UnitedHealth Group Incorporated

Good morning and welcome to the United Health Group's second quarter 2026 earnings conference call. A question and answer session will follow United Health 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 present expectations. A description of some of the risks and uncertainties can be found in the reports we file with the Securities and Exchange Commission, including the cautionary statements included in our current and periodic filing. 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.unitedhealthgroup.com. Information presented on this call is contained in the earnings release we issued this morning and in our form 8K dated July 16th, 2026, which may be accessed from the investor relations page of the company's website. I will now turn the conference over to the chairman and chief executive officer of UnitedHealth Group, Stephen Hemsley.

Thank you. Good morning, everyone, and thank you for joining us. Our second quarter results in updated full year 2026 outlook demonstrate continuing progress toward delivering more consistent and dependable performance. They are a sign of stronger broad-based performance disciplines taking hold in each of our businesses and a restless desire to drive mission-aligned change across the enterprise and advance our social impact. UnitedHealthcare has improved performance in its Medicare businesses through thoughtful benefit planning and design, all while remaining respectful of persistently elevated medical costs. Our Medicaid business is in line with expectations as we continue to work with states on ensuring appropriate rates. Our commercial benefits business, consistent with the broader and more diverse commercial market it serves, continues to experience higher than expected cost trends due to factors Tim Knoll will discuss shortly. At Optum, we're seeing building momentum from Optum Health. as the business re-centers back to its integrated, value-based care delivery model. This resulted in another quarter of improved care management and greater operating discipline. OptumRx continues to perform to plan as transparency initiatives we announced earlier this year resonate well in the marketplace. OptumInsight, also on plan, remains on a multi-year path of reinvestment and innovation. as we bring modern intelligent technologies and services to the areas of greatest need in the health system. We believe OptumInsight is exceptionally well positioned to help modernize and simplify the health system as it brings AI-enabled tools and services to market. Across the enterprise, we're focused on serving consumers and care providers in ways that are reliable, affordable, and transparent. That requires us to pay close attention to areas where the system isn't working well enough. Areas including care approvals, accuracy of information and speed of response, access and scheduling, digital services, care path navigation, and more. We are committed to making the health system work better for all stakeholders by simplifying processes, by being clearer, more consistent, and faster in the experience we offer and by redesigning and modernizing that experience altogether. AI technology is helping us move faster. We're using it to improve service interactions, reduce administrative burden and support better decision making. Always in service of improved experiences and outcomes for both patients and care providers. United Health Group has a long history of evolving to meet the needs of a constantly changing U.S. health system. That evolution today includes the tech forward view actively and appropriately embracing an AI paradigm for our businesses. A management team with skills and vision to help in building a more advanced health system and an ever evolving organizational structure and culture aligned to that system. Our operating structure today broadly reflects a set of highly regulated benefit businesses and a complimentary set of products and services for patients, care providers and customers. We will continue to look to build and evolve ahead of the health system itself. We're making solid early progress both in how we better approach those we serve and in our results. We have much more work ahead and need to continue to get better by focusing what matters most with solid management and execution disciplines aligned to our mission to better serve people and the health system itself. With that, I'll turn it over to Tim Knowles.

Thanks, Steve. The pricing, benefit design, and market actions we've taken over the past year have been central in supporting our second quarter results and improved full-year outlook. As you have seen, UnitedHealthcare's overall performance in the second quarter exceeded expectations, driven by better results in Medicare Advantage, while commercial benefits remain pressured. I'll start with medical costs. Through the first half of the year, we are seeing divergence within our portfolio. Medical cost trends in Medicare are still running well above historical levels, but below our expectations so far in 2026. A primary reason for trend being below our expectations in Medicare is our own initiatives, including benefit design, Care Management Models, and Network Curation. Other factors have an influence as well, including prior year development, a more favorable respiratory season, and weather patterns. We expect the 2026 Medicare medical cost trend to come in below our initial estimate of around 10%. Commercial costs are stubbornly high, rising above expectations, which we believe is consistent with what is being experienced across the sector. Turning to the overall performance of our individual benefit offerings, Medicare delivered a strong second quarter. Membership retention was better than previously anticipated. We now expect full-year Medicare Advantage enrollment to decline by approximately 1.1 million and Medicare margins to finish 2026 above 3%. Looking to our 2027 bids, our benefit planning remains disciplined and grounded in the current trend environment. We will continue to support program and margin stability through actions including benefit adjustments and selective changes in market participation. In Medicaid, overall performance during the quarter, including cost trend, was broadly in line with expectations. We are beginning to see early signs of improvement from initiatives including those targeting elevated behavioral health cost trends, but we expect Medicaid margins to remain pressured for 2026. Our focus is on closing the gap between lagging reimbursement rates and underlying medical cost trends while continuing to partner closely with states to support the long-term sustainability of Medicaid benefits and support them in identifying and reducing fraud, waste, and abuse. Within our commercial offerings, as I noted, we are not yet seeing evidence of cost trend moderation. In fact, it is the opposite. with medical cost trends modestly above 11% level we previously saw. The primary drivers of pressure from the independent resolution process under the No Surprises Act, which applies only to commercial plans, and more aggressive billing practices among providers, especially higher service and coding intensity and higher cost per encounter that result from the more fee-for-service orientation of commercial plans. At this distance, commercial margin recovery will remain a focus area longer than originally anticipated. Returning to UnitedHealthcare as a whole, we are confident in being able to deliver meaningful earnings growth in 2026 and into 2027 with the reinvestments we are making in the business to build a stronger, more durable foundation for 2027 and beyond. Of equal, if not more importance, We remain intent on modernizing essential healthcare experiences to improve how consumers and care providers experience the health system. For example, in the quarter we committed to eliminating by the end of this year 30% of prior authorization volume and nearly two-thirds of prior authorization requirements for pediatric care. We continue to take concrete steps to reduce complexity and increase speed by further simplifying prior authorization. Increasing consumer responsive digital experiences, providing greater support to rural hospitals and care providers, offering more consumer centered product innovation and much more. AI is both an enabler and accelerant to this effort. We're early in this work, but clearly on the path to improve the healthcare experience and strengthen relationships with our stakeholders. starting with consumers and care providers. And we're confident these efforts will bolster UnitedHealthcare's long-term performance and market position. And now let me hand it to Patrick Conway.