Home health services are touted as cost-saving for payers, and industry stakeholders often advise providers to share data demonstrating these savings with payers and policymakers.
The cost-saving nature of home health may not always be evident, however. UnitedHealth Group (NYSE: UNH) reported that home health services have contributed to elevated medical cost trends when discussing Medicaid margins on the company’s third-quarter earnings call on Tuesday.
“As we think about 2026, we expect some margin degradation due to the continued dislocation of premium funding and what we’re seeing in terms of elevated medical cost trends, but we do see 2026 as the trough for that performance,” Mike Cotton, CEO for UnitedHealthcare’s Medicaid division, said on the call. “Our elevated trends are driven, as the industry has, by specialty pharmacy behavioral health and also as we look at home health services.”
The company anticipates that the One Big Beautiful Bill, which introduced drastic cuts to Medicaid’s budget, and collaboration with states will allow the company to return to improved margins, Cotton said.
UnitedHealth Optum recently expanded its home-based care offerings after closing its acquisition of Amedisys, following a lengthy battle with the U.S. Department of Justice. The acquisition offset the company’s debt-to-capital ratio, according to Chief Financial Officer Wayne DeVeydt.
“In the third quarter, our debt-to-capital ratio remained stable at 44.1%, reflecting continued actions to improve cash efficiency, offset by the completion of the Amedisys transaction late in the third quarter, which represented a net cash disbursement of $3.4 billion,” DeVeydt said. “We expect our debt-to-capital ratio to trend closer to 40% in the second half of 2026.”
The company has paused its strategic acquisitions, according to the call, while it focuses on achieving its desired debt-to-capital and interest coverage ratios.
UnitedHealth leaders also highlighted success with its Optum at Home service line. Patrick Conway, CEO of Optum, stated that 2026 CMS star rating projections show that 80% of Optum at Home members are in four-plus star plans.
Overall, the company reported Q3 revenue of $113.2 billion, up 12% year over year. UnitedHealthcare revenue totaled $87.1 billion, up 16% year over year.
UnitedHealth has experienced a slew of public struggles over the past year. Still, CEO Stephen Hemsley said on the earnings call that the company has identified its opportunities and inefficiencies and addressed underperformance issues with “fresh perspectives.”
