

Organization of people proud to work.

Work.

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These efforts and others will remain central to those goals.

With that I'll turn it over to Tim and Patrick to provide insights on our quarter and goes to the failure of the year Tim.

Speaker #2: With renewed focus and resources to the UnitedHealth Foundation, and an expanding commitment to improving rural healthcare, expanding the healthcare workforce, and strengthening maternal and children's health.

Thanks, Steve.

As Steve said the actions initiated last year are driving early momentum in the United Healthcare.

Speaker #2: Addressing the challenges of behavioral health and more. We strive to be an organization of people—an organization of people proud to work for and with these efforts and others will remain.

Both in our business results and in the experiences members and care providers have when they engage with us.

Medicare and retirement results reflect disciplined pricing strengthened by affordability initiatives.

And an elevated but stable medical trend environment.

Speaker #2: Those goals. With that, I'll turn it over to Tim and Patrick to provide insights on our quarter and goals for Tim.

Community and state results continue to reflect the pressures in state based rate environment, but we're within the overall expected range.

Speaker #3: Thanks, Steve. As Steve said, the actions initiated last year are driving early momentum in UnitedHealthcare, both in our business results and in the experiences members and care providers have when they engage with us.

Commercial and ACA results were consistent with pricing and trend assumptions.

Albeit still early in the year.

Our 2026 approach prioritize margin recovery and product stability with a deliberate tradeoff on membership growth, particularly in Medicare and commercial markets.

Speaker #3: Medicare and Retirement results reflect disciplined pricing, strengthened by affordability initiatives and an elevated but stable medical trend environment. Community and State results continue to reflect the pressures in state-based rate environments.

Care utilization trends in the quarter remained consistent with our expectations for 2026.

The quarter's medical cost performance overall was driven primarily by a net reserve development better mix and enrollment dynamics and government programs.

Speaker #3: Commercial and ACA results were consistent with pricing and trend assumptions, albeit still early in the year. Our 2026 approach prioritized margin recovery and product stability.

As we monitor underlying utilization trends they remain consistent with the high levels. We saw in the prior year at this distance, we anticipate trend to remain at the anticipated levels for 2026.

Speaker #3: With a deliberate trade-off on membership growth, particularly in Medicare and commercial markets. Care utilization trends in the quarter remained consistent with our expectations for 2026.

In Medicaid, we remained focused on improvements and high acuity care management and operating cost management.

Speaker #3: The quarter's medical cost performance overall was driven primarily by net reserve development, better mix, and enrollment dynamics in government programs, as we monitor underlying utilization trends.

First quarter performance reflected a combination of favorable reserve development and early in your medical cost experience.

We continue to expect membership attrition and negative margins in 2026 in light of continuing high trend and insufficient funding with modest margin improvements beginning in 2027.

Speaker #3: They remain consistent with the high levels we saw in the prior year. At this distance, we anticipate trends to remain at the anticipated levels.

Many state rate processes are still open for the remainder of 2026 and into 2027.

Speaker #3: For 2026, in Medicaid, we remain focused on improvements in high-acuity care management and operating cost management. First quarter performance reflected a combination of favorable reserve development and early in-year medical cost experience.

Appropriately aligning state rates to elevated medical cost trends in these programs.

Is essential to sustainably serving people who rely on them.

We continue to advocate for this with state partners alongside our own disciplined cost management and operational efficiencies. We are intensifying our work with states to address areas of potential fraud waste and abuse.

Speaker #3: We continue to expect membership attrition and negative margins in 2026, in light of continuing high trend and insufficient funding, with modest margin improvements beginning in 2027.

For our commercial business membership levels renewals and trends were generally in line with the expectations, we shared with you.

Speaker #3: Many state rate processes are still open for the remainder of 2026 and into 2027. Appropriately aligning state rates to elevated medical cost trends in these programs is essential to sustainably serving people who rely on them.

The pricing actions. We have previously discussed are materializing as intended preserving margin while contributing to some moderation in growth.

Speaker #3: We continue to advocate for this with state partners, alongside our own disciplined cost management and operational efficiencies. We are intensifying our work with states to address areas of potential fraud, waste, and abuse.

Self funded offerings continue to perform well.

We are approaching 2027 selling season with a focus on appropriate pricing for the elevated cost environment and meeting employer needs for more modern tools to support consumer again engagement and affordability.

Speaker #3: For commercial business, membership levels, renewals, and trends were generally in line with the expectations we shared with you. The pricing actions we have previously discussed are materializing as intended.

As anticipated the individual ACA business continues to contract.

We still expect total membership to decline by approximately one third in 2026.

Speaker #3: Preserving margin while contributing to some moderation and growth. Self-funded offerings continue to perform well. We are approaching the 2027 selling season with a focus on appropriate pricing for the elevated cost environment, and meeting employer needs for more modern tools to support consumer engagement and affordability.

Our approach in the AC market continues to be directed towards the brands and gold tiered products.

We're member mix and utilization rates are largely aligned with plan.

As a reminder, we paused to refund any 2026 profits from these plans.

And our first quarter results reflect this pledge.

And Medicare medical trends remain elevated but in line with our pricing assumptions.

Speaker #3: As anticipated, the individual ACA business continues to contract. We still expect total membership to decline by approximately one-third in 2026. Our approach in the ACA market continues to be directed toward the bronze and gold tiered products.

This reflects continued service intensity and higher provider billing patterns consistent with what we saw exiting last year.

This is an issue that we are squarely addressing.

Turning to enrollment results from the annual enrollment period were largely as expected and OSP retention has remained stable.

Speaker #3: Where member mix and utilization rates are largely aligned with plan. As a reminder, we pledge to refund any 2026 profits from these plans, and our first quarter results reflect this pledge.

At this point in the year, we expect membership to contract consistent with previous guidance, but centering more around a drop of $1 3 million.

Speaker #3: In Medicare, medical trends remain elevated but in line with our pricing assumption. This reflects continued service intensity and higher provider billing patterns consistent with what we saw exiting last year.

On the final Medicare advantage rate notice for the 2027 plan year.

We appreciate that the Trump administration, better aligned funding with increasing health care costs.

It's an.

Speaker #3: This is an issue that we are squarely addressing. Turning to enrollment, results from the annual enrollment period were largely as expected, and OEP retention has remained stable.

Important step to preserving stability for the millions of seniors, who rely on MA and toward ensuring this vital program long term sustainability.

Turning now to our efforts to improve the patient and clinician experience when they engage with us starting with prior authorization.

Speaker #3: At this point in the year, we expect membership to contract consistent with previous guidance, but centering more around a drop of 1.3 million. On the final Medicare Advantage rate notice for the 2027 plan year.

Higher authorization remains a critically important tool for eliminating fraud waste and abuse and for helping ensure patient safety and quality care.

Speaker #3: We appreciate that the Trump administration better aligned funding with increasing healthcare costs. It's an important step to preserving stability for the millions of seniors who rely on MA and toward ensuring this vital program.

We also recognized as a source of frustration and we are working to reduce that.

Nearly 95% of prior authorization requests are now submitted electronically.

50% of those are processed in real time and more than 90% are approved on average in one business day.

We are working to enable more prior authorization submissions to be made directly within care provider workflows in.

In addition to the steps we are taking to further reduce the overall number of medical prior authorizations by 30% or more by the end of this year.

Tim Noel: We also recognize it is a source of frustration, and we are working to reduce that. Nearly 95% of prior authorization requests are now submitted electronically. About 50% of those are processed in real time, and more than 90% are approved on average in one business day. We are working to enable more prior authorization submissions to be made directly within care provider workflows, in addition to the steps we are taking to further reduce the overall number of medical prior authorizations by 30% or more by the end of this year. Member adoption of UHC AI-powered digital tools continues to grow. Almost half of all members are now registered for and using UHC Digital Access. We saw 73 million digital visits in Q1, up 42% over the last two years, reflecting sustained and growing engagement with our digital platform.

Member adoption of UHC AI powered digital tools continues to grow.

Almost half of all members are now registered four and using UHC digital access.

We saw a 73 million digital visits in Q1 up 42% over the last two years, reflecting sustained and growing engagement with our digital platform.

Digital self service is now the primary where members interact with us with over 80% of consumer context, there digital formats and in NPS in the top quartile of the industry.

In addition to the steps we are taking to further reduce the overall number of medical prior authorizations by 30% or more by the end of this year.

For care providers digital channels continue to grow with transaction volumes up 75% year over year and about 75% of in network providers, using our portal or API tools.

Member adoption of UHC, AI power, and digital tools continues to grow.

Almost half of all members are now registered for and using UHC digital access.

This improves real time access to eligibility benefits and claims status, while reducing manual outreach.

Tim Noel: Digital self-service is now the primary way members interact with us, with over 80% of consumer contacts through digital formats, and an NPS in the top quartile of the industry. For care providers, digital channels continue to grow, with transaction volumes up 75% year over year and about 75% of in-network providers using our portal or API tools. This improves real-time access to eligibility, benefits, and claim status while reducing manual outreach, enabling clinicians to spend more time on caring for patients. We are intensifying our efforts to help independent rural healthcare providers. We will accelerate payments in all lines of business by 50% for rural hospitals and exempt rural healthcare providers from most medical prior authorization requirements. We are building network partnerships between rural providers and leading regional health systems.

Enabling clinicians or spend more time on caring for patients.

We saw 73 million digital visits in Q1, up 42% over the last two years, reflecting sustained and growing engagement with our digital platform.

We are intensifying our efforts to help independent rural health care providers.

We'll accelerate payments in all lines of business by 50% for rural hospitals, and exempt rural health care providers for most medical prior authorization requirement.

Digital self-service is now the primary way our members interact with us, with over 80% of computer contacts through digital formats in an MPS in the top quartile of the interview.

And we are building network partnerships between rural providers and leading regional health systems.

For care providers, digital channels continue to grow, with transaction volumes up 75% year-over-year, and about 75% of in-network providers using our portal or API tools.

Together these initiatives will help lower costs and simplify processes for care providers and greatly enhanced access to quality care for people in rural communities.

This improves real-time access to eligibility, benefits, and claim status while reducing manual outreach.

All of these efforts and others like them are part of our commitment to pursue and invest in new and innovative ways to fulfill our mission to.

Enabling clinicians to spend more time caring for patients.

We are intensifying our efforts to help independent rural healthcare providers.

To help people live healthier lives and help make the health system work better for everyone.

With that I'll turn it over to Patrick.

Thanks, Tim across Optum positive first quarter results reflect strength in operations continued investment in growth and changes that make engaging with us easier for patients and provider and clinician partners.

We will accelerate payments in all lines of business by 50% for rural hospitals, and exempt rural health care providers from most medical prior authorization requirements.

Tim Noel: Together, these initiatives will help lower costs and simplify processes for care providers and greatly enhance access to quality care for people in rural communities. All these efforts, and others like them, are part of our commitment to pursue and invest in new and innovative ways to fulfill our mission, to help people live healthier lives and help make the health system work better for everyone. With that, I'll turn it over to Patrick.

And we are building network partnerships between rural providers and leading regional health systems.

Start with Optum health adjust.

Adjusted earnings of $1 3 billion reflect pricing and operational improvements that began in the back half of 2025 as well as actions taken to improve contracts and reshape our value based care portfolio to better align with the original purpose and risk profile for that strategy.

Together, these initiatives will help lower costs and simplify processes for care providers, and greatly enhance access to quality care for people in rural communities.

All these efforts, and others like them, are part of our commitment to pursue and invest in new and innovative ways to fulfill our mission.

to help people live healthier lives and help make

Patrick Conway: Thanks, Tim. Across Optum, positive Q1 results reflect strengthened operations, continued investment in growth, and changes that make engaging with us easier for patients and provider and clinician partners. I'll start with Optum Health. Adjusted earnings of $1.3 billion reflect pricing and operational improvements that began in the H2 of 2025, as well as actions taken to improve contracts and reshape our value-based care portfolio to better align with the original purpose and risk profile for that strategy. As we have shared over the past three quarters, our efforts are focused on management and process improvements that steadily improve margins at Optum Health for 2026 and accelerate into 2027. A key part of the progress is Optum Health's return to a disciplined, integrated value-based care model.

As we have shared over the past three quarters. Our efforts are focused on management and process improvements.

With that, I'll turn it over to Patrick.

Steadily improve margins at Optum health for 2026 and accelerate into 2027.

A key part of the progress is Optum health returned to a disciplined integrated value based care model.

Thanks, Tim. The cross-Optum positive first quarter results reflect strength in operations, continued investment in growth, and changes that make engaging with us easier for patients, provider, and clinician partners.

I'll start with Optum health.

With increasing prices from health systems, rising patient acuity and higher consumer expectation integrated value based care is the most effective way to improve outcomes and manage total cost of care over time.

We are privileged to serve over 20 million patients that are optum health care models across the country, including over $4 million in fully value based arrangements.

Adjusted earnings at $1.3 billion reflect pricing and operational improvements that began in the back half of 2025, as well as actions taken to improve contracts and reshape our value-based care portfolio to better align with the original purpose and risk profile for that strategy.

Both patients and care providers do better when incentives are aligned towards care outcomes and not the quantity of services provided.

As we have shared over the past three quarters, our efforts are focused on management and process improvements. That’s steadily improved margins at optimal health for 2026 and will accelerate into 2027.

For example, new research published in the American Journal of managed care showed that among nearly 2 million dual eligible patients those in value based care arrangements had 24% fewer acute inpatient hospital admissions and 29% fewer emergency room visits than patients in traditional Medicare.

Patrick Conway: With increasing prices from health systems, rising patient acuity, and higher consumer expectation, integrated value-based care is the most effective way to improve outcomes and manage total cost of care over time. We are privileged to serve over 20 million patients in our Optum Health care models across the country, including over four million in fully value-based arrangements. Both patients and care providers do better when incentives are aligned towards care outcomes and not the quantity of services provided. For example, new research published in The American Journal of Managed Care showed that among nearly two million dual-eligible patients, those in value-based care arrangements had 24% fewer acute inpatient hospital admissions and 29% fewer emergency room visits than patients in traditional Medicare. We are improving patient experience and outcomes through efforts to stabilize staffing, increase productivity, improve scheduling, and standardize workflows in both our value-based and fee-for-service models.

A key part of the progress is Optum Health's return to a disciplined, integrated value-based care model.

With increasing prices from health systems, rising patient acuity, and higher consumer expectations, integrated value-based care is the most effective way to improve outcomes and manage total cost of care over time.

We are improving patient experience and outcomes through efforts to stabilize staffing increased productivity improved scheduling and standardized workflows and both are value based and fee for service models.

We are privileged to serve over 20 inpatients. Optum Health care models across the country include over 4 million in fully value-based arrangements.

It is this kind of operational focus that improves clinical outcomes by better focus and deployment of clinical resources to the right care time and setting.

Both patients and care providers do better when incentives are aligned toward care outcomes and not the quantity of services provided.

Gives us a clear path to long term sustainable margin levels of 6% to 8%.

One example, our west region, where in response to rising patient acuity, we deployed more data driven clinically led navigation in areas such as hospital admission and discharge skilled nursing facility transitions and emergency department and counters.

For example, new research published in the American Journal of Managed Care showed that among nearly 2 million dual eligible patients, those in value-based care arrangements had 24% fewer acute inpatient hospital admissions and 29% fewer emergency room visits than patients in traditional Medicare.

Since the last quarter when a corner views have increased by more than 50% with earlier patient intervention and more consistent care coordination.

