UnitedHealth in Crisis: Stock Collapse, DOJ Probe, and Leadership Shake-Up Rock Dow Titan

KEY POINTS

• UnitedHealth shares have plunged more than 50% in one month, dragging down the Dow.
• CEO Andrew Witty stepped down Tuesday; former CEO Stephen Hemsley returns amid rising medical costs.
• The DOJ is reportedly investigating potential Medicare Advantage fraud; UnitedHealth denies knowledge of probe.
• Legal exposure could reach billions, say analysts, echoing past fraud settlements.
• Wider healthcare system faces growing scrutiny amid cost, trust, and regulatory pressures.

NEW YORK – May 16, 2025 | Virginia Times

UnitedHealth Group (NYSE: UNH), once the most valuable stock in the Dow Jones Industrial Average, is now at the center of a financial and legal firestorm. In just one month, the Minneapolis-based healthcare giant has seen its stock price collapse by over 50%, triggered by leadership upheaval, rising medical expenses, and reports of a federal criminal probe into its Medicare Advantage practices.

Leadership Change and Suspended Guidance

On Tuesday, UnitedHealth announced that CEO Andrew Witty would step down immediately for personal reasons. He will be replaced by former CEO Stephen J. Hemsley, who previously led the company from 2006 to 2017 and has remained board chairman.

The company also suspended its 2025 earnings guidance, citing higher-than-expected medical costs, particularly among Medicare Advantage enrollees. UnitedHealth attributed the expense surge to greater-than-projected care utilization, especially among new beneficiaries.

DOJ Probe and Investor Fallout

The crisis intensified Wednesday night after The Wall Street Journal reported that the U.S. Department of Justice is investigating UnitedHealth for potential criminal Medicare fraud. The probe reportedly centers on billing practices within its massive Medicare Advantage business, a $450 billion federal program.

UnitedHealth denied receiving any DOJ notification and labeled the report “deeply irresponsible.” Nevertheless, shares fell another 11% on Thursday, bringing the monthly loss to over 50%—even as the Dow rose 5% and the S&P 500 and Nasdaq surged more than 10% and 14%, respectively.

Systemic Pressure Beyond the Dow

Though UnitedHealth’s collapse has ironically lightened its drag on the price-weighted Dow, analysts say the company’s troubles reflect deeper systemic stress in U.S. healthcare. Regulators have intensified scrutiny over Medicare Advantage billing, while patients and watchdog groups have grown increasingly vocal about denied claims and high premiums.

The December 2024 killing of UnitedHealthcare CEO Brian Thompson in New York by a reportedly disgruntled patient amplified public scrutiny of the healthcare industry and underscored the emotional weight of ongoing failures in the system.

What’s Next for UnitedHealth?

With investor trust eroding and legal risks mounting, Stephen Hemsley faces his most complex leadership test to date. Analysts say his top priorities will include:

• Stabilizing operations and restoring investor confidence
• Navigating potential legal exposure from the DOJ investigation
• Rebuilding credibility with patients and regulators

For now, Wall Street sees UnitedHealth’s crisis as self-inflicted—but far from isolated in a sector under growing financial and political strain.

Reporting by Virginia Times staff.