This call will also reference non-GAAP amount. A reconciliation of the non-GAAP to GAAP amount is available on the Financial Reports and SEC Filings section of the company's Investors page at www.unitedhealthgroup.com.Information presented on this call is contained in the earnings release we issued this morning and in our Form 8-K dated October 18, 2011, which may be accessed from the Investors page of the company's website. I would now like to turn the conference over to the President and Chief Executive Officer of UnitedHealth Group, Stephen Hemsley Stephen J. Hemsley Good morning, and thank you for joining us to review third quarter results. We will begin with some general third quarter highlights, and then turn to a more detailed review of UnitedHealthcare and Optum's progress and growth. As we conclude, we will offer our view of the overall economic and healthcare environment and our positioning as we head into 2012, which we will detail further at our November 29 Investor Conference, when we will review our 2012 performance outlook with you, as we did last year. UnitedHealth Group earned $1.17 per share in the third quarter. Our results show consistent growth and continued strong, broad-based execution across the enterprise. People are purchasing more of our offerings, and we are doing a strong job delivering ever-improving value and service to them. Deeper and more diverse relationships across many aspects of healthcare, consistent fundamental execution, practical innovation and our diversified offerings are increasingly important to driving top line growth. The pace of change in healthcare is accelerating, and people are looking for strong partners who can deliver comprehensive solutions to the challenges they face. Our consistent and strong third quarter financial performance was driven by organic growth, careful cost management and continued moderate trends in the level of care utilization, along with the benefits of our broader diversification of offerings to the market.
We have increased our 2011 earnings outlook to a range of $4.40 to $4.45 per share on revenues exceeding $101 billion. Let's review some of the details supporting these results. Third quarter revenues increased 7% to more than $25 billion, with revenues growing 6% at UnitedHealthcare and 22% for the Optum businesses. The third quarter operating margin of 8.2% was stronger than expected and generally in line with the level reported for the first half of 2011.The third quarter margin decreased year-over-year, primarily due to an increase in the medical care ratio, which was caused by premium rate obligations -- rebate obligations, $30 million less favorable reserve development and modestly higher medical utilization trends as compared to 2010. The operating cost ratio increased 40 basis points year-over-year to 15.4%, driven by the growing mix of service and fee revenues. This mix impact was partially offset by consistent productivity improvements across our businesses. UnitedHealthcare, for example, has improved its operating cost ratio on a year-over-year basis each quarter this year despite the significant cost for reform readiness and increasing regulatory compliance purposes. In total, third quarter net earnings of $1.17 per share improved from $1.14 per share in 2010 and were again supported by strong adjusted cash flows from operations of $2.6 billion. Now let's review how these results were driven across our complementary business platforms. UnitedHealthcare's strong growth performance has been distinctive in the market. We have increased enrollment in every major product category every quarter for more than a year. The number of people UnitedHealthcare serves with medical benefits has increased by more than 1.4 million so far this year, including 220,000 more people served in the third quarter. This is on top of adding nearly 1 million people in 2010. Third quarter 2011 growth was led by the Employer & individual business, which grew by 100,000 people, half in fee-based benefits and the other half in risk-based benefit products. This brought growth for Employer & Individual to nearly 1 million people over the past 9 months and 1.1 million people year-over-year.
UnitedHealthcare Community & State and the UnitedHealthcare Medicare & Retirement both had strong growth as well. These businesses increased by 120,000 people this quarter and 435,000 people in the past 9 months, plus another 300,000 people in stand-alone Part D plan so far this year.Medicare Advantage sales have been strong all year. We added another 30,000 seniors this quarter bringing the year-to-date net increase to 145,000. UnitedHealthcare's consistently the choice for the largest share of newly eligible beneficiaries who choose private Medicare plans. Our Medicaid business grew by 55,000 people in the quarter, bringing year-to-date growth to 165,000. Community & State was recently awarded new business in Texas and Louisiana for 2012, and we estimate will allow us to serve as many as 250,000 more people in those states. These awards illustrate the larger-scale Medicaid opportunity, as states continued the decade-long trend of moving the greater portion of our nation's Medicaid population into the benefits of coordinated care programs. Read the rest of this transcript for free on seekingalpha.com