Patrick Conway: It is this kind of operational focus that improves clinical outcomes by better focus and deployment of clinical resources to the right care, time, and setting. It gives us a clear path to long-term sustainable margin levels of 6% to 8%. One example, our west region, where in response to rising patient acuity, we deployed more data-driven, clinically led navigation in areas such as hospital admission and discharge, skilled nursing facility transitions, and emergency department encounters. Since the last quarter, clinical reviews have increased by more than 50%, with earlier patient intervention and more consistent care coordination. We're already seeing inpatient skilled nursing admissions trending sharply below historical levels, including an approximately 35% reduction in skilled nursing admissions in the first month compared to last year.

We are improving patient experience and outcomes through efforts to stabilize staffing, increase productivity, improve scheduling, and standardize workflows in both our value-based and fee-for-service models.

We're already seeing inpatient skilled nursing emissions trading sharply below historical levels, including an approximately 35% reduction in skilled nursing admissions in the first month compared to last year.

It is this kind of operational focus that improves clinical outcomes by better focusing and deployment of clinical resources to the right care, time, and setting.

And that gives us a clear path to long-term sustainable margin levels of 6% to 8%.

These efforts are expanding to additional markets and reflect how using real time data strong clinical leadership and coordinated care to improve outcomes can drive more predictable performance.

Within our fee for service businesses, we brought more managed structure and accountability, starting with clear scheduling guidelines stronger regional leadership and better data and analytics to match supply and demand.

Speaker #5: across all products. When you think about trend drivers, our assumption is that the activity that we would see for 2026 would be pretty consistent with what we saw in '25.

More data-driven, clinically led navigation, and areas such as hospital admission and discharge, skilled nursing facility transitions, and emergency department encounters.

Since the last quarter, clinical reviews have increased by more than 50%, with earlier patient intervention and more consistent care coordination.

These new standards are now in place across nearly 70% of our settings and are on track to reach nearly 80% by the end of the second quarter.

Speaker #5: And as I just stated, that's really playing out. What we've done is a couple of things. We talked in the Medicare Advantage space of our product positioning leaning more towards HMO-based products.

<unk> already driven a 12% year over year increase in patients facing hours, which is better for both clinicians and patients.

Patrick Conway: These efforts are expanding to additional markets and reflect how using real-time data, strong clinical leadership, and coordinated care to improve outcomes can drive more predictable performance. Within our fee-for-service businesses, we've brought more managed structure and accountability, starting with clear scheduling guidelines, stronger regional leadership, and better data and analytics to match supply and demand. These new standards are now in place across nearly 70% of our settings and are on track to reach nearly 80% by the end of Q2. They have already driven a 12% year-over-year increase in patients facing hours, which is better for both clinicians and patients. We are rapidly scaling self-service digital scheduling, including AI-enabled tools that guide patients to the right appointment in the right setting at the right time for them. That's improving access, reducing friction, and expanding capacity without adding incremental clinical burden.

We're already seeing inpatient skilled nursing admissions trending sharply below historical levels, including an approximately 35% reduction in skilled nursing admissions in the first month compared to last year.

Speaker #5: As a means to be able to better manage outlier activity. But, broadly speaking, themes that you can think about in terms of how we're managing it is we have better tools to early identify some of the outlier patterns that we're seeing.

We are rapidly scaling self service digital scheduling, including AI enabled tools that guide patients to the right appointment in the right setting at the right time for them.

These efforts are expanding to additional markets and reflect how using real-time data, strong clinical leadership, and Coordinated Care to improve outcomes can drive more predictable performance.

That's improving access reducing friction and expanding capacity without adding incremental clinical burden.

Speaker #5: And where some of the trend drivers inside of 2025. And engage early with clinical programs, with payment integrity programs, and also in certain cases, take network actions, which we have done.

Within our fee-for-service businesses, we've brought more managed structure and accountability, starting with clear scheduling guidelines, stronger regional leadership, and better data and analytics to match supply and demand.

Moving to <unk>, we started the year by Onboarding more than 800, new clients, while reducing contact call center volume, 25% through enhanced digital and AI enabled self service with member satisfaction over 95%.

These new standards are now in place across nearly 70% of our settings, and are on track to reach nearly 80% by the end of the second quarter.

Speaker #5: To be able to address those things. And we are making good progress in that area. And we'll continue to focus on affordability across all of the product lines inside of 2026.

Our unique pre check prior authorization capability reduces prescription approval time from over eight hours to under 30 seconds and.

They have already driven a 12% year-over-year increase in patient-facing hours, which is better for both clinicians and patients.

Speaker #5: And we'll probably be able to offer more information around that in the Q2 call.

The 68% reduction in denials due to missing information and an 88% reduction in appeals.

Speaker #2: Thanks, Tim. Next question, please.

Using interactions for our clients members and providers.

Speaker #3: We'll move next to Andrew Mock with Barclays.

Patrick Conway: Moving to Optum Rx, we started the year by onboarding more than 800 new clients while reducing contact call center volume 25% through enhanced digital and AI-enabled self-service with member satisfaction over 95%. Our unique PreCheck prior authorization capability reduces prescription approval time from over 8 hours to under 30 seconds and provides a 68% reduction in denial due to missing information, and an 88% reduction in appeals, easing interactions for clients, members, and providers. Q1 utilization and drug cost trends were as expected, with scripts down slightly year-over-year, reflecting some membership mix and attrition. As manufacturers continue to implement significant drug price increases and with more complex specialty drugs representing over 50% of drug spend, the role of pharmacy care is more important than ever in helping patients access affordable drugs. At Optum Insight, new AI-first products continue to gain traction.

We are rapidly scaling self-service digital scheduling, including AI-enabled tools that guide patients to the right appointment and the right setting at the right time for them. That's improving access, reducing friction, and expanding capacity without adding incremental clinical burden.

First quarter utilization and drug cross drug cost trends were as expected with scripts down slightly year over year, reflecting some membership mix and attrition.

Speaker #7: Hi, good morning. Could you help us unpack what's driving the outperformance? This quarter specifically, how much is contract- or benefit-driven versus utilization-driven? And can you clarify what's driving the strong moderation in Optum Health profits, such that the majority of earnings are recognized in the first half?

As manufacturers continue to implement significant drug price increases and with more complex specialty drugs, representing over 50% of drug spend the role of pharmacy care is more important than ever and helping patients access affordable drugs.

Moving to Optum Rx. We started the year by onboarding more than 800 new clients, while reducing contact call center volume by 25% to enhance digital and AI-enabled self-service, with member satisfaction over 95%.

Speaker #7: Thanks.

Speaker #2: Sure, Krista. Please.

Speaker #8: Yep. Thanks, Andrew, for the question. We're really encouraged by what we're seeing in the first quarter, which is really a direct reflection of intentional actions that we've taken over the past few months to improve core performance.

Our unique pre-check prior authorization capability reduces prescription approval time from over 8 hours to under 30 seconds.

At Optum insight, new AI <unk> products continue to gain traction.

Optum real is helping payers and care providers deal more efficiently with administrative functions such as claim adjudication and coverage validation and can reduce manual contact costs by 76%.

And provides a 68% reduction in denials due to missing information, and an 88% reduction in appeals. Easing interactions for clients, members, and providers.

Speaker #8: I'll just call out two drivers of the performance improvement. First, we're seeing medical from prior periods restate favorably relative to our expectations. But this is actually largely concentrated in markets where we've really focused on clinical and medical management efforts.

First quarter utilization and drug cross-drug cost trends were as expected, with scripts down slightly year-over-year, reflecting some membership mix and attrition.

Other AI initiatives helped automate provider payer and the internal workflows, improving accuracy, reducing administrative burden and strengthening our role as a technology partner for the health system.

Speaker #8: Patrick highlighted one of the examples in the West where we saw an opportunity to help support members in key moments of transition. And as we've increased and invested in leadership and process improvement in clinical reviews, we've actually seen a pretty sharp decline in improvement in unnecessary inpatient admissions, as well as admissions.

Within Optum insight Optum financial services continues to perform well.

As manufacturers continue to implement significant drug price increases, and with more complex specialty drugs representing over 50% of drug spend, the role of Pharmacy Care is more important than ever in helping patients access affordable drugs.

And has agreed to acquire <unk> technologies, a leading health financial services business.

Patrick Conway: Optum Real is helping payers and care providers deal more efficiently with administrative functions such as claim adjudication and coverage validation, and can reduce manual contact costs by 76%. Other AI initiatives help automate provider, payer, and internal workflows, improving accuracy, reducing administrative burden, and strengthening our role as a technology partner for the health system. Within Optum Insight, Optum Financial Services continues to perform well and has agreed to acquire Alegeus Technologies, a leading health financial services business. This is an important step in providing more flexible, consumer-centered solutions for the people we serve. This transaction is expected to be accretive in 2027. Our AI enhanced performance gives just a flavor of what Optum can do to help physicians and clinical care teams, payers, and patients. Wayne, I'll turn it over to you.

At Optum Insight, new AI-first products continue to gain traction.

This is an important step in providing more flexible consumer centered solutions for the people we serve.

This transaction is expected to be accretive in 2027.

Optum Reel is helping payers and care providers deal more efficiently with administrative functions, such as claim adjudication and coverage validation, and can reduce manual contact costs by 76%.

Our AI enhanced performance gives just a flavor of what optum can do to help physicians and clinical care teams Payors and patients Wayne I will turn it over to you.

Thank you Patrick and good morning.

Other AI initiatives help automate provider-payer interactions in the internal workflows, improving accuracy, reducing administrative burden, and strengthening our role as a technology partner for the health system.

First quarter results reflect improving fundamentals and a strengthening of operations across our businesses.

Within Optum Insight, Optum Financial Services continues to perform well.

As Steve mentioned.

All of our operating segments exceeded our plan for the quarter with particular strength in Medicare and Optum health.

And has agreed to acquire Religious Technologies, a leading health financial services business,

For the first quarter, we reported adjusted earnings per share of $7 23.

This is an important step in providing more flexible, consumer-centered solutions for the people we serve.

Well ahead of our expectations and backed by strong quality metrics, including cash flows and reserves.

This transaction is expected to be accretive in 2027.

We continue to balance near term performance with disciplined investment and longer term strategic priorities.

Wayne DeVeydt: Thank you, Patrick, and good morning. Our Q1 results reflect improving fundamentals and a strengthening of operations across our businesses. As Steve mentioned, all our operating segments exceeded our plan for the quarter, with particular strength in Medicare and Optum Health. For Q1, we reported adjusted earnings per share of $7.23, well ahead of our expectations and backed by strong quality metrics, including cash flows and reserves. We continue to balance near-term performance with disciplined investment in longer-term strategic priorities. Total revenues in the quarter were $111.7 billion, reflecting 2% growth year-over-year, driven by disciplined pricing actions and member mix. We now serve 49.1 million total members domestically, compared to 49.8 million at the end of 2025.

Total revenues in the quarter were $111 7 billion, reflecting 2% growth year over year, driven by disciplined pricing actions and member mix.

We now serve $49 1 million total members domestically compared to $49 8 million at the end of 2025.

Our AI-enhanced performance gives just a flavor of what Optum can do to help physicians and clinical care teams, payers, and patients. Wayne, I'll turn it over to you. Thank you, Patrick, and good morning. Our first quarter results reflect improving fundamentals and a strengthening of operations across our businesses. As Steve mentioned, all our operating segments exceeded our plan for the quarter, with particular strength in Medicare and Optum Health.

Turning to medical costs.

Our reported medical care ratio of 83, 9% compares to 84, 8% in the first quarter of 2025 and as a result of pricing discipline strong medical cost management and favorable reserve development.

For the first quarter, we reported adjusted earnings per share of $7.23, well ahead of our expectations and backed by strong quality metrics, including cash flows and reserves.

We continue to balance near-term performance with disciplined investment in longer-term, strategic priorities.

The first quarter benefited modestly from seasonal dynamics, including lower than expected respiratory activity <unk>.

Consistent with our guidance, we expect some of these dynamics to moderate as we move further into the second quarter, particularly given the impact of IRA related changes to part D seasonality, which meaningfully shifted the earnings profile beginning in 2025.

Total revenues in the quarter were $111.7 billion, reflecting 2% growth year-over-year driven by disciplined pricing actions and member mix.

Wayne DeVeydt: Turning to medical costs, our reported medical care ratio of 83.9% compares to 84.8% in Q1 2025, and is a result of pricing discipline, strong medical cost management, and favorable reserve development. The first quarter benefited modestly from seasonal dynamics, including lower than expected respiratory activity. Consistent with our guidance, we expect some of these dynamics to moderate as we move further into Q2, particularly given the impact of IRA-related changes to Part D seasonality, which meaningfully shifted the earnings profile beginning in 2025. Importantly, underlying utilization trends remained broadly consistent with our expectations, and we are seeing early signs of improved alignment between pricing and medical cost trends.

We now serve 49.1 million total members domestically, compared to 49.8 million at the end of 2025.

Turning to medical costs.

Importantly, underlying utilization trends remain broadly consistent with our expectations and we are seeing early signs of improved alignment between pricing and medical cost trends.

The operating cost ratio was 13, 8% in the quarter, reflecting the timing of targeted investments across operations.

Discipline, strong medical cost management, and favorable reserve development.

The first quarter benefited modestly from seasonal dynamics, including lower-than-expected respiratory activity.

Technology and care delivery as well as incremental investments in areas, such as AI customer experience cyber security and community engagement.

We also recorded approximately $900 million in incentive compensation for the quarter as compared to $35 million in the first quarter of 2025, reflecting our performance.

Consistent with our guidance, we expect some of these dynamics to moderate as we move further into the second quarter, particularly given the impact of IRA-related changes to Part D seasonality, which meaningfully shifted the earnings profile beginning in 2025.

We continue to expect operating cost ratio trends to normalize over the course of the year as these investments scale and begin to deliver productivity benefits.

Wayne DeVeydt: The operating cost ratio was 13.8% in the quarter, reflecting the timing of targeted investments across operations, technology, and care delivery, as well as incremental investments in areas such as AI, customer experience, cybersecurity, and community engagement. We also recorded approximately $900 million in incentive compensation for the quarter as compared to $35 million in Q1 2025, reflecting our performance. We continue to expect operating cost ratio trends to normalize over the course of the year as these investments scale and begin to deliver productivity benefits. Our operating results were supported by solid operating cash flows of $8.9 billion in the quarter or 1.4 times net income. Our capital priorities remain consistent, invest in growth, strengthen our balance sheet, and return value to shareholders.

Importantly, underlying utilization trends are made broadly consistent with our expectations, and we are seeing early signs of improved alignment between pricing and medical cost trends.

Our operating results were supported by solid operating cash flows of $8 9 billion in the quarter or one four times net income or.

Our capital priorities remain consistent.

Invest in growth strengthen our balance sheet and return value to shareholders.

The operating cost ratio is 13.8% in the quarter, reflecting the timing of targeted investments across operations, technology, and care delivery, as well as incremental investments in areas such as AI customer experience, cybersecurity, and community engagement.

With our cash flow performance. This quarter, we were able to bring the debt to capital ratio down to 42, 9% on track to our year end goal of 40%.

We also recorded approximately $900 million in incentive compensation for the quarter, as compared to $35 million in the first quarter of 2025, reflecting our performance.

We initiated share repurchases earlier than anticipated and expect to deploy at least $2 billion by the end of the second quarter.

