Wall Street is speaking loudly to Medicare Advantage insurers: If you want us to stick with you, keep dumping seniors who are pinching your profit margins.
Investors continue to punish UnitedHealth Group since the company downgraded its 2025 profit expectations on April 17. On Friday, UnitedHealth’s stock price hit not only a 52-week low—$393.11—but its lowest point in years. The last time UnitedHealth’s stock price went below $400 a share was on October 14, 2021.
The company’s shares lost nearly 4.5% of their value during the past week, contributing to a decline that started soon after the company set an all-time high of $630.73 last November. UnitedHealth’s shares have lost more than 33% of their value since then.
Meanwhile, investors have once again embraced UnitedHealth’s top two rivals in the Medicare Advantage business–Humana and CVS/Aetna. Those companies told investors last year, when both were in the Wall Street dog house for spending more than investors expected on patients’ medical care, that they would dump hundreds of thousands of their costliest Medicare Advantage enrollees to improve their profits. They made good on that promise, shedding almost 650,000 seniors and people with disabilities by the end of the year.
Many of those people enrolled in a UnitedHealth Medicare Advantage plan. The company reported 400,000 more Medicare Advantage enrollees in the first quarter of 2025 than in the fourth quarter of 2024. That used to be a good thing, but UnitedHealth’s executives told investors on April 17 that it wouldn’t make as much money for them as the company had assured them just three months earlier because it likely will have to spend more than they expected on those new MA enrollees’ medical care. Investors responded by immediately dispatching the company’s shares to the cellar. Those shares lost about 23% of their value in a single day.
The Street had also punished Humana and CVS last year when they said they were paying more for seniors’ medical care than they’d expected. Shares of both companies cratered, losing around half their value. So, executives at both Humana and CVS started identifying Medicare markets to get out of entirely. The culling was ruthless. CVS shed 227,000 MA enrollees. Humana got rid of 419,000.
Those seniors and disabled people had to scramble to find a new Medicare Advantage insurer because it is difficult for most people to go back to traditional Medicare and find an affordable Medicare supplement policy. Medicare supplement insurers must waive underwriting during the first six months of applicants’ eligibility for Medicare, but people who enroll in a Medicare Advantage plan and want or need to make a change months later find out that insurers will charge them more unless their health is nearly perfect.
Of the seven big for-profit health insurers, four (Cigna, CVS/Aetna, Humana and Centene) collectively cut 1.3 million of their Medicare Advantage enrollees adrift at the end of 2024 in an effort to stay in Wall Street’s good graces. Cigna dumped all 600,000 of its MA enrollees, selling them to the Blue Cross corporation HCSC. For-profit Blue Cross insurer Elevance picked up 227,000; Molina added 18,000, and, as noted, UnitedHealth signed up 400,000 new MA enrollees.
While UnitedHealth’s shares have lost a third of their value, CVS’s shares have increased more than 50% since the first of this year. They even set a 52-week high of $72.51 on Thursday. Humana’s shares closed Friday at $258.48, up 1.88% since January 1. They are out of the Wall Street dog house – for now, anyway.
I trust you are not feeling sorry for UnitedHealth because of its misfortune on Wall Street. It is still a hugely profitable company–just not profitable enough lately to please investors. This huge corporation, the fourth largest in America, reported $9.1 billion in profits in just the first quarter of this year. If the company makes it more difficult for its health plan enrollees to get the care they need this year, it could make even more than the $34.4 billion in profits it made last year.
And as a group, the seven big for-profits, including those that spent more than Wall Street felt was necessary on patients’ medical care, made $70 billion in profits last year. (UnitedHealth made nearly as much as the other six combined.)
And collectively, those giant corporations took in a record $1.5 trillion in revenue from us as customers and taxpayers last year. They are doing quite well. But that won’t stop them from trying to keep lawmakers and Trump administration officials from cracking down this year on the widespread waste, fraud and abuse in the Medicare Advantage program. You can expect them to spend a record amount of our money on lobbying expenses in Washington this year to keep their Medicare Advantage cash cow well fed.
[N.B. This story was originally posted in Wendell Potter’s Substack, Health Care un-covered.]
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