đ¨ BREAKING: Medicare Advantage Carnage on Wall Street
UnitedHealth loses $62.4B, down 19.6%, in one day. Its 7th worst day in history.
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Looks like UnitedHealth is having more and more of those nightmare days. Itâs only been 9 months since its worst day since the 1998 Russian crisis, when it lost 22.4% in one day.
Remember, I suggested starting a GoFundMe campaign for Andrew Witty 9 months ago? Well, the poor guy left the company during that time, after the assassination of Brian Thompson and a steady stream of other bad news for United. Now itâs back to Stephen J. Hemsley, the companyâs chairman and actually a former CEO, who is even more corrupt than Witty was, in my opinion. How these guys trade UNH stock before big events, make tens of millions on inside information, and the SEC looks the other way, is beyond me.
But hey, after UNH losing 55% in a little over a year, even Hemsley is down to his last billion. How is he going to feed his family? Letâs fire up that GoFundMe. Who is with me? đ
Anyway, here is what happened. On Monday night, January 26, 2026, the Trump administrationâs CMS dropped a regulatory grenade by proposing essentially flat Medicare Advantage payments for 2027. The 0.09% net increase equates to just $700M across the entire MA program, a rounding error compared to the multi-billion-dollar 4% to 6% increases insurers had banked on. (Source: The Wall Street Journal.) This proposal targets insurersâ risk adjustment practices, specifically excluding diagnoses from âunlinked chart reviewsâ that CMS believes inflate risk scores.
For UnitedHealth, which controls approximately 30% of national MA enrollment, the news was devastating. As a result, UnitedHealth, together with other major Medicare Advantage players like Humana, CVS Health (Aetna), and Elevance Health, lost over $100B in a single day today. UNH alone lost $62.4B, or 19.6%.
UNH has lost $257B, or 55%, of its value in just over a year, since it reached its highest value of $575.41B on November 11, 2024. That was right before Luigi Mangione (allegedly) murdered Brian Thompson, the CEO of UnitedHealthcare, on December 4, 2024.
My view. UNH and Hemsley canât pin all this bad news on Luigi Mangione, CMS, Trump, or âmacroeconomic factors.â If anything, macroeconomic factors have been a tailwind. For example, the S&P 500 gained 18.1% over the same period, from 11/11/2024 to 1/27/2026.
No. UNH has become one of the largest oligopolies in the world by overcharging and defrauding customers, while controlling the entire healthcare vertical: health insurance, medical providers, PBMs, and pharmacies.
Itâs a good day to focus on the UnitedHealth fraud, as Iâve written about it extensively.
And yes, there have been multiple fraud cases against UnitedHealth. Just the most recent ones:
An upcoding scheme using the fraudulent QuantaFlo device that netted UNH $1B in a single yearâfrom just one device, for just one diagnosis (PAD)!
The Change Healthcare cyberattack (UNH subsidiary) didnât hurt UNH. It did devastate providers. According to the American Medical Association (AMA), 80% of practices suffered revenue losses, 55% used personal funds to stay afloat, and many shut downâlater scooped up by Optum (another UNH subsidiary!) at fire-sale prices. How convenient.
UNH forced staff to follow Optumâs NaviHealth AI (ânH Predictâ) to deny Medicare patients post-acute rehab. UNH made billions. The settlement? $20.25M. Thatâs millionâwith an M. (Source: The Minnesota Star Tribune.)
Need perspective?
đľď¸ââď¸ FTX fraud: $8 billion. Sam Bankman-Fried got 25 years.
đľď¸ââď¸ Madoff: $65 billion. Life sentence.
đľď¸ââď¸ UnitedHealth: $50+ billion... and counting. Zero consequences â until today.
Just to give some color: not only does UnitedHealth have some of the most powerful lobbyists in the world, but theyâve also apparently operated above the law.
UNHâs corporate defense lawyers have adopted a legal strategy so aggressive that even the mob never dared to try itâwhen facing litigation from the government, they turn around and file misconduct charges against the attorneys bringing the charges.
(Source: BIG newsletter, by Matt Stoller.)
In November 2023, the SEC looked the other way as UnitedHealthâs chairman Stephen Hemsley and other top execs sold $101.5M in stockâright before a U.S. antitrust probe into the company became public. (Sources: Bloomberg, BIG newsletter, by Matt Stoller.)
The reason why Andrew Witty and Stephen Hemsley think theyâre above the law and therefore can commit insider trading all day long, is because he has seen the worst case scenario play out in front of him: in 2007, the SEC (not the DOJ - so no jail time already) went after then-CEO of UnitedHealth, William W. McGuire, accusing him - you guessed it - of insider trading. To the SEC's credit, they went hard after him, but the case was still settled for a whopping $1B (with all the penalties and returned stock options), without admitting any guilt, of course. So yes, it was a tough day for Mr. McGuire, as roughly half of his wealth was wiped out, but, unlike those much less affluent defendants in similar cases, he doesnât have a criminal record, can work anywhere, and his lifestyle didnât suffer a bit. In fact, a few years later he bought a professional soccer team, Minnesota United FC. I donât think people realize how crazy rich these executives have become from their companies' paychecks, mainly due to equity-based compensation.
Blaming increased Medicare costs for running your business poorly is like shouting at puppets when you're the one holding all the strings. Yet thatâs precisely what UnitedHealth has been doing lately.
Iâve been advocating for breaking up UnitedHealth for years. Biden didnât do it. Trump didnât do it. But maybe market forces will.
UnitedHealth is (was đ) so big, there is no more room for the insurance business to grow any further, so it had to open other businesses: UnitedHealthcare, Optum Health, Optum Insight, Optum Rx, Optum Ventures and Optum Financial (including Optum Bank). In fact, the non-insurance business now comprises over 1/3 of the company revenue. However, despite the diverse business distribution, the UnitedHealth motto stays strong and consistent across its businesses: âWeâre so big, we donât give a shit about our customers. What are you gonna do about it?â
I wholeheartedly agree with Dr. Jeffrey Pfeffer:
UnitedHealth Group shouldnât even exist, as itâs merely an intermediary between payers and providers, adding no real value.
By the way, after todayâs Medicare Advantage carnage, what do you think Unitedâs next move will be regarding reimbursement rates? Brace yourselfâprovider carnage incoming.
Itâs astonishing how Witty, Hemsley, and UNH have brought American healthcare to its knees. They brazenly dismiss every single fraud lawsuit, settling each for trivial amounts.
Just this September, Semler, UnitedHealthâs medical upcoding device dealer, settled with the DOJ for a mere $30M(!), despite UNH (allegedly) pulling in about $1B from this device in a single year and (allegedly) causing serious harm countless patients by driving false-positive PAD tests at roughly 8(!) times the normal rate.
The level of corruption and indifference at UnitedHealth is unfathomable.
Is anyone still interested in starting a GoFundMe campaign for Stephen J. Hemsley? đ
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đđđđđ Hi! My name is Sergei Polevikov. Iâm an AI researcher and a healthcare AI startup founder. In my newsletter âAI Health Uncut,â I combine my knowledge of AI models with my unique skills in analyzing the financial health of digital health companies. Why âUncutâ? Because I never sugarcoat or filter the hard truth. I donât play games, I donât work for anyone, and therefore, with your support, I produce the most original, the most unbiased, the most unapologetic research in AI, innovation, and healthcare. Thank you for your support of my work. Youâre part of a vibrant community of healthcare AI enthusiasts! Your engagement matters. đđđđđ
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Fortunately, I don't own any shares in that dog