Based on our current share price and the deep intrinsic value discount at which our shares are currently trading returning value through share repurchases will remain a priority.

We continue to expect operating cost ratio trends to normalize over the course of the year as these investments scale and begin to deliver productivity benefits.

And we anticipate further capital allocated into strategic acquisitions that support long term growth.

Our operating results were supported by solid operating cash flows of $8.9 billion in the quarter, or 1.4 times net income.

We will be measured in pursuing such assets, while prudently managing our balance sheet.

Wayne DeVeydt: With our cash flow performance this quarter, we were able to bring the debt to capital ratio down to 42.9%, on track to our year-end goal of 40%. We initiated share repurchases earlier than anticipated and expect to deploy at least $2 billion by the end of Q2. Based on our current share price and the deep intrinsic value discount at which our shares are currently trading, returning value through share repurchases will remain a priority. We anticipate further capital allocated into strategic acquisitions that support long-term growth. We will be measured in pursuing such assets while prudently managing our balance sheet. One other item of note for the quarter. As previously discussed, as part of the restructuring actions taken in Q4 2025, we will continue to remove from our 2026 adjusted results the residual impacts of those actions.

Our capital priorities remain consistent: invest in growth, strengthen our balance sheet, and return value to shareholders.

One other item of note for the quarter.

Previously discussed as part of the restructuring actions taken in the fourth quarter of 2025, we will continue to remove from our 2026 adjusted results the residual impacts of those actions.

With our cash flow performance this quarter, we were able to bring the debt to capital ratio down to 42.9%, on track to our year-end goal of 40%.

We initiated share repurchases earlier than anticipated and expect to deploy at least $2 billion by the end of the second quarter.

The net negative impact of these items was about $50 million for the quarter and was excluded from adjusted earnings per share.

This impact includes among other things a $525 million gain on the sale of our UK business, which was successfully closed in the first quarter.

Based on our current share price and the deep intrinsic value discount at which our shares are currently trading, returning value through share repurchases will remain a priority.

And we anticipate further capital allocated into strategic acquisitions that support long-term growth.

We used $400 million of these net proceeds to provide additional funding to the United Health Foundation.

We will be measured in pursuing such assets while prudently managing our balance sheet.

Our intention is to improve the focus and discipline of our core operations, while using proceeds from nonrecurring gains to further advance our mission by helping build healthier communities and a robust health care workforce in.

Wayne DeVeydt: The net negative impact of these items was about $50 million for the quarter and was excluded from adjusted earnings per share. This impact includes, among other things, a $525 million gain on the sale of our UK business, which was successfully closed in Q1. We used $400 million of these net proceeds to provide additional funding to the United Health Foundation. Our intention is to improve the focus and discipline of our core operations while using proceeds from non-recurring gains to further advance our mission by helping build healthier communities and a robust healthcare workforce. In addition, at Optum Health, we had the positive impact of the lost contract offset by the final true-up of losses related to assets which were held for sale as of December and divested during Q1.

One other item of note for the quarter, as previously discussed: as part of the restructuring actions taken in the fourth quarter of 2025, we will continue to remove from our 2026 adjusted results the residual impacts of those actions.

In addition at Optum Health, we had the positive impact of the loss contract offset by the final true up of losses related to assets, which were held for sale as of December and divested during the first quarter.

The net negative impact of these items was about $50 million for the quarter and was excluded from adjusted earnings per share.

While it is still early in the year, we've updated our full year outlook to greater than $18 25 per share.

This impact includes, among other things, a $525 million gain on the sale of our UK business, which was successfully closed in the first quarter.

This refresh view balances the performance we saw in the first quarter with a prudent level of patience to see how the remaining months evolved.

We used 400 million of these. Net proceeds provide additional funding to the United Health Foundation.

Our earnings cadence for the year remains consistent with prior expectations.

We continue to expect approximately two thirds of earnings in the first half of the year and the remaining one third in the second half.

Our intention is to improve the focus and discipline of our core operations, while using proceeds from non-recurring gains to further advance our mission by helping build healthier communities and a robust healthcare workforce.

That said the earnings profile varies meaningfully across the portfolio.

United Healthcare earnings are over 75% weighted to the first half of the year.

Wayne DeVeydt: While it is still early in the year, we've updated our full-year outlook to greater than $18.25 per share. This refreshed view balances the performance we saw in the first quarter with a prudent level of patience to see how the remaining months evolve. Our earnings cadence for the year remains consistent with prior expectations. We continue to expect approximately two-thirds of earnings in H1 and the remaining one-third in H2. That said, the earnings profile varies meaningfully across the portfolio. UnitedHealthcare earnings are over 75% weighted to H1. Similarly, for Optum Health, we expect earnings to moderate throughout the year from Q1 levels, with the significant majority of full-year reported earnings occurring in H1.

In addition, at Optimum Health, we had the positive impact of the loss contract, offset by the final true-up of losses related to assets, which were held for sale as of December and divested during the first quarter.

Similarly for Optum health, we expect earnings to moderate throughout the year from Q1 levels with a significant majority of full year reported earnings occurring in the first half.

While it is still early in the year, we've updated our full-year outlook to greater than $18.25 per share.

In contrast, optum insight and ophthalmology are more naturally weighted to the back half with each generating approximately 60% of earnings in the second half.

This refresh view balances the performance we saw in the first quarter, with a prudent level of patience to see how the remaining months evolved.

This pattern also similarly influences the progression of our medical cost ratio with first half levels more than 250 basis points below the midpoint of our full year guidance and second half levels more than 200 basis points above.

Our earnings cadence for the year remains consistent with prior expectations. We continue to expect approximately two-thirds of earnings in the first half of the year, and the remaining one-third in the second half.

That said, the earnings profile varies meaningfully across the portfolio.

UnitedHealthcare earnings are over 75% weighted to the first half of the year.

Overall this has been a strong start to the year as we continued to improve our business performance and advance our mission.

<unk> back to you. Thanks.

Before we turn to your questions, let me kind of summarize where I think our company stands today.

Wayne DeVeydt: In contrast, Optum Insight and Optum Rx are more naturally weighted to the back half, with each generating approximately 60% of earnings in the H2. This pattern also similarly influences the progression of our medical care ratio, with H1 levels more than 250 basis points below the midpoint of our full year guidance and H2 levels more than 200 basis points above. Overall, this has been a strong start to the year as we continue to improve our business performance and advance our mission. Steve, back to you.

Similarly, for Optum Health, we expect earnings to moderate throughout the year from Q1 levels, with the significant majority of full-year reported earnings occurring in the first half.

This was a solid quarter across all segments positioning us for similarly solid progress going forward.

In contrast, Optum Insight and Optum Rx are more naturally weighted to the back half, with each generating approximately 60% of earnings in the second half.

The historic disciplines and innovations of United Healthcare, a rounding back into place Optum health is clearly focusing on the right basic elements and gaining traction.

Optum insight has untapped potential and an AI centric world.

This pattern, also, similarly influences the progression of our medical cost ratio, with first half levels more than 250 basis points below the midpoint of our full-year guidance, and second half levels more than 200 basis points above.

<unk> to sell sell business and building broader service relationships around that reality.

But to evolve more modern scaled solutions and for users to be ready to embrace them will take more time and my mind later into 2026 and into 2027.

Stephen Hemsley: Thanks, Wayne. Before we turn to your questions, let me kind of summarize where I think our company stands today. This was a solid quarter across all segments, positioning us for similarly solid progress going forward. The historic disciplines and innovations of UnitedHealthcare are rounding back into place. Optum Health is clearly focusing on the right basic elements and gaining traction. Optum Insight has untapped potential in an AI-centric world. They're starting to sell business and building broader service relationships around that reality. To evolve more modern scale solutions and for users to be ready to embrace them will take more time, in my mind, later into 2026 and into 2027. Our enterprise-wide AI ambitions are meaningful, and the agenda is in motion. We're getting after business units and functions alike, and importantly, critical processes that are core to several of our businesses.

Overall, this has been a strong start to the year as we continue to improve our business performance and advance our mission. Steve, back to you.

Thanks, Wayne. Before we turn to your questions, let me kind of summarize where I think our company stands today.

Our enterprise wide AIA ambitions are meaningful and the agenda is in motion.

This was a solid quarter across all segments, positioning us for similarly solid progress going forward.

We're getting after business units and functions alike, and importantly critical processes that are core to several of our businesses.

Healthcare around him, back into place.

This is not just a matter of being more productive at what we already do.

Optum Health is clearly focusing on the right basic elements and gaining traction.

But a re imagining of how we organize operate and work going forward.

Up the inside, has untapped potential in an AI-centric world.

You have any large organizations have ever done things like this at this scale. So we match our desire for speed with Prudence and humility.

They're starting to sell business, sell business, and building broader service relationships around that reality.

We remain focused on advancing business and management processes and continue making progress in areas such as governance transparency.

But to evolve more modern-scale solutions, and for users to be ready to embrace them, will take more time in my mind—later into 2026 and into 2027.

Our enterprise Wyze AI ambitions are meaningful, and the agenda is in motion.

Jake holder experience and more.

Underpinning these steps.

The undertaking the deeply re energize, our mission and culture across this company and effort in which our leaders and people are engaged avidly.

Stephen Hemsley: This is not just a matter of being more productive at what we already do, but a reimagining of how we organize, operate, and work going forward. Few, if any, large organizations have ever done things like this at this scale, so we match our desire for speed with prudence and humility. We remain focused on advancing business and management processes and continue making progress in areas such as governance, transparency, stakeholder experience, and more. Underpinning these steps is the undertaking to deeply reenergize our mission and culture across this company, an effort in which our leaders and people are engaged avidly. This management team believes we are a long way from performing to our full potential, and we're committed to getting to that potential quarter after quarter and reporting to you on our progress. With that, operator, please open the line for questions.

We're getting after business units and functions alike, and importantly, critical processes that are core to several of our businesses.

This is not just a matter of being more productive at what we already do.

<unk> management team believes we are a long way from performing to our full potential and we're committed to getting to that potential quarter after quarter and reporting to you on our progress with that operator. Please open the line for questions.

but a reimagining of how we organize, operate, and work going forward,

If you have any large organizations that have ever done things like this at this scale, so we match our desire for speed with prudence and humility.

The floor is now open for questions. At this time, if you have a question or comment. Please press star one on your Touchtone phone you may remove yourself from the queue by pressing star two on your Touchtone phone.

We remain focused on advancing business and management processes, and continue making progress in areas such as governance transparency.

Stakeholder experience and more.

Ask you to limit yourself to one question. If you ask multiple questions. We will only be answering the first question. So we can respond to everyone in the queue. This morning.

Underpinning these steps is the undertaking to deeply re-energize our mission and culture across this company—an effort in which our leaders and people are engaged avidly.

Our first question comes from AJ Rice with UBS.

Hi, everybody. Thanks for the question.

Just to maybe drill down on the comments around what you're seeing in trend I know the last two years I think the general consensus is the Medicare advantage cost trend was running about 7% to 8% I know who is coming into this year.

Operator: The floor is now open for questions. At this time, if you have a question or comment, please press star one on your touch tone phone. You may remove yourself from the queue by pressing star two on your touch tone phone. We ask you to limit yourself to one question. If you ask multiple questions, we will only be answering the first question so we can respond to everyone in the queue this morning. Our first question comes from A.J. Rice with UBS.

This management team believes we are a long way from performing to our full potential, and we're committed to getting to that potential quarter after quarter and reporting to you on our progress. With that, operator, please open the line for questions.

As described would you had been thinking about pricing for being closer to 10%.

Youre, saying its been consistent so far what you've seen historically in your expectations I'm wondering can we focus in on is it running close to 10% or is it more in the seven to eight.

The floor is now open for questions at this time. If you have a question or comment, please press star 1 on your touchtone phone. You may remove yourself from the queue by pressing star 2 on your touchtone phone. We ask you to limit yourself to one question. If you ask multiple questions, we will only be answering the first question so we can respond to everyone in the queue this morning.

Our first question comes from A.J. Rice with UBS.

A.J. Rice: Hi, everybody. Thanks for the question. Just to maybe drill down on the comments around what you're seeing in trend. I know the last two years, I think the general consensus is the Medicare Advantage cost trend was running about 7% to 8%. I know that coming into this year, you guys described what you had been thinking about pricing for it being closer to 10%. You're saying it's been consistent so far with what you've seen historically and your expectations. I'm wondering, can we focus in on, is it running close to 10% or is it more in the 7% to 8%? If it's accelerating, where is it accelerating, or if it's moderating, where is it moderating?

Accelerating and where.

Does it accelerate or if it's moderated whereas it moderating.

Uh, hi everybody. Uh, thanks for the question. Um,

Yes, good morning, a J. Thank you for the question. So as we referenced broadly speaking across Unitedhealthcare trend is.

Regressing in line with our expectation and again, our focus for 2026 was to focus on margin recovery and product stability across all of these businesses.

And we continue to see the utilization patterns continuing that the high elevated levels that we experienced inside of 2025.

Just to make a drill down on the comments around what you're seeing in trend. I know the last two years, I think the general consensus is the Medicare Advantage cost trend was running about 7 to 8%. I know that is coming into this year. You guys describe what you had been thinking about pricing for it being close to the 10%. You're saying it's been consistent so far with what you've seen historically and your expectations. I'm wondering, can we focus in on, is it running?

You are correct, we were talking about a 7% to 8% trend in Medicare advantage with the pricing of assumption of around 10% into 2026.

Close to 10%, or is it more in the 7 to 8? And if it's accelerated, where—um, as an accelerator; if it's moderated, where is it moderating?

Stephen Hemsley: Tim, do you want to take that?

Wayne DeVeydt: Yeah. Good morning, A.J. Thank you for the question. As we referenced, broadly speaking, across UnitedHealthcare, trend is progressing in line with our expectation. Again, our focus for 2026 was the focus on margin recovery and product stability across all of these businesses. We continue to see the utilization patterns continuing at the high elevated levels that we experienced inside of 2025.

Tim Noel: Yeah. Good morning, A.J. Thank you for the question. As we referenced, broadly speaking, across UnitedHealthcare, trend is progressing in line with our expectation. Again, our focus for 2026 was the focus on margin recovery and product stability across all of these businesses. We continue to see the utilization patterns continuing at the high elevated levels that we experienced inside of 2025.

Seeing some modest favorability in the government programs.

Would that include Medicare advantage commercial very consistent with those expectations.

It's really early right now we'll have a more fulsome view and we talked in Q2 and can get down into some of the specific service categories, but right now the takeaway is modest favorability in government programs, but progressing at those elevated high levels, we're not seeing any inflection point.

Tim Noel: You're correct, we were talking about a 7% to 8% trend in Medicare Advantage with a pricing assumption of around 10% into 2026. We're seeing some modest favorability in the government programs, which would then include Medicare Advantage. Commercial, very consistent with those expectations. It's really early right now. We'll have a more fulsome view when we talk in Q2 and can get down into some of the specific service categories. Right now, the takeaway is modest favorability in government programs, but progressing at those elevated high levels. We're not seeing any inflection point, and we're really comfortable with the pricing posture that we had coming into 2026 based on how things are playing out in the early innings.

And we're really comfortable with the pricing posture that we had coming into 2026 based on how things are playing out in the early innings.

Thanks, Tim next question please.

Our next question comes from Kevin Fischbeck with Bank of America.

Great.

