UnitedHealth Group (UNH), the largest healthcare company in the U.S. by revenue, plunged into deeper turmoil Tuesday.
The sell-off was triggered by the announcement of the abrupt resignation of CEO Andrew Witty and the withdrawal of its 2025 earnings forecast. Witty, who had led the company since 2021, is stepping down for unspecified “personal reasons,” according to a company statement. The move comes less than a month after UnitedHealth slashed its profit outlook amid soaring medical costs.
Stephen Hemsley, who previously served as CEO from 2006 to 2017 and has remained chairman, will return to lead the company during the crisis. UnitedHealth shares tumbled 16.4% on the news, compounding a historic selloff that began in April when the company reported underwhelming quarterly results. In pre-market trading, shares had already dropped over 10%, signaling investors’ growing unease.
The reversal in leadership at the $400 billion behemoth underscores broader investor concerns about its core Medicare Advantage business, where surging demand and rising costs have overwhelmed forecasts. The decision to pull guidance entirely—weeks after revising it down—has added to the sense that executives have lost control of a complex business they once dominated with confidence.
Deepening Financial Woes: From Caution to Crisis
UnitedHealth had already stunned Wall Street in mid-April when it cut its full-year guidance by nearly 10%, citing an unexpected spike in care utilization, particularly among seniors enrolled in Medicare Advantage plans. But Tuesday’s decision to withdraw all forward-looking financial guidance for 2025 sent a deeper signal: the worst may not yet be over.
Analysts had projected earnings of $26.21 per share. UnitedHealth’s revised forecast—before it was scrapped—had dropped to as low as $24.65, down from $30 earlier in the year. The company now says it expects to “return to growth in 2026,” but provided no specific figures, leaving investors adrift.
The numbers paint a bleak picture. Shares are down 36.7% year-to-date and nearly 49% below their November 2024 high of $625.25. The company has lost over $230 billion in market value since then. Though revenue climbed 10% year-over-year in the first quarter, the profit margin collapsed due to rising medical care costs. UnitedHealth’s once-formidable medical loss ratio has deteriorated, meaning more premium dollars are being spent directly on claims.
Worryingly, the company’s own CFO now says there are signs of elevated utilization expanding beyond Medicare Advantage into other insurance segments. That raises the possibility that UnitedHealth’s problems are not confined to one business line, but may indicate a systemic issue across its sprawling portfolio.
Reputation Under Fire Amid Corporate and Public Backlash
Beyond the numbers, UnitedHealth is facing a reputational crisis. Witty’s departure caps a tumultuous period marked by the shocking murder of Brian Thompson, the head of the company’s insurance division, last December. His killer, allegedly enraged by claim denials, reportedly engraved bullet casings with words like “deny,” “defend,” and “depose”—terms often associated with insurance disputes. The public’s reaction was starkly unsympathetic, further exposing long-simmering resentment toward the insurer.
Witty’s three-year tenure as CEO was marred by operational missteps, intensifying public scrutiny, and underperformance. Under his leadership, UNH shares returned just 21.3%—far behind the S&P 500’s 63.3% over the same period. His exit may not have surprised insiders, but the timing and lack of succession planning has left investors unnerved.
Stephen Hemsley’s return may provide short-term stability, but he inherits a company in the throes of an identity and structural crisis. Under his earlier leadership, UnitedHealth aggressively expanded through acquisitions, building a vertically integrated model that today includes 50 million insured members, a massive physician network, and one of the largest pharmacy benefit managers in the U.S.
Yet that scale has become a double-edged sword. UnitedHealth’s reliance on Medicare Advantage profits has made it especially vulnerable to demographic and policy shifts. As healthcare costs rise, funding pressures increase, and scrutiny from regulators and the public intensifies, UnitedHealth faces existential questions about its ability to grow sustainably in a changing environment.
Whether the current meltdown signals deeper flaws in the business model—or a broader reckoning for the managed care industry—remains to be seen. But for now, investors appear unconvinced that even a seasoned hand like Hemsley can quickly right the ship.
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