What's Wrong With UnitedHealth Stock?

Many stocks successful the healthcare assemblage are up powerfully successful 2026. But not wellness security elephantine UnitedHealth Group (NYSE: UNH). The banal is down astir 13% this year, acold underperforming some the S&P 500 healthcare assemblage (up 1.7% this year) and the broader S&P 500 (up 0.6%). What's going on?

Well, the institution announced fourth-quarter results connected Jan. 27, and investors were not impressed. UnitedHealth bushed Wall Street's anticipation connected net by a penny, which is not overly impressive. Worse, gross of $113.2 cardinal came successful nether the statement expert forecast of $113.8 billion, ne'er a bully sign.

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Even worse for the stock price, management's outlook for full-year 2026 gross was unexpectedly low. The institution said it expects gross of $439 billion, astir $15 cardinal little than Wall Street was expecting. If that comes to pass, it volition beryllium the company's archetypal yearly gross contraction successful much than 30 years.

The stock terms plummeted 20% that day.

But that's not all. On the precise aforesaid day, the Trump medication projected keeping national payments to Medicare Advantage plans fundamentally level -- with an summation successful outgo rates of little than 0.1% -- successful 2027, which is acold little of an summation than what analysts and insurers expected. Industry analysts expected that the Centers for Medicare & Medicaid Services, which sets the rate, would suggest an summation of betwixt 4% and 6% for the year.

Medicare Advantage, oregon privately tally wellness security plans contracted by Medicare, is captious to UnitedHealth's business. In fact, the institution is the largest supplier of Advantage plans successful the U.S., with a marketplace stock of 29%. At the extremity of 2025, the institution served astir 9.4 cardinal radical done these plans.

So erstwhile the national authorities limits maturation for Advantage plans, it has a immense antagonistic interaction connected Advantage program providers.

In fact, the full wellness security assemblage got deed by the quality connected Advantage payments. And it looks a batch similar a authorities effort to extremity definite billing practices by Advantage providers. It's somewhat surprising, arsenic Wall Street analysts expected the Trump medication to beryllium friendlier to wellness insurers. Instead, President Donald Trump has called the insurers "big, fat, rich," and seems to beryllium including them among companies that should complaint consumers less.