You want to take that good morning AJ? Thank you for the question. So, you know, as we reference broadly speaking across United Healthcare, um, trend is, is, uh, progressing in line with um, our expectation. And again our Focus for 2026 was to focus on margin recovery and products ability of cross, um, all of these businesses. Um, and we continue to see um, the utilization patterns continuing with the high elevated levels that we experienced inside of 2025, um, and you're correct. Um, we were talking about a 78% Trend in Medicare Advantage, um, with the pricing of assumption of around 10%, um, into 2026. Um, we're seeing some modest favorability, um, in the government programs, um, which would then include Medicare Advantage commercial, very consistent with those expectations. Uh, it's it's really early right now. We'll have a more wholesome View and we talked

Following up on that trend question.

You specifically mentioned this in context to the Medicare advantage, but you talked about acuity and provider billing and how you're trying to address that so can you maybe size how much of a trend component is this acuity dynamic and then what exactly you can do sort of invested in how how it may happen and then just just clarify was that really doesn't have any comment or was.

Stephen Hemsley: Thanks, Tim. Next question, please.

In Q2, and can get down into some of the specific service categories, but right now the takeaway is modest favorability in government programs. Um, but progressing at those elevated high levels, we're not seeing any inflection point and we're really, um, comfortable with the pricing posture that we had coming into 2026 based on how things are playing out in the early innings.

Was that a comment across kind of across all products.

Thanks, Tim next question, please.

Operator: Our next question comes from Kevin Fischbeck with Bank of America.

Kevin I think I can this is Tim I think I can't really address that across all products.

Our next question comes from Kevin Fishback with Bank of America.

Kevin Fischbeck: Great. Maybe just following up on that trend question. I think you specifically mentioned this in context to the Medicare Advantage, but you talked about acuity in provider billing and how you are trying to address that. So can you maybe size how much of the trend component is this acuity dynamic, and then what exactly you can do to address it and how it may happen? And then just clarify, was that really just an MA comment, or was that a comment across all products? Thanks.

When you think about trend drivers our assumption is that the activity that we would see for 2026 will be pretty consistent with what we saw in 'twenty five and as I just stated that's really playing out.

What we've done is a couple of things we talked to in the Medicare advantage space of our product positioning I'm leaning more towards HMO based products.

It means to be able to better manage outlier activity, but broadly speaking themes that you can think about in terms of how we're managing it as we have better tools to early identify some of the outlier patterns that we're seeing and where some of the trend drivers inside of 2025.

Tim Noel: Kevin, this is Tim. I think I can really address that across all products. When you think about trend drivers, our assumption is that the activity that we would see for 2026 will be pretty consistent with what we saw in 2025. As I just stated, that's really playing out. What we've done is a couple of things. We talked in the Medicare Advantage space of our product positioning, leaning more towards HMO-based products as a means to be able to better manage outlier activity.

<unk> and engaged early with clinical programs with payment integrity programs and then also in certain cases take network actions, which we have done to be able to address those things and we are making good progress in that area and we will continue to focus on affordability across.

Tim Noel: Broadly speaking, themes that you can think about in terms of how we're managing it is we have better tools to early identify some of the outlier patterns that we're seeing and were some of the trend drivers inside of 2025, and engage early with clinical programs, with payment integrity programs, and also, in certain cases, take network actions, which we have done, to be able to address those things. We are making good progress in that area, and we'll continue to focus on affordability across all the product lines inside of 2026, and then probably be able to offer more information around that in the Q2 call as well.

All of the product lines.

Inside of 2026, and probably be able to offer more information around that in the Q2 call as well.

Thanks, Dave.

Next question please.

We will move next to Andrew Mok with Barclays.

Hi, Good morning, Good morning could you help us unpack, what's driving the outperformance in Optum health this quarter, specifically, how much is contract or benefit driven versus utilization driven and can you clarify what's driving the strong moderation in optum health profit such that the majority of earnings are recognized in the first half.

Okay.

Sure Kristen.

Thanks, Andrew for the question.

We're really encouraged by what we're seeing in the first quarter, which is really a direct reflection of intentional actions that we've taken over the past few months to improve core performance.

Stephen Hemsley: Thanks, Tim. Next question, please.

Operator: We'll move next to Andrew Mok with Barclays.

Andrew Mok: Hi, good morning. Could you help us unpack what's driving the outperformance in Optum Health this quarter? Specifically, how much is contract or benefit driven versus utilization driven? Can you clarify what's driving the strong moderation in Optum Health profits, such that the majority of earnings are recognized in H1? Thanks.

I will just call out two drivers of that performance improvement first we're seeing medical from prior periods restate favorably relative to our expectations.

But this is actually largely concentrated in markets, where we've really focused on clinical and medical management effort. Patrick highlighted one of the examples in the last where we saw an opportunity to help support members in key moments of transition.

Stephen Hemsley: Sure. Krista, please.

Krista Nelson: Yep. Thanks, Andrew, for the question. We're really encouraged by what we're seeing in Q1, which is really a direct reflection of intentional actions that we've taken over the past few months to improve core performance. I'll just call out two drivers of the performance improvement. First, we're seeing medical from prior periods restate favorably relative to our expectations. This is actually largely concentrated in markets where we've really focused on clinical and medical management efforts. Patrick highlighted one of the examples in the West, where we saw an opportunity to help support members in key moments of transition. As we've increased and invested in leadership and process improvement in clinical reviews, we've actually seen a pretty sharp decline and improvement in unnecessary inpatient admissions as well as SNF admissions. Again, just really pleased with what we're seeing.

And as we've increased.

And invested in leadership and process improvement and clinical reviews.

We've actually seen a pretty sharp decline in improvement in unnecessary inpatient admissions as well as sniff admissions and.

Again, just really pleased with what we're seeing.

We expect this performance to continue and also our scaling some of those efforts across all of our markets.

The second driver I would point to is just we've seen continued improvement in operating performance, which includes cost management, which was a really big focus for us last year, but also just kind of fundamentals around operating execution. So. The example, we gave in our opening remarks, just around scheduling that was it.

Key focus for us to make sure we're creating access point for all of our patients and year over year. After that focus we've seen an improvement 12% increase in patient facing hours.

Krista Nelson: We expect this performance to continue and also are scaling some of those efforts across all of our markets. The second driver I would point to is just we've seen continued improvement in operating performance, which includes cost management, which was a really big focus for us last year, but also just kind of fundamentals around operating execution. The example we gave in our opening remarks, just around scheduling. That was a key focus for us to make sure we're creating access points for all of our patients. Year over year, after that focus, we've seen an improvement, 12% increase in patient-facing hours. That is happening actually across all of our regions, where again, we've just really focused on core operating improvement.

That is happening actually across all of our regions, where again, we've just really focused on core operating improvement.

We've actually seen a pretty sharp decline in improvement in unnecessary inpatient admissions as well as, and again, just really pleased with what we're seeing. We expect this performance to continue and are also scaling some of those efforts across all of our markets.

So I would say wallets early those two things are really giving us confidence that we're focused on the right places and that we would expect some of this improved performance to continue rest of year I think to your last question just around the pacing.

With the move of Optum financial into Optum insight.

Optum health is really resembles our risk business in terms of seasonality. So that's really why the majority the significant majority of really on the earnings will occur in the first half versus the second half.

Um the second driver, I would point to is just we've seen continued Improvement in operating performance which includes cost management which was a really big Focus for us last year but also just kind of fun fundamentals around operating execution. So the example we gave in our opening remarks just around, um, scheduling that was a key Focus for us to make sure we're creating access points for all of our patients and year-over-year. After that Focus. We've seen an improvement. 12%. Increase in patient facing hours.

Christopher Thank you so mostly utilization and the result of management great. Thank you next question. Please.

Krista Nelson: I would say while it's early, those two things are really giving us confidence that we're focused in the right places and that we would expect some of this improved performance to continue rest of year. I think to your last question, just around the pacing. With the move of Optum Financial into Optum Insight, Optum Health really resembles a risk business in terms of seasonality. That's really why the significant majority, really, of the earnings will occur in H1 versus H2.

Um, that is happening actually across all of our regions where again, we've just really focused on core operating improvements.

Our next question comes from Justin Lake with Wolfe Research.

Thanks, Good morning wanted to stay on Austin pulp for a minute I appreciate all the detail there I wanted to make sure.

So, I would say while it's early. Those 2 things are really giving us confidence that we're focused in the right places and that we would expect some of this improved performance to continue rest of the year.

First of all the $1 3 billion of adjusted earnings.

Does that is that the right comparable to the guidance of 1575 at the midpoint on an adjusted basis and then Christa you mentioned that.

I think to your last question, just around the pacing, um, with the move of Optum Financial into Optimum insights, Optum health is really resembles a risk business in terms of seasonality. So that's really why the majority the significant majority really of the earnings will occur in the first half versus the second half.

Stephen Hemsley: Krista, thank you. Mostly utilization and the result of management. Great. Thank you. Next question, please.

Some of the benefit was from <unk> I'd like to understand what the.

What the internal expectation was because that $1 3 billion significantly higher than I think anybody expected. So just wanted to understand what we were expecting internally and maybe how much of the difference versus a terminal with few R&D versus.

Operator: Our next question comes from Justin Lake with Wolfe Research.

Krista, thank you. So, mostly utilization and the result of management, right? Thank you. Next question, please.

Our next question comes from Justin Lake with Wolfe Research.

Justin Lake: Thanks. Good morning. I wanted to stay on Optum Health for a minute, and I appreciate all the details there. I wanted to make sure, first of all, the $1.3 billion of adjusted earnings

Run rate.

And then lastly, maybe you could share something similar on kind of how the business is running at <unk>.

Thanks, good morning. Uh, I wanted to stay on off and help for a minute and I appreciate all the details there, you know I wanted to make sure the first of all the 1.3 billion of adjusted earnings

Justin Lake: Is that the right comparable to the guidance of $1.575 at the midpoint on an adjusted basis? Krista, you mentioned that some of the benefit was from PYD. I'd like to understand what the internal expectation was, because that $1.3 billion is significantly higher than I think anybody expected. I just want to understand what you were expecting internally and maybe how much of the difference versus internal was PYD versus run rate. Lastly, maybe you could share something similar on kind of how the business is running at Optum Insight, Rx versus internal expectations, because those looked a little lighter than consensus was expecting. Thank you.

Versus internal.

Expectations, because those looked a little lighter than consensus.

We are expecting thank you.

Okay, I think thats pretty adjustment if I'm counting.

So maybe Wayne you might take the first.

Yes, Chris do the second.

And then we will.

Maybe come back to the third yes.

So Justin let me let me unpack. This I think I can I think I can address this fairly easily as you think about Optum health, Yes, you should be comparing the one 3 billion of adjusted earnings to the guide of 1.5 dollars 75 that we provided originally for our true run rate, though we believe that is a clean view of looking at the business and removes.

Expectation was because that 1.3 billion significantly higher than I think anybody expected I just want to understand what you were expecting internally and maybe how much of the difference versus internal was pyd versus uh run rate.

Justin Lake: Thanks.

Noncash accounting implications of the loss contract as well as the final disposition of assets in the quarter.

Stephen Hemsley: Okay. I think that's three, Justin, if I'm counting. Maybe Wayne, you might take the first.

And then, lastly, maybe you could share something similar on to kind of how the business is running it up, and inside RX versus internal, uh, expectations because those looked a little lighter than uh, it says this was expected. Thank you, thanks.

okay, I think that's 3 Justin if I'm counting, um,

One thing I would say around Optum insight and Rx very similar to Optum health.

Wayne DeVeydt: Yeah.

Stephen Hemsley: Krista, the second, and then we'll maybe come back to the third.

So, maybe Wayne, you might take the first.

Yeah, Chris to the second.

It's very important to recognize the prepared remarks that these are fully burdened by incentive compensation. This year in Q1, and they were not fully burdened in Q1 of last year, comparing $900 million of roughly $35 million. So that really creates an unusual anomaly.

Wayne DeVeydt: Yeah. Justin, let me unpack this. I think I can address this fairly easily. As you think about Optum Health, yes, you should be comparing the $1.3 billion of adjusted earnings to the guide of $1.575 that we provided originally for our true run rate. We believe that is a clean view of looking at the business and removes non-cash accounting implications of the loss contract as well as the final disposition of assets in the quarter. The one thing I would say around Optum Insight and RX, very similar to Optum Health, it's very important to recognize in the prepared remarks that these are fully burdened by incentive compensation this year in Q1, and they were not fully burdened in Q1 of last year, comparing 900 million to roughly 35 million.

For our sell side investor analysts out there that are trying to model. This and that was why we tried to call that out I would say that all four segments did actually exceed our internal plan expectations Christie do you want to maybe address the prior year, yes, yes. So to your question just on the some of the prior period development.

While some of this was favorable to our expectations I. Just also want to reiterate it is it's really based on specific actions that we took in the fourth quarter. So the performance is coming in a little bit better, but I'm not surprised by how it's coming in given some of the intentional work that we've done.

Wayne DeVeydt: That really creates an unusual anomaly for our sell-side investor analysts out there that are trying to model this, and that was why we tried to call that out. I would say that all four segments did actually exceed our internal plan expectations. Krista, do you want to maybe address the prior year?

Um and then we'll we'll maybe come back to the third. Yeah, Justin, let me, let me unpack this, I think I can. Um, I think I can address this fairly easily as you think about Optimum Health. Yes, you should be comparing the 1.3 billion of adjusted earnings to the guide of 1.575 that we provided originally, uh, for our true run rate. We believe that is a clean view of looking at the business and removes, uh, non-cash accounting, implications of the loss contract, as well as the final disposition of assets in the quarter. Um, the 1 thing I would say around Optimum Insight in RX, very similar to Optimum Health. Uh, I think it's very important to recognize the prepared remarks. Uh, that these are fully burdened by incentive compensation this year in q1, uh, and they were not fully burdened. In q1 of last year. Comparing 900 million and roughly 35 million so that

I also mentioned that we are seeing some improvement in our in our operating cost which is also contributing.

But also it's early in the year and we're taking a really prudent approach to make sure that we see another quarter of medical mature.

Krista Nelson: Yeah. To your question, just on some of the prior period development. While some of this was favorable to our expectations, I just also want to reiterate it's really based on specific actions that we took in Q4. The performance is coming in a little bit better, but I'm not surprised by just how it's coming in, given some of the intentional work that we've done. I also mentioned that we are seeing some improvement in our operating costs, which is also contributing. Also it's early in the year, and we're taking a really prudent approach to make sure that we see another quarter of medical maturity. Frankly, also just continue to focus on some of the basic blocking and tackling. There still remains a significant amount of opportunity for Optum Health to achieve its full potential.

And then frankly also just continue to focus on some of the basic blocking and tackling there still remains a significant amount of opportunity for optum help to achieve its full potential and so again, we're just focused on core performance and improving that consistently across our markets. Thanks. Kristen next question. Please.

And we will move now to Stephen Baxter with Wells Fargo.

Yeah, Hi, Thanks, a couple questions about Medicare advantage, I guess with visibility to the final rate, we'd love to hear if you could discuss your confidence level on further margin recovery for 2027, and then just as an add on to that specific question. As we think about the moving parts have you indicated that you would participate in a balanced program for <unk> ones and if you are.

