UnitedHealth Group (UNH) is facing the kind of perfect storm that even the most resilient blue chips struggle to survive. In just a few months, the healthcare giant has been rocked by the assassination of one of its top executives, a massive cyberattack, a leadership shakeup, policy threats from the White House, and now, perhaps most damaging, a criminal Medicare fraud investigation by the U.S. Department of Justice. The result? A stunning collapse in its stock price from $599 in mid-April to under $308 this week, with the stock dropping to $292 in pre-market trading (as of writing).
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A Bombshell from the DOJ
The latest blow landed on May 14, when news broke that the Justice Department is actively investigating UnitedHealth’s Medicare Advantage billing practices. According to The Wall Street Journal, the probe is being led by the DOJ’s healthcare fraud unit and could carry serious criminal implications. Investigators are examining whether UnitedHealth exaggerated patient diagnoses to secure higher Medicare payments—a tactic that could amount to fraud.
The company, for its part, says it hasn’t been notified of any criminal charges and defends the integrity of its Medicare Advantage program. But investors are understandably rattled.
Trouble has been building for weeks. Back in February, UnitedHealthcare CEO Brian Thompson was shot and killed in New York—a tragedy that left the company and industry reeling. Then came a damaging cyberattack that disrupted payments across U.S. healthcare providers. Soon after, CEO Andrew Witty stepped down and was replaced by former chief Stephen Hemsley. Last week, the company suspended its 2025 financial guidance, citing surging medical costs.
And then came May 12.
That day, President Trump signed an executive order aimed at eliminating pharmacy benefit managers (PBMs) from drug pricing negotiations—a direct threat to UnitedHealth’s OptumRx unit. The stock tanked 12% in a single session.
What It All Means for Investors
This isn’t just a bad news cycle—it’s a full-scale crisis. The criminal probe and mounting antitrust scrutiny raise serious questions about UnitedHealth’s business model. The company’s vertical integration—owning both the insurer (UnitedHealthcare) and a massive care provider network (Optum)—is under the DOJ microscope. The financial impact could be enormous if regulators decide this structure distorts competition or violates billing rules.
Some investors might see an opportunity at half its former value. However, the risks have multiplied fast: no forward guidance, an expanding list of investigations, and heightened political and regulatory pressure on Medicare Advantage.
Is UNH a Good Stock to Buy Right Now?
The short answer is no! As of now, UnitedHealth sports a Strong Buy rating, but this is bound to change, so investors should follow analysts’ positions in the coming days. The average UNH stock price target is $540.68, implying a 75.54% upside.
