From MarketWatch, May 13:
UnitedHealth’s stock sinks after CEO steps down, outlook suspended as costs rise
UnitedHealth sees care activity accelerate and Medicare Advantage costs remain higher than expected
Shares of UnitedHealth Group Inc. were sinking toward a four-year low in early Tuesday trading, after the health insurer said its chief executive was leaving, but also pulled its financial outlook as medical costs continued to rise more than expected.
The withdrawal of the 2025 outlook comes less than a month after the company slashed its outlook, saying costs rose as Medicare Advantage care activity had increased at twice the expected rate. That sent the stock tumbling to its biggest one-day loss since 1998.
In Tuesday’s premarket, the stock UNH dropped 9.6% toward a sixth straight loss, which put it on track to open at the lowest price seen since March 2021.
The stock’s implied price decline would shave more than 220 points off the Dow Jones Industrial Average, while Dow futures were recently down 222 points.
“The company suspended its 2025 outlook as care activity continued to accelerate while also broadening to more types of benefit offerings than seen in the first quarter, and the medical costs of many Medicare Advantage beneficiaries new to UnitedHealthcare remained higher than expected,” the company said in a statement.
Mizuho analyst Ann Hynes wrote in a note to clients that the CEO change wasn’t surprising, given the recent challenges the company has faced, but the suspension of guidance was surprising.
Last month, the company indicated that a lot more seniors sought treatment than expected. It had also seen changes in its Medicare business, which added new patients who had been under plans that were exited by other providers.
The pulled outlook shows that problem has gotten worse....
....MUCH MORE
Although this article points out the increase in demand among the Medicare crowd the employer-sponsored health insurance segment is also seeing a ruse in utilization of benefits.
In 2022 -23 you might have gotten away with saying people put off preventive care during the covid pandemic and were "catching up" but now we are over five years on from the start of that disaster.
On the other hand poor people weren't seeing the doctor as much, at least based on the experience of Medicaid managed care plans.
Something's up and I haven't seen a good explanation for what it might be.
