UnitedHealth Shares Crash on DOJ Medicare Fraud Probe Report
Minneapolis, Might 17, 2025 – UnitedHealth Group (UNH), the nation’s largest well being insurer, noticed its inventory worth plummet following a Wall Avenue Journal report on Might 14, 2025, that the U.S. Division of Justice (DOJ) is conducting a legal investigation into its Medicare Benefit enterprise for potential fraud. The inventory, buying and selling at $291.91 as of Might 16, 2025, has misplaced practically 49% of its worth this 12 months, erasing over $300 billion in market capitalization from its peak of $600 billion in November 2024, in accordance with Mizuho health-care fairness strategist Jared Holz.
The DOJ’s healthcare-fraud unit is main the probe, energetic since no less than final summer season, specializing in UnitedHealth’s Medicare Benefit practices, although particular legal allegations stay unclear, the Journal reported, citing unnamed sources. UnitedHealth, which generated $139 billion in income from its Medicare and retirement section in 2024, denied being notified of the investigation, calling the report “deeply irresponsible” and defending the integrity of its Medicare Benefit program. The corporate’s shares fell 14.7% to $262 on Thursday, hitting a five-year low of $248.92, and continued to slip, closing at $291.91 on Might 16 after a unstable day with a excessive of $294.49 and a low of $269.135.
This investigation marks the second federal scrutiny of UnitedHealth’s Medicare Benefit practices in 2025, following a civil fraud probe reported in February that examined whether or not the corporate inflated affected person diagnoses to safe larger Medicare funds. The information compounds a tumultuous interval for UnitedHealth, together with the abrupt resignation of CEO Andrew Witty on Might 13, 2025, for “private causes,” with former CEO Stephen Hemsley returning to guide the corporate. The agency additionally suspended its 2025 monetary outlook as a result of unexpectedly excessive medical prices, triggering an 18% inventory drop on Tuesday.
The corporate confronted extra challenges in 2024, together with a large cyberattack on its Change Healthcare subsidiary, disrupting funds to suppliers, and the high-profile homicide of UnitedHealthcare CEO Brian Thompson in December, which sparked public outrage over insurance coverage practices. Posts on X mirror investor alarm, with @MarioNawfal noting the inventory’s “meltdown” and @KobeissiLetter questioning if insider data preceded the plunge, as shares fell 9% from Monday’s excessive earlier than the DOJ report.
Analysts are divided on the inventory’s outlook. Whereas Morgan Stanley’s Erin Wright and UBS’s AJ Rice reward Hemsley’s return as a stabilizing transfer, others, like KeyBanc’s Matthew Gillmor, view the probe as an overblown concern unlikely to yield materials monetary penalties quickly. Nevertheless, the inventory’s 58% decline since mid-April and ongoing federal scrutiny, together with an antitrust probe and a lawsuit to dam UnitedHealth’s $3.3 billion acquisition of Amedisys, sign persistent challenges. With 82.8% of analysts sustaining a “Purchase” score and a 12-month worth goal of $438, some see the sell-off as an overreaction, although investor confidence stays shaken.
As UnitedHealth navigates this disaster, the DOJ’s investigation underscores broader issues about Medicare Benefit practices, with practically half of Medicare’s 65 million beneficiaries enrolled in such plans. The result of the probe may reshape the corporate’s operations and the healthcare business’s regulatory panorama.
Sources: Wall Avenue Journal, CNBC, Reuters, Forbes, UnitedHealth Group, X posts by @MarioNawfal, @KobeissiLetter