That really creates an unusual anomaly, uh uh for uh our our cell side investor analysts out there that are trying to model this. And that was why we tried to call that out. I would say that all 4 segments did actually exceed our internal plan, expectations uh Krista, do you want to maybe address the priority? Yeah, yeah. So, to your question, just on the, some of the prior period development. Um, while some of this was favorable to our expectations, I just also want to reiterate it is it's really um, based on specific actions that we took in the fourth quarter. So the performance is coming in a little bit better, but I'm not surprised by just how it's coming in. Given some of the intentional work that we've done. Um, I also mentioned that we are seeing some improvement in our in our operating costs, which is also contributing, um, but also it's early in the year and, you know, we're taking a really prudent approach to make sure that we see another uh, quarter of medical mature. Um, and then frankly also just continue to focus on some of the

Indicating that you participate you anticipate the industry thresholds for participation would be Matt. Thank you.

Krista Nelson: Again, we're just focused on core performance and improving that consistently across our markets.

Bobby you want to take that yes, thanks, Stephen for the question so.

Stephen Hemsley: Thanks, Krista. Next question, please.

Operator: We'll move now to Stephen Baxter with Wells Fargo.

So on the final notice maybe just to start I do want to express my appreciation for the active and ongoing engagement that we've had with CMS. The changes made by CMS in the final notice were both important and impactful for the program and more importantly for the Medicare beneficiaries.

Basic blocking and tackling there. Still remains a significant amount of opportunity for Optum Health to achieve its full potential. And so again, we're just focused on core performance and improving that consistently across our markets. Thanks, Kristen. Next question, please.

Stephen Baxter: Yeah. Hi. Thanks. A couple questions about Medicare Advantage, I guess with visibility to the final rate. I would love to hear if you could discuss your confidence level and further margin recovery for 2027. Then just as an add-on to that specific question, as we think about the moving parts, have you indicated that you'd participate in the balance program for GLP-1s? If you are indicating that you'd participate, do you anticipate the industry thresholds for participation will be met? Thank you.

And we'll move now to Stephen Baxter with Wells Fargo.

<unk> also need to acknowledge the reality that the widely expected medical trend for 2027 is still meaningfully above these funding levels.

So consistent with our strategy in 2026, we're going to remain focused on financial sustainability product durability, and then the path to margin recovery that were on within that 2% to 4% long term range that we've discussed.

Stephen Hemsley: Bobby, you want to take that?

Yeah, hi, thanks. A couple questions about Medicare Advantage. I guess with visibility to the final rate, I would love to hear if you could discuss your confidence level on further margin recovery for 2027. And then just as an add-on to that specific question, as we think about the moving parts—have you indicated that you’d participate in a balanced program for GLP-1s? And if you are indicating the need to participate, do you anticipate the industry thresholds for participation will be met? Thank you.

Dan Schumacher: Yeah. Thanks, Stephen, for the question. On the final notice, maybe just to start, I do want to express my appreciation for the active and ongoing engagement that we've had with CMS. The changes made by CMS in the final notice were both important and impactful for the program and more importantly for the Medicare beneficiaries. However, also, I need to acknowledge the reality that the widely expected medical trend for 2027 is still meaningfully above these funding levels. Consistent with our strategy in 2026, we're going to remain focused on financial sustainability, product durability, and then the path to margin recovery that we're on within that 2% to 4% long-term range that we've discussed.

'twenty 'twenty six maybe just to hit that one as a jumping off point, we're only a couple months ended the year, but feel good about achieving the 50 basis point year over year margin advance that we had previewed last quarter.

And then for 2027, our aspiration is to be in the upper half of the 2% to 4% long term range and doing that while continuing to deliver the quality the.

Bobby, you want to take that? Yeah, thanks Stephen for the question. Um, you know, so on the final notice, maybe just to start, I do want to express my appreciation for, you know, the active and ongoing engagement that we've had with CMS, the changes, made by CMS, and the final notice were both important and impactful for the program and, and more importantly, for the Medicare beneficiaries. Um, however, also, I need to acknowledge the reality that the widely expected medical trend for 2027 is still meaningful above these funding levels.

The value and delivering on the full expectations that I know that our members have us.

As it relates to your question about the balanced program. So we've been a good active dialogue with both CMS and <unk> on that front.

Dan Schumacher: For 2026, maybe just to hit that one as a jumping off point, we're only a couple months into the year, but feel good about achieving the 50 basis point year-over-year margin advance that we had previewed last quarter. For 2027, our aspiration is to be in the upper half of the 2% to 4% long-term range, and doing that while continuing to deliver the quality, the value, and delivering on the full expectations that I know that our members have of us. As it relates to your question about the balance program, so we've been in good active dialogue with both CMS and CMMI on that front. We'd like to find a path to yes there on coverage over time, but there are some notable challenges and outstanding questions with the currently planned structure.

We'd like to find a path to yes, there on coverage over time, but there are some notable challenges in outstanding questions with the currently planned structure.

We're still working through that process internally and we look forward to continuing the dialog with CMS.

So consistent with our strategy in 2026, we're going to remain focused on financial sustainability, product durability, and then the path to margin recovery that we're on within that 2 to 4% long-term range that we've discussed, you know, for 2026 maybe just to hit that 1 as a jumping off point. We're only a couple months into the year but feel good about achieving, you know, the 50 basis point year-over-year margin advance that we had previewed last quarter. Um and then for 2020,

We provided some specific recommendations that we believe would serve all stakeholders really well.

As you know we will be participating in the bridge demo here starting in July and I think we'll learn a lot about the best way to advance this priority through that experience. Thanks for the question.

7, our aspiration is to be in the upper half of the 2 to 4% long-term range and doing that will continue to deliver the, the quality, um, the value. And um, delivering on the full expectations that I know that our members have of us.

Thank you next question please and.

And our next question comes from Lisa Gill with J P. Morgan.

Um, as it relates to your question about the balance program, we've been in a good, active dialogue with both CMS and CMMI on that front.

Thanks, very much good morning.

Just want to understand a couple of things the first would be the optimum and <unk> fairly being back half weighted it seems like that's a little bit higher than it has been historically so is there anything to think about there and then secondly, since we last spoke last quarter. The <unk> legislation has changed has past and just wanted to understand.

Dan Schumacher: We're still working through that process internally, and we look forward to continuing the dialogue with CMS. We've provided some specific recommendations that we believe would serve all stakeholders really well. As you know, we'll be participating in the bridge demo here starting in July, and I think we'll learn a lot about the best way to advance this priority through that experience. Thanks for the question.

Are there any incremental investments that you need to make I know you've been a lot more transparent than others, but there is there anything to think about and if you do come to a settlement with the FTC do we need to think about re domicile in the GPO to the U S and is there any cost there.

Stephen Hemsley: Thank you. Next question, please.

Serve all stakeholders really well. Um, as you know, we'll be participating in the bridge demo here, starting in July and I think we'll learn a lot about the best way to advance this priority, through that experience. Thanks for the question.

Operator: Our next question comes from Lisa Gill with JP Morgan.

Thank you. Next question, please.

Lisa Gill: Thanks very much. Good morning. Just want to understand a couple of things. The first would be the Optum Insight and Optum Rx really being back half weighted. It seems like that's a little bit higher than it's been historically. Is there anything to think about there? Then secondly, since we last spoke last quarter, the PBM legislation has passed, and just want to understand, are there any incremental investments that you need to make? I know you've been a lot more transparent than others. Is there anything to think about? If you do come to a settlement with the FTC, do we need to think about re-domiciling the GPO to the US, and is there any cost there?

And our next question comes from Lisa Gill with JP Morgan.

Yes, we will handle that.

Separately when do you want to talk about the slope.

One thing I would say on the slope is for Optum insight I would view this as what.

What we're doing is a couple of things one is.

Slowly decommissioning old products that we're not AI based and reinvesting in those products through the investments that youre getting the slow rundown of those products in Q1, and then the investments to transfer those over into more AI based and I think youll see the benefits of that coming into the back half relative to <unk>, we are onboarding almost 800.

New clients this year of which the vast majority of those will be going into next year in terms of the actual run rate. So you're getting the full impact of of those onboarding starting early in the year, but I think as the year progresses, and we begin to migrate and bring folks over youll start to see that subside, but I would also just remind you that we we've assumed a little bit.

Uh, thanks very much. Good morning. Um just want to understand a couple of things. The first would be uh the optimum site and Optum RX you know currently being back half weighted. It seems like that's a little bit higher than it's been historically. So is there anything to think about there and then secondly, um, since we last spoke last quarter, the PBM legislation has changed has passed and just want to understand. Um, are there any incremental Investments that you need to make? I know you've been a lot more transparent than others, um, but is there anything to think about? And if you do come to settlement with the FTC, do we need to think about red dohuk that? The GPO to the US and is there any cost there?

Stephen Hemsley: Yeah. We'll handle those separately. Wayne, do you want to talk about the slope?

Wayne DeVeydt: Yeah. The one thing I would say on the slope is, for Optum Insight, I would view this as what we're doing is a couple things. One is slowly decommissioning old products that were not AI based and reinvesting in those products through the AI investments. You're getting the slow rundown of those products in Q1, and then the investments to transfer those over into more AI based stuff. I think you'll see the benefits of that coming into the H2. Relative to Optum Rx, we are onboarding almost 800 new clients this year, of which the vast majority of those will be going into next year in terms of the actual run rate. You're getting the full impact of those onboardings starting early in the year.

Lower script volume, obviously due to the membership that we had but as the year progresses, I think youll see some of our G&A initiatives.

Investments coming through and that will actually improve the outlook in the back half.

Thanks, Wayne and Patrick and John do you want to address <unk>.

I'll handle with those separately. When do you want to talk about? The the slope? Yeah, the 1 thing I would say on the slope is for Optimum Insight, uh I would view this as uh what we're doing is a couple things 1 is um I'm slowly decommissioning old products that were not AI based and reinvesting in those products through the AI Investments. So you're getting the slow rundown of those products in q1 and then the Investments to transfer those over into more AI based. Uh, and I think you'll see the benefits of that coming into the back half, um, relative to open tomorrow.

Sure happy to.

Thanks again for the question Lisa So if I look at <unk> first let me hit the I'll hit the Punch line, which is we've accounted for these.

These impacts in our guidance both for the remainder of 2026 as well as our.

Wayne DeVeydt: I think as the year progresses and we begin to migrate and bring folks over, you'll start to see that subside. I would also just remind you that we've assumed a little bit of lower script volume, obviously, due to the membership that we had. As the year progresses, I think you'll see some of our G&A initiatives and AI investments coming through, and that will actually improve the outlook in the back half.

Our out year guidance.

As it relates to the GPO just hit that one head on our GPO is domiciled in the U S.

So no impact no impact as we think about GPO broadly you don't want to hit a couple of things.

First.

Stephen Hemsley: Thanks, Wayne. Patrick and Jon, do you want to address PBM?

We are on boarding almost 800, new clients this year of which majority of those will be, you know, going into next year, in terms of the actual run rate. So you're getting the full impact of of those on boarding starting early in the year, but I think as the year progresses, and we begin to migrate and bring folks over, you'll start to see that subside. And I would also just remind you that, you know, we we've assumed a little bit of of of lower script volume, obviously, due to the membership that we had. But as the year progresses, I think you'll see some of our GNA initiatives and and AI Investments coming through and that will actually improve the Outlook in the back half.

Look at what's happening in Tennessee, and I would just say that we're really concerned about.

[Company Representative] (Optum): Sure. Happy to. Thanks again for the question, Lisa. If I look at PBM, first, I'll hit the punchline, which is we've accounted for these impacts in our guidance both for the remainder of 2026 as well as our out year guidance. As it relates to the GPO, just to hit that one head on, our GPO is domiciled in the US. No impact as we think about GPO. Broadly, I want to hit a couple of things. First, look at what's happening in Tennessee, and I would just say that we're really concerned about that legislation as we sit here today, primarily for what it means for access. What's playing out in Tennessee is targeted at the retail pharmacy space, but the impact here goes well beyond the intended scope of retail.

Patrick Conway: Sure. Happy to. Thanks again for the question, Lisa. If I look at PBM, first, I'll hit the punchline, which is we've accounted for these impacts in our guidance both for the remainder of 2026 as well as our out year guidance. As it relates to the GPO, just to hit that one head on, our GPO is domiciled in the US. No impact as we think about GPO. Broadly, I want to hit a couple of things. First, look at what's happening in Tennessee, and I would just say that we're really concerned about that legislation as we sit here today, primarily for what it means for access. What's playing out in Tennessee is targeted at the retail pharmacy space, but the impact here goes well beyond the intended scope of retail.

Thanks, Wayne and Patrick and John. Do you want to address TBM?

That legislation as we see or do they primarily for what it means for access.

Whats playing out in Tennessee is targeted at the retail pharmacy space, but the impact here goes well beyond.

Well beyond the intended scope of retail.

Specifically for us it will harm access for for nearly 150000, Tennessee with complex conditions than cancer think HIV big serious mental illness that rely on specialty and behavioral health pharmacies designed to uniquely serve those populations so very concerned.

Sure, happy to, uh, thanks again for the question Lisa. So, if I look at PBM, first, let me hit the, I'll hit the punch line, which is we've accounted for, uh, these impacts in our guidance. Both for the remainder of 2026, as well as, um, you know, our our out here, uh, guidance. Um, as it relates to the GPO just to hit that 1 head on. Our GPO is, is doyald in the US. Um, so, uh, no impact, uh, no impact, as we think about GPO, broadly, you know, I want to hit a couple of things. Um,

We'll continue to advocate for those that we serve and Tennessee elsewhere.

Beyond that with other emerging emerging legislation I want to say that our work over the last two years has put us in the leadership position in the industry and you referenced that with the transparency comments.

It goes even beyond transparency Theres four drivers here, Lisa maybe just to touch on first is the <unk>.

First, uh, you know, look at what's happening in, in, uh, Tennessee. And I will just say that, you know, we're really concerned about, uh, that legislation as we see today, primarily for what it means for access. Um, you know, what's playing out in Tennessee is targeted at the retail pharmacy space, but the impact here goes well beyond—uh, well beyond retail.

[Company Representative] (Optum): Specifically for us, it will harm access for nearly 150,000 Tennesseans with complex conditions, think cancer, think HIV, think serious mental illness, that rely on specialty and behavioral health pharmacies designed to uniquely serve those populations. Very concerned, and we'll continue to advocate for those that we serve in Tennessee and elsewhere. Beyond that, with other emerging legislation, I want to say that our work over the last two years has put us in the leadership position in the industry, and you referenced that with the transparency comments. It goes even beyond transparency. There's four drivers here, Lisa, maybe just to touch on. First is the independent pharmacy stability. As you know, again, we don't play in the retail space. We rely on a vibrant pharmacy network for more than 80% of the claims that flow through our PBM.

Patrick Conway: Specifically for us, it will harm access for nearly 150,000 Tennesseans with complex conditions, think cancer, think HIV, think serious mental illness, that rely on specialty and behavioral health pharmacies designed to uniquely serve those populations. Very concerned, and we'll continue to advocate for those that we serve in Tennessee and elsewhere. Beyond that, with other emerging legislation, I want to say that our work over the last two years has put us in the leadership position in the industry, and you referenced that with the transparency comments. It goes even beyond transparency. There's four drivers here, Lisa, maybe just to touch on. First is the independent pharmacy stability. As you know, again, we don't play in the retail space. We rely on a vibrant pharmacy network for more than 80% of the claims that flow through our PBM.

Independent pharmacy stability.

As you know again, we don't play in the retail space, we rely on a vibrant <unk>.

Pharmacy network for more than 80% of the claims that flowed through our <unk> and so.

