This Healthcare Giant Is Quietly Becoming an AI Powerhouse

After a very difficult 2025, UnitedHealth Group (NYSE: UNH) has rebounded sharply in 2026, and artificial intelligence (AI) is a contributing factor to its recovery.

Health insurance is an increasingly complex business that requires processing reams of data on benefits and claims, cost estimates, care and provider options, prescriptions, and wellness plans, among other things. And UnitedHealth is the largest U.S. health insurer by enrollment, with about 45 million members. It's also the largest Medicare Advantage provider in the U.S. -- it dominates Medicare Advantage coverage in 41% of the 3,200 counties in the U.S.

That extensive level of coverage means there's a lot of data to process. That suggests the health insurance industry is a great sector for AI.

Image source: Getty Images.

In March, UnitedHealth introduced a generative AI chatbot called Avery that coordinates the healthcare experience for members and learns from their interactions. Avery can explain benefits and claims status to members and deliver cost estimates for care. It can find providers, schedule appointments, and help with ID cards and drug benefits.

The chatbot is already live for 6.5 million members with UnitedHealthcare (the company's insurance unit) employer-sponsored plans, and another 160,000 members with UnitedHealthcare Medicare Advantage plans. The company says Avery will be expanded to serve more than 20 million members by the end of this year.

Avery is one of more than 1,000 AI applications in use across the company's insurance, health delivery, and pharmacy units. And that's just the start. The company says it will invest another $1.6 billion in AI this year. It's part of the company's ongoing effort to streamline care and reduce administrative waste.

Wall Street approves of the company's AI deployment

Investors seem to like UnitedHealth's ongoing adoption of AI tools. The stock is up about 53% since the company announced the Avery system in late March. Of course, the company's impressive first-quarter financial results also boosted the share price. On April 21, UnitedHealth posted revenue and earnings that beat Wall Street's expectations. It also increased earnings guidance for 2026 to $18.25 a share, up from $17.75.

Perhaps most important, and closely related to the company's adoption of AI tools, the company reported that it reduced its medical benefit ratio -- the portion of an insurance company's revenue that is spent on healthcare costs -- to 83.9%, which is down from 84.8% a year ago and well below the 85.5% expected by industry analysts.

And UnitedHealth got more good news in early April when the Trump administration announced it would increase Medicare Advantage payments by 2.48%, or about $13 billion, in 2027. That increase is significantly higher than the government's initial estimate of 0.09%.

It's quite a change of fortune from the previous two years. In December 2024, the company lost its CEO, Brian Thompson, after he was killed in New York City. in 2025, UnitedHealth found itself as the target of Justice Department civil and criminal investigations over its billing practices. That investigation remains in effect. The stock plummeted 60% from early April to late July 2025 on the news.

The last two months, however, have seen a strong rebound in UnitedHealth's share price. If the company can continue to employ AI to make its enormous health insurance business more efficient and profitable, there should be more upside in the coming months.

Matthew Benjamin has no position in any of the stocks mentioned. The Motley Fool recommends UnitedHealth Group. The Motley Fool has a disclosure policy.