This week we are seeing what a tragic mistake we as a country made in turning our health care system over to corporations like UnitedHealth Group that live and die on Wall Street. And it’s only Wednesday.
I hope lawmakers are paying attention because we very well could be heading into an ongoing collapse of the health insurance industry’s market capitalization and the ability of insurance giants to keep the lights on without a taxpayer bailout. I am not crying wolf. Access to care for hundreds of millions of Americans is at stake.
Yesterday, UnitedHealth reported fourth quarter 2025 earnings and alarmed investors, not just about past performance but about the company’s 2026 revenue outlook. By the end of trading on the New York Stock Exchange, UnitedHealth’s share price had fallen an astonishing 20% to $282.70. The company’s news was so dismal, at least to investors, that it dragged the stock price of all six of its for-profit competitors down with it. It even pushed the Dow into negative territory on a day when both the S&P and Nasdaq were up.
In a single day, those seven giants lost as much as $100 billion in market capitalization. The trading volume was off the charts. Collectively, those companies saw more than 145 million of their shares traded, at least 10 times more as usual.
Today could be another very bad day for health insurers. Elevance, the conglomerate that owns Anthem Blue Cross plans in 14 states, became the second of those seven to announce 2025 earnings and outlook for this year. Like UnitedHealth, the company’s “guidance” – the revenue and profit expectations of the company’s leadership – for 2026 initially disappointed investors (Elevance also expects a decrease in both revenues and profits this year). Shares of Elevance and most of the other companies in the sector fell in pre-market trading, although Elevance and some of the others began to recover a bit after the market opened at 9:30.
It wasn’t just what UnitedHealth and Elevance reported that spooked investors this week. They were equally disappointed in a highly anticipated announcement by the Trump administration’s Center for Medicare & Medicaid Services. Around this time every January, CMS discloses how much it intends to increase payments to private insurers that sell Medicare Advantage plans. On Monday, minutes after the NYSE closed for the day, CMS sent shockwaves through the industry and investment community when it announced a proposed increase of just 0.09% for 2027, far below what industry executives and shareholders had expected. CMS also stunned industry executives – and even reform advocates like me – when it pledged to significantly increase efforts to prevent insurers from overbilling the government.
Why you should care
What we are seeing play out on Wall Street is a not-so-slow-motion train wreck that will make it even harder for Americans to get the care they need as these companies take actions to try to get back into investors’ good graces. And we can all expect to see these companies jack up premiums even more, putting coverage out of reach for more and more of us.
It wasn’t so long ago that these companies were Wall Street darlings. That began to change in late 2024 when insurers’ executives had to tell their shareholders that they were struggling to control health care costs. As they explained it, despite their best efforts to avoid paying claims, people enrolled in their health plans – especially in their Medicare Advantage plans – were nevertheless somehow getting more care than the corporate executives had expected. That and the fact that CMS actions initiated during the Biden administration to reduce overpayments to Medicare Advantage plans were going into effect.
The insurers’ executives had hoped the Trump administration would be more generous and less attentive to the rampant waste, fraud and abuse in the Medicare Advantage program. You can imagine how shocked those executives – and shareholders – were on Monday to learn that Trump’s CMS said it was going to be tougher and more tight-fisted than anyone expected. (You can be certain industry lobbyists will pull out all the stops to get Trump to backpeddle on the planned MA crackdown.)
The carnage on Wall Street started even before trading opened at the New York Stock Exchange yesterday morning. UnitedHealth posted its fourth quarter/full year 2025 earnings report around 6 a.m., a couple of hours before its executives held their quarterly investor call with Wall Street financial analysts. Investors, to put it mildly, were startled by the company’s lackluster fourth quarter performance and what CEO Stephen Hemsley and other executives had to say about the future. Total revenues, they predicted, likely would be lower in 2026 than in 2025, a first for this company.
Worst thing ever: Shrinkage
I can just imagine how stunned the company’s shareholders were to hear that. UnitedHealth became the world’s largest health care company by revenue after more than two decades of acquisitions and constant price increases. It seemed to be an unstoppable growth machine with a vertical integration strategy that would ensure constant revenue expansion. Revenue had increased so fast in recent years, in fact, that UnitedHealth leapfrogged up the Fortune 500 of American companies to the #3 spot. Only Walmart and Amazon took in more annual revenues than UnitedHealth. To hear that that growth not only was slowing but that the company was shrinking – yes, shrinking – sent shock waves across Wall Street and throughout the industry.
In Washington, meanwhile, Industry lobbyists had just assumed they could have their way with Trump and CMS Administrator Mehmet Oz, and also with members of Congress. Investors were shocked when it became clear insurers didn’t have nearly as much power in D.C. as they used to have, especially with Republicans. As we have been reporting for months now, there is growing bipartisan support in Congress as well as at CMS to reform the Medicare Advantage program and also to make many of insurers’ business practices unlawful. And a growing number of lawmakers on both sides of the political aisle are calling for the breakup of UnitedHealth and the other giants.