We're well ahead of the curve with a 100%.

Of our independent pharmacies reimburse debt at.

Specifically for us you know it will harm access for for nearly 150,000 Tennessee in with with complex conditions. Think cancer think HIV think serious mental illness that rely on on specialty and behavioral healthy is designed to uniquely serve those populations. So very concerned, um, and we'll continue to Advocate, uh, for those that we serve in Tennessee and elsewhere.

Our cost based reimbursement mechanism, we're leaning into health system pharmacies through our Cps.

Business as well and expanding the reach for those pharmacies. The second driver is consumer affordability on that front <unk> now serves 14 million members and between price edge specialty savings IQ and our critical drug affordability.

Beyond that, uh, with other emerging, emerging legislation, I want to say that, you know, our work over the last two years has put us in the leadership position in the industry, and in reference to that, with the transparency comments, it goes even beyond transparency. There are four drivers here. Uh, Lisa, maybe just a touch on—

We'll deliver more than $1 billion to $5 this year and affordability to the patients that we serve through this business.

[Company Representative] (Optum): We're well ahead of the curve with 100% of our independent pharmacies reimbursed at a cost-based reimbursement mechanism. We're leaning into health system pharmacies through our CPS business as well and expanding the reach for those pharmacies. The second driver is consumer affordability. On that front, Price Edge now serves 14 million members. Between Price Edge, Specialty Savings IQ, and our critical drug affordability, we'll deliver more than $1.5 billion this year in affordability to the patients that we serve through this business. The third driver is the patient provider experience. Patrick mentioned PreCheck Prior Auth on this one. We're moving that to scale with the Cleveland Clinic to serve more than 20 health systems this year. Continuing the work in the streamlining of prior authorizations for 180 drugs. I'll round out, Lisa, on payer transparency.

The third driver is the patient provider experienced Patrick mentioned free check my prior off on this one we're moving that from scale with the Cleveland clinic to serve.

Patrick Conway: We're well ahead of the curve with 100% of our independent pharmacies reimbursed at a cost-based reimbursement mechanism. We're leaning into health system pharmacies through our CPS business as well and expanding the reach for those pharmacies. The second driver is consumer affordability. On that front, Price Edge now serves 14 million members. Between Price Edge, Specialty Savings IQ, and our critical drug affordability, we'll deliver more than $1.5 billion this year in affordability to the patients that we serve through this business. The third driver is the patient provider experience. Patrick mentioned PreCheck Prior Auth on this one. We're moving that to scale with the Cleveland Clinic to serve more than 20 health systems this year. Continuing the work in the streamlining of prior authorizations for 180 drugs. I'll round out, Lisa, on payer transparency.

First is the, um, Independent Pharmacy stability. Um, as you know, again, we don't plan the retail space. We rely on a vibrant Pharmacy Network for more than 80% of the claims that flow through our PBM. And so—

Served more than 20 health systems, this year and continuing the work and the streamlining of prior authorizations for 180 drugs that will round out lease on payer transparency. This is what's driving our growth. We had mentioned a record growth year, we're experiencing another strong selling season.

And thats largely driven by our compelling 15 part transparency guarantee for those we serve so feel good about our leadership position have accounted for all of us and our guys. Thanks for taking the question.

We're well ahead of the curve with a 100%, um, of our independent pharmacies, you know, reimbursed at at, uh, a cost-based reimbursement mechanism, really leaning in to Health System pharmacies through our CPS, uh, business as well and, uh, expanding the Reach For Those pharmacies. The second drivers consumer affordability on that front price Edge. Now, serves 14 million members and between price Edge specialty savings IQ and our critical drug affordability. Uh we'll deliver more than a billion and a half dollars this year in affordability to the patients that we serve through this business.

Patrick do you want to comment just on overall optum because it's come in a couple of ways look all three segments. As we said exceeded expectations. If you look at Optum health core management of medical trend and operational execution.

<unk> is a lot of momentum in the marketplace.

[Company Representative] (Optum): This is what's driving our growth. Wayne mentioned a record growth year. We're experiencing another strong selling season, and that's largely driven by a compelling 15-part transparency guarantee for those that we serve. We feel good about our leadership position. We have accounted for all this in our guidance. Thanks again for the question.

Patrick Conway: This is what's driving our growth. Wayne mentioned a record growth year. We're experiencing another strong selling season, and that's largely driven by a compelling 15-part transparency guarantee for those that we serve. We feel good about our leadership position. We have accounted for all this in our guidance. Thanks again for the question.

Winning new clients and renewals, but also ahead and the policy agenda, and leading and then Optum insight as Wayne and others mentioned Sandeep.

Sandeep and team, leading AI first products and services that we're making those investments now and those investments are starting to pay dividends and as Steve said in the opening we will pay dividends in the long term and ahead of our PVA business practices because we've been at this for a couple of years. So great question. Thank you. Our next one please.

Stephen Hemsley: Patrick, do you want to comment?

Ing season, and that's largely driven by a compelling 15-part transparency guarantee for those that we serve. So, feel good about our leadership position; we've accounted for all this in our guidance. Thanks again for the question.

Patrick Conway: Just on overall Optum, because it's come up in a couple ways. Look, all three segments, as we said, exceeded expectations. If you look at Optum Health, core management of medical trend and operational execution. Optum Rx has a lot of momentum in the marketplace, winning new clients and renewals, but also ahead in the policy agenda and leading. Optum Insight, as Wayne and others mentioned, Sandeep and team leading AI-first products and services, that we're making those investments now. Those investments are starting to pay dividends, and as Steve said in the opening, will pay dividends in the long term.

Patrick. You want to comment just on overall Optum because it's come in a couple ways, look, all 3 segments. As we said, exceeded expectations. If you look at Optum health,

And we'll go to Dave Windley with Jefferies.

Hi, Good morning, Thanks for taking my question I wanted to come back to Optum health or soften telephone the.

The PDR and the lives associated with that I believe are in a couple of tranches of debt.

That add up to a million lives that youre kind of in various stages of negotiation and scaling on I wondered if you could give us an update on the.

The status of those.

Stephen Hemsley: Yeah. Ahead on PBM business practices, because we've been at this for a couple of years. Great question. Thank you. Next one, please.

And are you at a point, where youre, having conversations with new provider groups or new populations of members that you could add into your value based care base.

Core management of medical Trend and operational execution. Uh, optimar X has a lot of momentum in the, uh, Marketplace. Uh, winning new clients and renewals but also ahead in the policy agenda and leading, and then Optimum insight as as Wayne and others mentioned, uh, Sandeep and team leading AI first products and services that we're making those Investments now. And those Investments are starting to pay dividends. And as Steve said, in the opening, we'll pay dividends in the long term. Yeah. And ahead on on PBM business practices, because we've been at this for a couple of years. So uh, great question, thank you. And next 1, please.

Operator: We'll go to David Windley with Jefferies.

And we'll go to Dave Windley with Jefferies.

David Windley: Hi. Good morning. Thanks for taking my question. I wanted to come back to Optum Health on the PDR and the lives associated with that, I believe, are in a couple of tranches that add up to 1 million lives that you're in various stages of negotiation and scaling on. I wondered if you could give us an update on the status of those. Are you at a point where you're having conversations with new provider groups or new populations of members that you could add into your value-based care base? Or are we still right sizing down to the logical profitable base of lives that you can manage in VBC? Thank you.

Are we still right sizing down to the logical profitable.

Base of lives that you can manage and BBC. Thank you.

Okay, if I understand that basically there's two pieces to that the PDR and then kind of how we are engaging in the market. So Wayne I'll touch on the PDR and Crystal will pick up the market.

Yeah. Thanks, Dave Good morning, let me just quickly on the PDR.

Hi, good morning. Thanks for taking my question. I wanted to come back to option health or you know, soften Health on the um the PDR and the lives associated with that. I believe are in a couple of tranches of of that, add up to a million lives that you're kind of, in various stages of negotiation and and scaling on. And I wondered, if you could give us an update on the step status of those

We laid out what we estimated the PDR to be for the full year it was north of $600 million.

And that was a reflection of contracts that we fully anticipate either renegotiating to appropriate rates or we will delegate or exit youll see the number is actually slightly slightly lower in Q1 that is a reflection of some of the assets that we disposed of in the quarter.

Stephen Hemsley: Okay. If I understand that, basically there's two pieces to that, the PDR and then how we're engaging in the market. Wayne will touch on the PDR and Krista will pick up the market. Yeah. Thanks, Dave. Good morning. Let me just quickly on the PDR. We laid out what we estimated the PDR to be for the full year. It was north of $600 million. That was a reflection of contracts that, we fully anticipate either renegotiating to appropriate rates or we will de-delegate or exit. You'll see the numbers actually slightly lower in Q1. That is a reflection of some of the assets that we disposed of in the quarter, that had a PDR associated with them. The team is still in active negotiations. I'll let Krista comment on that.

Tim Noel: Okay. If I understand that, basically there's two pieces to that, the PDR and then how we're engaging in the market. Wayne will touch on the PDR and Krista will pick up the market. Yeah. Thanks, Dave. Good morning. Let me just quickly on the PDR. We laid out what we estimated the PDR to be for the full year. It was north of $600 million. That was a reflection of contracts that, we fully anticipate either renegotiating to appropriate rates or we will de-delegate or exit. You'll see the numbers actually slightly lower in Q1. That is a reflection of some of the assets that we disposed of in the quarter, that had a PDR associated with them. The team is still in active negotiations. I'll let Krista comment on that.

And and are you at a point where you're having conversations with new provider groups or or new populations of members that you could add into your value based care base? Or are we still right sizing down to the The Logical profitable um base of lives that you can manage in BBC? Thank you.

That had a PDR associated with them, but.

The team is still in active negotiations I'll, let Chris to comment on that.

Yes. Thank.

Thanks for the question. So I mean, we are really in active negotiations and continue to partner with all of our payer partners.

Okay, if if I understand that basically, there's 2 pieces that the PDR and then kind of how we're engaging in the market. So Wayne will touch on the PDR and Crystal will pick up the market.

Just across our portfolio and really pleased with the progress underway. We started significantly earlier, we put a lot more data and infrastructure and support and leadership behind us and frankly at this distance. They are still a number of levers we can work through with all of our payers, whether that's product and benefit design for two.

127.

Network opportunities looking at the market and the footprint that we're in as well as three calibrating appropriate rates and I think just like we mentioned I'll reiterate our confidence in making sure that we get these items settled and get into a better position for 2027.

Uh, yeah, thanks, Dave. Good morning. Um, let me just quickly on the PDR. Uh, we laid out what we estimated the PDR to be for the full year—it was north of $600 million. Uh, and that was a reflection of contracts that we fully anticipate either, uh, renegotiating to appropriate rates, or we will, uh, delegate or exit. Um, you'll see the numbers actually slightly, slightly lower in Q1. Uh, that is a reflection of some of the assets that we disposed of in the quarter, uh, that had a PDR associated with them. But, uh, uh, the team is still in active negotiations. I'll let Chris comment on that.

Wayne DeVeydt: Yeah. David Windley, thanks for the question. We are really in active negotiations and continue to partner with all of our payer partners, just across our portfolio, and really pleased with the progress underway. We started significantly earlier. We've put a lot more data, infrastructure, support, and leadership behind this. Frankly, at this distance, there's still a number of levers we can work through with all of our payers, whether that's product and benefit design for 2027, network opportunities, looking at the markets and the footprints that we're in, as well as recalibrating appropriate rates. I think just like Wayne DeVeydt mentioned, I'll reiterate our confidence in making sure that we get these items settled and get into a better position for 2027.

Krista Nelson: Yeah. David Windley, thanks for the question. We are really in active negotiations and continue to partner with all of our payer partners, just across our portfolio, and really pleased with the progress underway. We started significantly earlier. We've put a lot more data, infrastructure, support, and leadership behind this. Frankly, at this distance, there's still a number of levers we can work through with all of our payers, whether that's product and benefit design for 2027, network opportunities, looking at the markets and the footprints that we're in, as well as recalibrating appropriate rates. I think just like Wayne DeVeydt mentioned, I'll reiterate our confidence in making sure that we get these items settled and get into a better position for 2027.

Yeah, um, Dave, thanks for the question. So we—I mean, we are really in active negotiations and continue to partner with all of our payer partners, um, just a

I think that kind of reflects a little bit of the cultural change in terms of the way we are engaging in how we are.

With relationships kind of across the board in a constructive way.

So great response, Christa and the next question please.

And we will move to Ann Hynes with Mizuho Securities.

Good morning. Thank you I just wanted to focus on.

I know it sounds like you're doing a lot of investment can you share maybe the targets you have.

And how do you think AI will come to the cost side, maybe like SG&A do you have a target internally.

Stephen Hemsley: I think that kind of reflects a little bit of the cultural change in terms of the way we're engaging and how we are working with relationships across the board in a constructive way. Great response, Krista, and next question, please.

Across our portfolio and pleased with the progress underway. We started significantly earlier. We've put a lot more data and infrastructure and support and Leadership behind this. And frankly at this distance, there's still a number of levers. We can work through with all of our payers, whether that's product, and benefit design for 2027, um, Network opportunities, you know, looking at the markets and the footprints that we're in, as well as recalibrating appropriate rates and I think just like Wayne mentioned. I'll reiterate our confidence in making sure that we get um, these items settled and get into a better position for 2027.

Thank you I could save and then just also on the revenue side with Optum insight do you think your investment in AI like structurally shifts and the growth rate of that segment. Thanks.

Yes, I think it's true on both fronts. So sandeep do you want to start.

I think that kind of reflects a little bit of the cultural change in terms of the way we're engaging, and how we are working with with relationships, uh, kind of across the board in the constructive way. Um, so great, the response Krista, and the next question, please,

Operator: We'll move to Ann Hynes with Mizuho Securities.

Sure. Thanks Ann for the question.

And we'll move to Anne Hines with Mazu ho securities.

Ann Hynes: Good morning. Thank you.

Stephen Hemsley: Thanks.

Ann Hynes: I just want to focus on AI. I know it sounds like you're doing a lot of investment. Can you share some maybe targets you have on how you think AI will, from the cost side, maybe like SG&A, do you have a target internally how you think it could save? Just also on the revenue side with Optum Insight, do you think your investment in AI could structurally shift the growth rate of that segment? Thanks.

As we said earlier, we are spending about $1 5 billion.

Across Unitedhealth group.

Think about it this way a part of this is explicitly invested into software products and platform.

Good morning. Thank you. I just want to focus on, um, AI. I know it sounds like you’re doing a lot of investment. Can you share some, maybe, targets you have?

Accelerating optum insights transition of business models into AI software and services firm.

The remaining two thirds is spent across signature end to end processes and functions across Unitedhealth group.

On how you think AI will, um, from the cost side, maybe like SG&A. Do you have a target internally? How do you think it could save? And then just also on the revenue side with Optum Insight—do you think your investment in AI could, like, structurally shift the growth rate of that segment?

Stephen Hemsley: Yeah, I think that's true on both fronts. Sandeep, do you want to start?

Let me give you some examples areas like consumer member experience you must have noticed we just launched every agenda to AI chatbot answering remember questions for United Healthcare, which will be expanded to over 20 million members by the year end.

