UnitedHealth Group (UNH) shares plunged 12.06% in intraday trading on Tuesday, as the healthcare giant announced a surprise leadership change and suspended its 2025 financial outlook due to escalating medical costs.
In a shocking turn of events, UnitedHealth revealed that CEO Andrew Witty has stepped down for personal reasons, effective immediately. Stephen J. Hemsley, who previously served as CEO from 2006 to 2017, has been appointed to retake the helm. This abrupt leadership transition comes at a critical time for the company as it grapples with mounting financial pressures.
The company also dropped a bombshell by suspending its 2025 financial guidance, citing higher-than-anticipated medical expenditures. UnitedHealth stated that "care activity continued to accelerate while also broadening to more types of benefit offerings than seen in the first quarter." Furthermore, the medical costs of many Medicare Advantage beneficiaries new to UnitedHealthcare remained higher than expected, compounding the company's financial challenges. Despite these setbacks, UnitedHealth expressed optimism about returning to growth in 2026, though investors seemed skeptical given the day's sharp stock decline.

