When it rains, it pours. But when your business is being sued for losing sensitive medical data, regulators are investigating the legitimacy of your billing practices, and you post your first disappointing earnings in over a decade — it’s more like a full-blown healthcare hurricane. UnitedHealth GroupUNH

, the private insurer thrust into the spotlight after an executive was shot and killed in New York City, is caught in the storm.

Not so United: After a string of high-profile PR disasters, CEO Andrew Witty pledged to “make the health system work better for all.” Five months later, he’s stepping down, citing “personal reasons.” That wasn’t the only surprise. On Tuesday, after its first earnings miss since 2008, UnitedHealth withdrew its 2025 guidance, blaming higher medical spending. The Dow’s third-largest component plunged over 17%, bringing its YTD loss to 38%.

• The firm faulted accelerating care activity and higher medical costs from its privately run Medicare Advantage plans; it expects growth to resume in 2026.
• Executive Chairman Stephen Hemsley — who was previously the CEO of UHC from 2006-2017 — will return as CEO to steer through “challenging times.”

Medicare Disadvantage

UnitedHealth’s Medicare issues are by no means isolated. Across the insurance space, once-profitable Medicare Advantage (MA) plans are becoming a burden as Americans catch up on medical procedures delayed by COVID. Competitors slid alongside UnitedHealth on the news:

• HumanaHUM
  , Aetna parent CVS HealthCVS
  , and Anthem parent Elevance HealthELV
  fell 9.5%, 6.7%, and 9.9%, respectively — CignaCI
  managed to hold losses to 4.4%.
• Together, these players manage 54% of Medicare plans — and many are slimming their offerings this year and next to achieve greater cost management.

Retreat from public services: That pullback from offering Medicare plans could help bolster their stocks, largely at the expense of seniors, who are driving that spending and could be forced to find new providers. Humana and CVS said they could dump 10% of their MA members this year — CenteneCNC

has already churned more than 10%. And the problem doesn’t just stop at Medicare: Aetna recently announced plans to exit the Affordable Care Act marketplace after disappointing results from its exchange plans. It seems the cracks in healthcare’s public-private partnerships are starting to show.