[Company Representative] (Optum Insight): Sure. Thanks, Ann, for the question. As we said earlier, we're spending about $1.5 billion in AI across UnitedHealth Group. Think about it this way. A third of this is explicitly invested into software products and platform, accelerating Optum Insight's transition of business models into an AI-first software and services firm. The remaining two-thirds is spent across signature end-to-end processes and functions across UnitedHealth Group. Let me give you some examples. Areas like consumer member experience. You must have noticed we just launched Avery, a generative AI chatbot answering member questions for UnitedHealthcare, which will be expanded to over 20 million members by the year-end. Another example is an administrative simplification. Tim spoke about prior auth and the automation in UHC, as well as Optum Health and Optum Rx. A third area is clinical workflows.

True on both fronts. Uh, so Sandeep, do you want to start?

Uh, sure thanks. And for the question. Uh, as we said, uh, earlier, we spend about 1.5 billion dollars in AI across United Health Group.

And other example is an administrative simplification, Tim spoke about dried up and the automation and UHC as well as Optum health and optimal Rex.

Uh, think about it this way. A third of this is explicitly invested into software products and platform.

A third area is clinical workflows for example, ambient rollout, both physicians and nurses and Optum health and then summarization capabilities for nurses and clinical reviews.

Accelerating Optum Insights transition, uh, of business models into an AI-for-software-and-services firm.

The remaining two-thirds is spent across signature end-to-end processes and functions across UnitedHealth Group.

And then functions like HR finance marketing fundamentally re imagining these processes and areas.

In the end all internal investments in AI use cases is routed through optum insight and has the potential to be commercialized outside of UHD.

We just launched Avery, a generative AI chatbot answering member questions for UnitedHealthcare, which will be expanded to over 20 million members by the year end.

And we expect to return.

Conservatively of two is two one on these programs over the next few years many of them being back within the next 12 to 18 months.

Another example is in administrative simplification. Tim spoke about prior ops and the automation in UHC, as well as Optum Health and Optum Rx.

[Company Representative] (Optum Insight): For example, Ambient rollout for physicians and nurses in Optum Health, and then summarization capabilities for nurses and clinical reviews. Functions like HR, finance, marketing, fundamentally reimagining these processes and areas. In the end, all internal investments in AI use cases is routed through Optum Insight and has the potential to be commercialized outside of UHG. We expect a return conservatively of 2 to 1 on these programs over the next few years, many of them paying back within the next 12 to 18 months. Optum Insight AI-first products are already seeing great external traction. Example, this quarter we launched digital prior auth in keeping with the enterprise priority on prior auths. We already have a couple of payer clients and provider clients using them, and other 50 clients in the pipeline.

Optum insight AI first products are already seeing great external traction.

A third area is clinical workflows, for example, uh, ambient rollout for physicians and nurses in Optum Health.

And then some summarization capabilities for nurses and clinical reviews.

<unk> this quarter, we launched digital pried off in keeping with the enterprise priority on fraud ops.

Already have a couple of payer clients and provider clients using them in other 50 clients in the pipeline.

And then functions like HR, finance, marketing—fundamentally reimagining these processes and areas.

And the early results are that tradeoff submitted through our software.

In the end, all internal investments in AI use cases are routed through Optum Insight, and have the potential to be commercialized outside of UHG.

Shown in 96% approval rates on for submissions.

Um, and we expect to return.

Optum real an AI first platform launched a couple of quarters ago.

Now has half a billion transactions year to date and expect to close the year at over $2 5 billion transactions and.

Conservatively, if you know, 2-to-1 on these programs over the next few years, many of them paying back within the next 12 to 18 months.

<unk>, new AI consulting arm as already signed its first few contracts, helping companies like labcorp through their operational AI initiatives. So that should give you a good sense of AI inside and outside the company. Thank you.

Optum Insight AI first products are already seeing great external traction.

For example, this quarter, we launched digital prior auth in keeping with the Enterprise priority on prior ops.

[Company Representative] (Optum Insight): The early results are that prior auth submitted through our software have shown a 96% approval rate on first submissions. Optum Real, an AI-first platform launched a couple of quarters ago, now has 0.5 billion transactions year to date and expects to close the year at over 2.5 billion transactions. Optum AI, our new AI consulting arm, has already signed its first few contracts helping companies like Labcorp through their operational AI initiatives. That should give you a good sense of AI inside and outside the company. Thank you.

We already have a couple of payer clients and provider clients, and using them, another 50 clients are in the pipeline.

Thanks, Sandeep, so I think really good potential I think we're going to be very measured as we go about this.

In terms of expectation because I think it's new for for everybody.

And the early results are that prior not submitted through our software have shown a 96% approval rate on first submissions,

But definitely we are leaning into this we think it can be.

Optum Real and AI First platform launched a couple of quarters ago.

Quite impactful to our enterprise end to this.

Old industry. So good question. Thank you next next please.

Now has half a billion transactions year till date and expects to close the year at over 2 and a half billion transactions.

Our next question comes from Erin Wright with Morgan Stanley.

Great. Thanks, I wanted to follow up on on the AI and automation Brian.

Stephen Hemsley: Thanks, Sandeep. I think really good potential. I think we're going to be very measured as we go about this, in terms of expectation, because I think it's new for everybody. Definitely we are leaning into this. We think it can be quite impactful to our enterprise and to this whole industry. Good question. Thank you. Next please.

What should we expect in terms of the savings accelerating in 2027 28, yes.

Dr. Me, our new AI Consulting arm, has already signed its first few contracts, helping companies like LabCorp through their operational AI initiatives, so that should give you a good sense of AI inside and outside the company. Thank you. Thanks, and deep. So I think, really good potential. I think we're going to be very measured as we go about this.

Should we anticipate that.

The cost and contributions or how do we weigh the costs and the contributions of some of the efficiency gains there and how could that accelerate or evening drive upside to the long term target margins across the different segments and then just one quick follow up on capital deployment just in terms of buybacks you announced the 2 billion today I guess I just.

Uh, in terms of, uh, expectation, because I think it's new for everybody. Uh, but definitely we are leaning into this. We think it can be, um,

Quite impactful to our Enterprise and uh to this uh old industry. So um good question. Thank you next. Next please.

Operator: Our next question comes from Erin Wright with Morgan Stanley.

Our next question comes from Aaron Wright with Morgan Stanley.

Erin Wright: Great. Thanks. I wanted to follow up on the AI and automation front. What should we though expect in terms of these savings accelerating in 2027, 2028? I guess, should we anticipate that the cost and contributions or how do we weigh the cost and then contributions of some of the efficiency gains there? How could this accelerate or even drive upside to the long-term target margins across the different segments? Then just one quick follow-up on capital deployment. Just in terms of buybacks, you announced the $2 billion today. I guess I just wanted to be clear what was embedded in guidance from a share repurchase standpoint. Thanks.

Wanted to be clear what was embedded in guidance from a share repurchase standpoint. Thanks.

I'll, let Wayne handle the second one the first one is a very good question. This is kind of uncharted territory. When you think about the scope that this could have so we aren't giving any guidance with respect to the.

Compounding effect, if you will of these kinds of changes.

Cross the business, but it will commented reinforce something Sandeep said and that is we're really deploying it kind of.

<unk> the enterprise looking at our large core processes with an idea of.

Modernizing those and then ultimately taking those two outside marketplace and then at the end of the large overall functions.

Great, thanks. I wanted to follow up on on the AI and automation front and what should we so expect in terms of these savings accelerating in 202728? I guess should we anticipate that, you know, you know the cost and contributions are how do we weigh the cost and then contributions of some of the efficiency gains there and how could this accelerate or even drive upside to the long-term Target margins across the different segments and then just 1 um, quick. Follow-up on Capital deployment, just in terms of BuyBacks, you announced the 2 billion today. I think it was in guidance from a share, repurchase standpoint. Thanks.

Stephen Hemsley: I'll let Wayne handle the second one. The first one is a very good question. This is kind of uncharted territory when you think about the scope that this could have. We aren't giving any guidance with respect to the compounding effect, if you will, of these kinds of changes across the business. I will comment and reinforce something Sandeep said, and that is, we're really deploying it kind of across the enterprise, looking at our large core processes with an idea of modernizing those, and then ultimately taking those to the outside marketplace, and then the large overall functions typical of an organization of this size and scope. I think the potential is great. I think it would be very premature to offer you kind of guidance in terms of what the impacts of those could be.

Typical of the organization of this size and scope and I think the potential is great, but I think it would be.

Very premature to offer you kind of guidance in terms of what the impact of those could be.

But it wouldn't be making these investments if we didn't think that thesis.

We're not only the <unk>.

Strategically important to the maintaining the.

Competitiveness of our organization, but also having.

Long term positive impact.

Mostly for the consumer and the experience.

That others will have with US and then secondarily with very natural productivity lifts and it should produce.

Well, let Wayne handle the second 1. The first 1 is, you know, a very good question. This is kind of Uncharted Territory. When you think about the scope that this could have. So we aren't giving any guidance with respect to, you know, the compounding effect if you will of these kinds of changes, uh, across the the business, but it will comment and reinforce something Sandeep. Said, and that is we're really deploying it kind of uh, across the Enterprise looking at our large core processes with an idea of of modernizing those and then ultimately taking those to the outside Marketplace and then our, you know, the large overall functions, uh typical of a organization of this size and scope and I think the potential is great.

When you want to take the other part.

Relative to capital deployment, our original guidance was approximately $2 5 billion back half loaded. So think of later Q3 Q4.

Stephen Hemsley: I wouldn't be making these investments if we didn't think that these were not only strategically important to maintaining the competitiveness of our organization, but also having a long-term positive impact, mostly for the consumer and the experience that others will have with us, and then secondarily, the very natural productivity lifts that it should produce. Wayne, you want to take the other part?

At this stage with the intrinsic value discount, we see but we thought it was important for shareholders that we would get at that sooner and the confidence we have in our results. So no changes in the guidance, but view it as we are moving quicker at this stage.

But I I think it would be, you know, very premature to offer. You kind of guidance in terms of what the impact of those could be. Um, but it wouldn't be making these Investments if we didn't think that these uh were not only strategically important to the, you know, maintaining the um, competitiveness of our organization but also having uh, long-term positive impact

And ultimately headed back to kind of where we were so this is kind of restoring where we were in terms of this program that had been in place for almost 20 years.

Next question please.

Mostly for the consumer and the experience that others will have with us, and then, secondarily, the very natural productivity list that it should, uh, produce.

Our next question comes from George Hill from Deutsche Bank.

Wayne DeVeydt: Yeah. Relative to capital deployment, our original guidance was approximately $2.5 billion H2 loaded, so think of later Q3, Q4. At this stage, with the intrinsic value discount we see, we thought it was important for shareholders that we would get ahead of that sooner, and the confidence we have in our results. No changes in the guidance, but view it as we are moving quicker at this stage.

Hey, good morning, guys and thanks for taking the question Wayne a quick accounting question is could you quantify the <unk> or the impact of the <unk> in the quarter and is there a way to break that out between the.

UHC impact and the <unk> impact thanks.

Hey, George good morning.

I think ultimately you'll see when we file the Q <unk> on a net basis is around a little bit north of $500 million for the organization.

Stephen Hemsley: Ultimately headed back to kind of where we were. This is kind of restoring where we were in terms of this program that had been in place for almost 20 years. Next question, please.

And the confidence we have in our results. So, um, no changes in the guidance, but view it, as we are moving quicker at this stage.

While that benefits quarter, it's important to recognize that we believe we have established somewhat of a similar level of conservatism or prudent view I would say at March 31 until we can see more of this development in April and May from Q1, I think at this stage it would be it would just be prudent to have a bit of patients right now.

And ultimately head back to where we were. So, this is kind of restoring where we were in terms of this program that had been in place for those 20 years.

Next question, please.

Operator: Our next question comes from George Hill from Deutsche Bank.

Our next question comes from George Hill, from Deutsche Bank.

George Hill: Hey, good morning, guys, and thanks for taking the question. Wayne, a quick accounting question is, could you quantify the PYD or the impact of the PYD in the quarter, and is there a way to break that out between the UHC impact and the OH impact? Thanks.

That's roughly the net number that came through from the prior year.

Yes, I do think I appreciate that.

Uh hey, good morning guys. And thanks for taking the question. We need a quick accounting. Question is, could you quantify the pyd or the impact of the pyd in the quarter and is there a way to break that out between the, uh, the UHC impact and the O impact? Thanks.

Everybody needs to understand that.

Wayne DeVeydt: Hey, George, good morning. I think ultimately you'll see, when we file the 10-Q, PYD on a net basis is around a little bit north of $500 million for the organization. While that benefits the quarter, it's important to recognize that we believe we've established somewhat of a similar level of conservatism or prudence view, I would say, at March 31. Until we can see more of this development in April and May from Q1, I think at this stage it would just be prudent to have a bit of patience right now. That's roughly the net number that came through from the prior year.

Hey George, good morning. Um,

This is the first quarter second quarter is usually quite informative in terms of the rest of the year.

And so we are.

I think appropriately positioning ourselves.

Based upon what we see so far will take about two more questions.

Please and then we'll.

And will be available to answer questions through the balance of the day.

Next question please.

Our next question comes from Michael Hall with Baird.

Alright. Thank you just a quick clarification first how much of the $400 million contribution to the Unitedhealth Foundation is Optum insight and then my real question just one.

George Hill: Yes. Okay. Appreciate that.

You'll see when we file the queue pyd on a net basis is around a little bit, north of 500 million dollars for the organization. Um while that benefits a quarter. It's important to recognize that, we believe we've established somewhat of a similar level of conservatism or prudent view I would say, uh, at March 31, until we can see more of this development in April and May from q1, I think at this stage it would be, it would just be proved to have a bit of patience right now but uh that's rough. That's roughly the net number that came through from the prior year.

Yes, I do think that.

Stephen Hemsley: Everybody needs to understand that this is Q1. Q2 is usually quite informative in terms of the rest of the year. We're, I think, appropriately positioning ourselves based upon what we see so far. We'll take about 2 more questions, please, and then we'll be available to answer questions through the balance of the day. Next question, please.

Yes.

Everybody needs to to understand that this is the first quarter. Second quarter is usually

My real question just wanted to ask about the proposed MA risk model Recalibration. So I understand is now delayed but when it is eventually implemented possibly.

2028, a significant number of chronic condition code reimbursement is being cut.

quite informative, uh, in terms of the rest of the year. And so we're, you know, I think appropriately positioning ourselves, uh, as based on what we see so far. We'll take about 2 more questions.

Uh, please and then, uh, we'll we'll we'll be available to answer questions through those balance of the day.

Magnitude of the task with what appears concerning to US a top 10 HCC codes.

Operator: Our next question comes from Michael Ha with Baird.

So, next question, our next question comes from Michael Hall with beard.

Michael Ha: Hi. Thank you. Just quick clarification first. How much of the $400 million contribution to the UnitedHealth Foundation is Optum Insight? And then my real question, just wanted to ask about the proposed MA risk model recalibration. I understand it's now delayed, but when it is eventually implemented, possibly in 2028, a significant number of chronic condition code reimbursement is being cut, and the magnitude of those cuts is what appears concerning to us. The top 10 HCC codes being chronic conditions making up the majority of RAF prevalence all across the industry and presumably higher for value-based care providers. With the reimbursement of some of those codes being cut down to 20%, this concerns us for Optum Health. Again, I know it's delayed, but when it is eventually implemented, how do you expect the impact to Optum Health versus industry average?

Chronic condition, making up the majority of RAF prevalent all across the industry and presumably higher for value based care providers.

With the reimbursement of some of those things.

