From CNBC: 2025-04-17 14:16:00

UnitedHealth Group stock plummeted 20% after slashing its annual profit forecast due to higher medical costs in its Medicare plans. Competitors like Humana, Elevance Health, and CVS also saw declines. Rising medical costs have impacted the industry, with analysts warning of potential repercussions for other insurers.

UnitedHealth’s first-quarter results revealed concerning signs of accelerating medical costs in Medicare Advantage businesses, prompting doubts about full-year outlooks for insurers. Higher costs have plagued the industry as seniors return for delayed procedures post-pandemic. Barclays analyst Andrew Mok suggests companies exiting unprofitable markets may face less impact.

UnitedHealth’s unexpected rise in care utilization in its Medicare Advantage business significantly surpassed expectations. The surge, particularly in outpatient services, may lead to changes in managing utilization that could affect patient satisfaction. The company’s struggles may also be influenced by policy headwinds and ongoing government scrutiny.

UnitedHealth is facing a government investigation into its Medicare billing practices while dealing with issues related to patient profiles under its Optum health-care unit. The company is taking steps to address these challenges and improve results moving forward. Insurers can expect a boost next year with increased reimbursement rates for Medicare Advantage insurers.



Read more at CNBC: UnitedHealth’s guidance cut may mean trouble for more insurers