Poof
Hundreds of billions of dollars in market capitalization vanished into thin air yesterday after investors realized that UnitedHealth seemingly had become a lumbering, friendless giant with a business strategy and structure that has stopped working. UnitedHealth alone lost tens of billions in market cap as more than 65 million of its shares were traded – in a single day.
When a company experiences a decline in market cap, financing operations can be more difficult as it becomes more challenging to raise capital. And investors often find that a company with a shrinking market cap could reduce or end dividend payments.
Remember Enron
It is not inconceivable to think that one or more of these Goliaths will soon collapse and file for bankruptcy, which would lead to unimaginable chaos for the hundreds of millions of Americans who rely on those companies for access to health care.
What is happening to those behemoths now reminds me of what happened 25 years ago when Enron collapsed on Wall Street, shortly after an SEC investigation shed light on that company’s complex structure and partnerships and questionable accounting practices. In one day of trading in November 2001, Enron’s stock price, which was once over $90, fell to $1. Enron declared bankruptcy and quickly went out of existence. Twenty-two people were convicted for their actions related to fraud at Enron, and the company’s CEO, Jeffrey Skilling, would serve 12 years in prison.
Keep in mind that the U.S. Justice Department has ongoing civil and criminal investigations into UnitedHealth’s Medicare Advantage business, and possibly into other parts of the company’s operations. If those investigations lead to charges against the company and its executives, you can expect even more of the company’s shareholders to unload their shares.
Many already have, of course, and not just this week. Just a little more than 14 months ago, UnitedHealth’s stock price was at an all-time high of $630.73 a share. Since then the company’s stock has lost more than half of its value, and as a consequence, the company’s market cap is now less than half of what it was just months ago. That drop reflects a significant loss of investor confidence in the company and the health insurance sector overall. Executives have to be worried that this unprecedented decline in market cap could trigger further sell-offs by investors, which could lead to a potential downward spiral in stock value.
While some investors may think this is a good time to buy shares in Big Insurance companies, believing they’ve hit rock bottom, other investors will realize there are other companies that are more of a sure bet. Indeed there are many. Since November 11, 2024, when UnitedHealth’s shares reached $630.37, the value of those shares have fallen 55%. Meanwhile, the Dow has increased nearly 11%, the S&P more than 16% and the Nasdaq nearly 24%.
This is urgent, folks
I truly hope our lawmakers are paying attention because what is playing out at the New York Stock Exchange should provide all the motivation they need to begin planning for a post-Wall Street-run U.S. health care system.
In case anyone needs more convincing that our lawmakers – and our employers – need to approach this work with a sense of urgency, consider this:
The big insurers are shedding millions of their health plan enrollees both voluntarily and involuntarily. The biggest Medicare Advantage companies – UnitedHealth, Aetna (part of CVS Health) and Humana have all withdrawn from several communities that have become unprofitable for them. Executives at UnitedHealthcare, by far the biggest MA player, told investors yesterday its Medicare Advantage enrollment likely will decline by several million this year as it exits numerous markets it had been serving. The company previously told investors that its Obamacare enrollment is also shrinking and could dwindle by two-thirds by the end of this year.
Aetna decided last year to get out of the Obamacare business entirely this year after dumping more than half a million of its Medicare Advantage enrollees. Cigna decided to get out of the Medicare Advantage business entirely last year.
So, what does this mean for the millions of Americans who depend on these companies to provide coverage and access to care? A friend who, like me, is a former insurance company executive, put together this list. Read it and worry.
Health plans will triple down on claims friction – meaning more denials and other changes in medical policy.
They will look for creative ways to not insure sick people.
Medicare Advantage companies will boost their HMO offerings and make their PPO offerings less attractive (and more expensive).
Zero-premium MA plans are going to end.
Supplemental benefits are going to shrink substantially.
Across all plans, physicians with high-cost members will suddenly be out-of-network as insurers trim their provider panels.
Agent and broker commissions will continue to shrink as fewer MA plans will pay commissions on new or renewing members for broad network plans.
Providers who are already frustrated with existing frictions with MA plans will have more reason to drop those plans as the administrative and clinical friction increases beyond current high levels.
MA plans will leave certain high-cost markets altogether.
Insurers will shrink their drug formularies to discourage high-cost patients from continuing their enrollment.
Overall, patient access to providers and prescription drugs will become more difficult as both provider panels and formularies shrink.
This is our future, folks, because health insurance company executives worship on Wall Street. They will take these steps because they will have no choice. Their shareholders will demand it.
If these are not reasons enough for lawmakers to come together and act with a sense of urgency I don’t know what more incentive they will need. Let’s hope they don’t wait until one or more of these companies collapse and demand a bailout – at our expense.
Efforts to rein in Medicare Advantage waste are welcome, but they don’t solve the broader problem - the millions of Americans under 65 who still lack reliable, affordable care. What we need is universal healthcare.
As a patient advocate who helps people with insurance troubles (and complex medical navigation), I desperately hope so! 🙏🏼
As Mr Potter aptly put, the “Wall Street-run U.S. health care system” was NEVER sustainable. I hope a large number of American people will urge the Congress to act now (even if not yet Medicare for all)!