Down to 20%.

Hi. Thank you, quick. Clarification first, how much of the 400 million contribution to the United house foundation is Optum insight and then my real question just wanted

In terms of for Oppenheimer. So again I know, it's delayed but when it is eventually implemented how do you expect the impact to Optum health versus the industry average if you still believe the impacts should be roughly in line with the industry average. So how do you justify that when your value based care business is purpose built to care for poly chronic members and therefore disproportionally exposed.

So these material cost.

Conditions. Thank you.

Well I'm not sure that's a question or a statement.

But we will respond to that but let's take the first part.

The.

Yes, the relative relative to the 400 million contribution to the foundation, we're trying to match those contributions relative to where the gains resides so when we sold and closed our European operations. The gains were all within Optum insight north of $500 million in the entire foundation then came out of Optum insight and that is included in the <unk>.

Michael Ha: If you still believe the impact should be roughly in line with the industry average, then how do you justify that when your value-based care business is purpose-built to care for polychronic members and therefore disproportionately exposed to these material cuts to chronic conditions? Thank you.

Yeah. Sorry. And then my real question, just wanted to ask about the proposed ma risk model wreck calibration. So, I understand it's now delayed, but when it is eventually implemented, possibly in 2028, a significant number of chronic condition code, reimbursement is being cut and the magnitude of those cuts is what appears concerning to us? The top 1086 codes being chronic conditions making up the majority of Wrath, we're having all across the industry and presumably higher for Value based care providers. So, with the reimbursement of some of those codes being touched, you know, down to 20%. This concerns us for Optimal Health. So again, I know it's delayed, but when it is eventually implemented, how do you expect the impact to Optimum Health versus industry? Average, if you still believe the impact,

Conciliation.

Our adjusted segments that we provided in the press release.

Going to be a pattern, we followed to the extent, we get gains and things like that we are invested in the notion of the foundation can be used as a means to really advance health care system kind of the part of the responsibility we bear for that.

Should be roughly in line with the industry average, and how do you justify that when your value-based care business is purpose-built to care for polychronic members, and therefore disproportionately exposed to these material cuts to chronic conditions? Thank you.

Stephen Hemsley: Well, I'm not sure if that's a question or a statement, but we'll respond to that. Let's take the first part.

Wayne DeVeydt: Yeah. Relative to the $400 million contribution to the foundation, we are trying to match those contributions relative to where the gains reside. When we sold and closed our European operations, the gains were all within Optum Insight, north of $500 million, and the entire foundation then came out of Optum Insight. That is included in the reconciliation to our adjusted segments that we provided in the press release.

Um, well, I'm not sure if that's a question or a statement, um, but we'll respond to that, though. Let's take the first part. Um, the

We did that in the past and had kind of strayed from that in the last few years and just were returning to that theme.

With real commitment and Bobby do you want to talk about start with it yes.

Yeah, Thanks, Michael I'll start with kind of our view on modernization of the program and I'll kick it to Chris to then talk a little bit about the Optum health dynamic.

Stephen Hemsley: That's going to be a pattern we follow to the extent we get gains and things like that. We are invested in the notion the foundation can be used as a means to really advance the healthcare system, kind of be part of the responsibility we bear for that. We did that in the past, and had kind of strayed from that in the last few years and just we're returning to that theme with real commitment. Bobby, do you want to talk about, start with the-

You know, the relative—relative to the, uh, $400 million contribution to the Foundation. Uh, we are trying to match those contributions relative to where the gains reside. So when we sold and closed our European operations, the gains were all within Optum Insight, uh, north of $500 million, and the entire Foundation, then, came out of Optum Insight. And that is included in the reconciliation, uh, to our adjusted segments that we provided in the press release.

So maybe just kind of big picture.

We're again very appreciative of the active and ongoing engagement with CMS.

In the zones around modernization opportunity I'm not going to speculate on what changes could happen to the program in future years that said, we do believe there are opportunities to improve the program. We support modernization. We for example advocated for chart linking which was finalized in the final rule and final notice.

That's going to be a pattern. We followed to the extent we get gains and things like that. We are invested in the notion that the Foundation can be used as a means to really advance the health care system, kind of be part of the responsibility we bear for that.

Dan Schumacher: Yeah. Thanks, Michael. I'll start with kind of our view on modernization of the program, and I'll kick it to Krista, then talk a little bit about the Optum Health dynamic. Maybe just kind of big picture. We're, again, very appreciative of the active and ongoing engagement with CMS in the zones around modernization opportunity. I'm not going to speculate on what changes could happen to the program in future years. That said, we do believe there are opportunities to improve the program. We support modernization. We, for example, advocated for chart linking, which was just finalized in the final rule and final notice. We are committed to making the system simpler, more efficient, more transparent, and Krista will get into it, but we see value-based care as a critical and foundational tool to ensuring that success long-term.

Um, we did that in the past, um, and had kind of strayed from that in the last few years, and just—we're returning to that theme, um, uh, with real commitments. And, Bobby, do you want to talk about, to start with, the—

We are committed to making the system simpler more efficient more transparent and crystal will get into it but we see value based care as a critical and foundational.

Tool to ensuring that success long term in terms of risk adjustment, specifically, we actually wrote to our modernization agenda in response to both the advanced notice and proposed technical rule. So big picture, we remain supportive of policy that advance it improves the program.

But I think as you saw in this last rate cycle. It's important that we all acknowledge that this work is complicated.

It should be done thoughtfully with appropriate testing and staging and with programs stability at the forefront and in that regard we stand ready to partner in any and all respects. So maybe then Chris if you want to add on the value based care up and help US yes, I would just start by echoing what Bobby said, just again appreciative of the improvements.

Dan Schumacher: In terms of risk adjustment specifically, we actually wrote to our modernization agenda in response to both the advance notice and proposed technical rule. The big picture, we remain supportive of policy that advances and improves the program. I think as you saw in this last rate cycle, it's important that we all acknowledge that this work is complicated, and it should be done thoughtfully with appropriate testing, staging, and with program stability at the forefront. In that regard, we stand ready to partner in any and all respects. Maybe then, Krista, if you want to add on the value-based care Optum Health piece.

CMS made more importantly, their commitment to the Medicare advantage program and really foundational their commitment to value based care.

The direction of their comments just continue to reinforce what our patients experiencing what our payers experience, which is our value based care model delivers better outcomes improved health status better experience and a lower total cost of care for the patients that we serve.

And that alignment of incentives is really central to Cms's galore.

Krista Nelson: Yeah. I would just start by echoing what Bobby said. Just again, appreciative of the improvements that CMS made. More importantly, their commitment to the Medicare Advantage program, and really foundational, their commitment to value-based care. The direction of their comments just continue to reinforce what our patients experience and what our payers experience, which is our value-based care model delivers better outcomes, improved health status, better experience, and a lower total cost of care for the patients that we serve. That alignment of incentives is really central to CMS's goal, which they have stated is for all of Medicare, not even just for Medicare Advantage. Again, just reiterating, our commitment to value-based care has really never been stronger.

Which they have data for all of Medicare not even just for Medicare advantage and so again, just reiterating our commitment to value based care has really never been stronger.

Our focus is really on just improving our execution and our core operating performance and our model.

Working closely with our payer partners to thoughtfully expand this to more patients and more providers over time and at this distance.

Really too early to suggest what the impact could be for 2028, but I would also just say inside of some of the proposed changes there were.

Wrote to our modernization agenda. In response to both the advance notice and proposed. Technical rule. The big picture, we remain supportive of policy that advances and improves the program. Um, like as you saw in this last rate cycle, it's important that we all acknowledge that this work is complicated. Um, and it should be done thoughtfully, with appropriate, testing and staging and with program stability at the Forefront. And in that regard, We Stand ready to partner in any and all respects. Um, so maybe then Chris, if you want to add on the, the value based care Optum Health piece? Yeah, I, I would just, you know, start by echoing what Bobby said, just again, appreciative of the improvements that CMS made more importantly, their commitment to the Medicare Advantage program and really foundational their commitment to Value based care. Um, you know, the direction of their comments, just continue to reinforce what our patients experience and what our payers experience, which is our value. Based care model delivers better outcomes, improved health status, better experience and a lower total cost of

Puts and takes or complex populations and so.

And Thats really where our model has a significant benefit for patients as well as our payer partners and again, we just remain focused on core fundamentals improving outcomes for our patients and making sure that we can continue to scale value based care for more patients over time.

Krista Nelson: Our focus is really on just improving our execution and our core operating performance in our model, working closely with our payer partners to thoughtfully expand this to more patients and more providers over time. At this distance, it's really too early to suggest what the impact could be for 2028. I would also just say inside of some of the proposed changes, there were puts and takes for complex populations. That's really where our model has a significant benefit for patients as well as our payer partners. Again, we just remain focused on core fundamentals, improving outcomes for our patients, and making sure that we can continue to scale value-based care for more patients over time. Thanks.

And that should carry the day at the end of the day so.

care for the patients that we serve. And that alignment of his incentives is really Central to cms's goal, which it, which they have stated is for all of Medicare, not even just for, um, Medicare Advantage and, and so, again, just reiterating our commitment to Value. Based care is really never been stronger. Um, our focus is really on just improving our execution and our core operating performance and our model. Um, working closely with our payer Partners to thoughtfully. Expand this to

We have time for one more question and then we'll be done.

The more patience and more providers over time.

Our last question comes from Sarah James with Cantor Fitzgerald.

Thank you I wanted to try to unpack MLR outperformance under the lens of cost category can.

Can you speak to trends across that position.

But alan drugs, how those are performing and the different books versus expectation and then bridging that to your earlier comment on traction you're seeing from engaging members and clinical program. The network actions can you clarify what cost category Youre seeing that move the needle on thank you.

Dan Schumacher: That should carry the day at the end of the day. We have time for one more question, and then we'll be done.

And at this distance, it's really too early to suggest what the impact could be for 2028. But I would also, just say inside of some of the proposed changes there were, um, puts and takes or kind of populations. And so, um, and that's really where our model has a significant benefit for patients as well as their payer partners. And again, we just remain focused on core fundamentals, improving outcomes for our patients and making sure that we can continue to scale, value, based care for more patients over time. Thanks. And that should carry the day at the end of the day. So, um,

Sure Tim do you want to comment on that yes. Thanks, Sir for the question. So again little early to get into that level of specificity on utilization patterns, but I think generally this modest outperformance that we've cited in government programs under the umbrella of UHC.

We have time for one more question, and then we'll be done.

Operator: Our last question comes from Sarah James with Cantor Fitzgerald.

Our last question comes from Sarah James with Cantor Fitzgerald.

Sarah James: Thank you. I want to try to unpack MLR outperformance under the lens of cost categories. Can you speak to trends across physician, hospital, and drugs, how those are performing in the different books versus expectations? Bridging that to your earlier comments on traction you're seeing from engaging members in clinical programs and network actions, can you clarify what cost category you're seeing that move the needle on? Thank you.

Thank you. I want to try to unpack mlr outperformance under the lens of cost categories.

Which is largely aligned with our expectations.

There is no category I would spike out.

As being.

Our out of line compared to what our expectations were and the modest favorability that we've talked about around government programs is really kind of across the board based on the visibility that we have at this distance in Q1.

Can you speak to Trends across them, physician hospital and drugs, how those are performing in the different books versus expectations and then bridging that to your earlier comments on traction, you're seeing from engaging numbers in clinical programs and network actions. Can you clarify what cost categories? You're seeing that move the needle on, thank you.

Dan Schumacher: Sure. Tim, do you want to comment on it?

Tim Noel: Yes. Thanks, Sarah, for the question. Again, a little early to get into that level of specificity on utilization patterns, but I think generally this modest outperformance that we've cited in government programs under the umbrella of UHC, which is largely aligned with our expectations. There's no category I would single out as being out of line compared to what our expectations were, and the modest favorability that we've talked about around government programs is really kind of across the board based on the visibility that we have at this distance in Q1. Thanks.

Patrick just on the Optum side.

<unk> is purpose built to help payers employers manage drug cost and we will save billions and billions of dollars again this year focus on affordable access to drugs.

As John described have been leading in the marketplace on Optima health is as Christa described these are programs that decrease admissions for patients keep them out of the hospital.

Get people into their homes, where they want to be.

And care for them across the care continuum, and it's really purpose built for some of the most complex patients that need this care the most and our payer partners, whether that's unitedhealthcare others as Bobby said and we hear this from external players as well once that care for their members because it's better cost better quality better experience and more affordable care.

Patrick Conway: Patrick? Yeah. Just on the Optum side of the house. Optum Rx is purpose-built to help payers and employers manage drug costs, and we'll save billions and billions of dollars again this year focused on affordable access to drugs, as John described, and been leading the marketplace. On Optum Health, as Krista described, these are programs that decrease admissions for patients, keep them out of the hospital, get people into their homes where they want to be, and care for them across the care continuum. It's really purpose-built for some of the most complex patients that need this care the most. Our payer partners, whether that's UnitedHealthcare or others, as Bobby said, and we hear this from external payers as well, want that care for their members because it's better quality, better experience, and more affordable care. Thanks, Patrick. Thank you all for the time today.

Thanks, Patrick so thank you all for that.

Sure, Tim. Do you want to comment on it? Yes. Um, thanks sir for the questions. So again, um, a little early to get into that level of specificity on utilization patterns, but I I think generally this modest outperformance that we've cited in government programs, you know, Under the Umbrella of UHC, which is largely aligned with our expectations. Um, there's no category I would spike out, um, as being, you know, um, out out of line compared to the what our expectations were and the modest favorability that we've talked about around government, programs is really kind of AC the board based on the visibility that we have at this distance in q1. Thanks Patrick. Yeah, just on the optimum side of the house. Optum RX is purpose-built to help payers and employers manage uh, drug costs. And we'll say billions and billions of dollars. Again this year focus on affordable access to drugs uh as John described and have been leading the marketplace.

For the time today.

Because we kind of build on our momentum as we get started in this year.

On Optum Health, as Chris described, these are programs that decrease admissions for patients, keep them out of the hospital.

Realize theres a great deal more work to do.

Give people into their homes, where they want to be.

Youll see sustainable progress.

To position this enterprise.

To serve all of it.

Our stakeholders.

Progressively better way quarter after quarter, that's kind of our agenda.

Uh, and care for them across the care. Continuum. And it's really purpose-built for some of the most complex patients that need this care. The most, and our payer Partners, whether that's United, Healthcare or others.

And.

So we're going to return to that and we will see you next quarter. Thank you.

As Bobby said, and we hear this from external players as well, once that care for their members because it's better—better quality, better experience, and more affordable care.

This does conclude today's conference. Thank you for your participation.

Dan Schumacher: Because we kind of build on the momentum as we get started in this year. We realize there's a great deal more work to do. I think you'll see sustainable progress to position this enterprise to serve all of its stakeholders in a progressively better way quarter after quarter. That's kind of our agenda, and so we're going to return to that, and we'll see you next quarter. Thank you.

Thanks Patrick. So, thank you all for the um, for the time today. Um,

You know, because we kind of build on the momentum as we get started in. In this year, we realize there’s a great deal more work to do, uh, and I think you’ll see sustainable progress, uh, to position this enterprise, uh, to serve all of its, um,

With that, we'll see you next quarter. Thank you.

Operator: This does conclude today's conference. Thank you for your participation.

This does conclude today's conference. Thank you for your participation.

Q1 2026 UnitedHealth Group Inc Earnings Call

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