UnitedHealth (UNH) Faces Sell Call Amid Margin Squeeze, Regulatory Risks
UnitedHealth (UNH, Financials) shares gained 1% Monday after newly reinstated CEO Steve Hemsley apologized for the company's first earnings miss since 2008 and vowed to restore shareholder trust at the annual meeting.
Warning! GuruFocus has detected 4 Warning Sign with UNH.
Hemsley replaced Andrew Witty last month amid fallout from the earnings shortfall and the suspension of full-year guidance due to soaring medical costs in the Medicare Advantage segment. The company also faces pressure from federal investigations and regulatory scrutiny over billing and drug pricing practices.
We are well aware we have not fulfilled your expectations or our own, Hemsley told shareholders. We apologize for that performance, and we're humbly determined to earn back your trust and your confidence.
Hemsley previously served as CEO from 2006 to 2013. Shareholders approved his new three-year pay package, which includes equity awards valued at $60 million. Proxy firms were split on the vote, with ISS opposing and Glass Lewis supporting the plan.
UnitedHealth is reviewing operations across all units, including Optum Rx and UnitedHealthcare. The U.S. Department of Justice is reportedly examining billing practices tied to its integrated Medicare Advantage services, though the company says it has not received a criminal notification.
The company's private insurance and 2026 Medicare Advantage plans will be adjusted to account for higher care costs, Hemsley said.
The CEO transition follows the December killing of UnitedHealthcare CEO Brian Thompson in New York, which added further disruption to the company's leadership stability.
Investors are now watching for updates on regulatory probes, Medicare audits, and Q2 cost trends that could shape UnitedHealth's revised guidance trajectory.
This article first appeared on GuruFocus.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
an hour ago
- Yahoo
Health Insurance Not Covering Enough? 5 Reasons To Consider Secondary Insurance
Having insurance doesn't always mean being fully covered, with many Americans still facing big bills for basic care, let alone anything unexpected. According to KFF, annual premiums for employer-sponsored family health coverage hit $25,572 in 2024, with workers paying an average of $6,296 out of pocket. The average deductible for single coverage now stands at $1,787 — money that has to come out of pocket before insurance kicks in. Read More: Check Out: GOBankingRates spoke with two experts about when secondary insurance might be needed and what to know before making a move. Basic policies rarely handle everything. Many treatments, specialists or medications simply aren't included in standard plans. Kris Barber, founder and principal attorney at The Barber Law Firm, explained that secondary insurance can help with expenses 'like vision care, dental treatment, co-payments or even deductibles.' Explore More: High deductibles and frequent co-payments can strain even those with good coverage. When costs start stacking up, secondary insurance 'can relieve your burden considerably' by helping cover what primary leaves behind, according to Barber. Frequent appointments, therapies or medications, especially for chronic conditions, can burn through coverage fast. Patients with recurring care needs may often benefit from secondary plans that fill in those regular, costly gaps. For Medicare beneficiaries, Original Medicare doesn't cover everything. Eligible senior patients can 'consider Medigap policies to enhance coverage for expenses not included in Original Medicare — coinsurance and deductibles,' according to Barber. Secondary coverage doesn't have to be complicated to get. According to Melanie Musson from it's often available through a spouse's employer, via the Affordable Care Act marketplace or even as a separate policy for those on a parent's plan. Private insurance firms and government programs also offer supplemental plans for those who qualify. Sometimes a separate insurance policy isn't the best tool. If secondary insurance isn't an obvious need, a flexible spending account (FSA) or health savings account (HSA) might be the better move. Musson explained it's a good option because 'instead of paying premiums, you can put your money in an account where it grows.' HSAs, for those with high-deductible health plans, offer rollover benefits, investment growth and portability. FSAs, while less flexible, still provide tax advantages for near-term medical expenses. Both options may be better suited for covering moderate, expected out-of-pocket costs, without committing to ongoing premiums. Not every situation calls for secondary insurance, so weighing the cost of premiums and deductibles against the expected benefits is a good place to start. If the numbers line up, coverage can make a real difference. If not, a tax-advantaged account might offer more freedom and financial control. More From GOBankingRates 8 Common Mistakes Retirees Make With Their Social Security Checks This article originally appeared on Health Insurance Not Covering Enough? 5 Reasons To Consider Secondary Insurance Sign in to access your portfolio
Yahoo
2 hours ago
- Yahoo
Nvidia Retains Top Pick as AI Momentum Grows
Nvidia (NASDAQ:NVDA) remains a top sector pick after Bank of America's Vivek Arya returned from investor events in San Francisco with very positive feedback on AI demand, reaffirming his Buy rating and maintaining a $180 price target. Arya noted that Nvidia's Blackwell rack-scale systems now account for about 70% of compute sales, with Blackwell Ultra production slated to begin in Q2 alongside Rubin and Feynman on track, underscoring seamless generational transitions and limited ramp costs. Warning! GuruFocus has detected 4 Warning Signs with NVDA. He highlighted that the recent lifting of AI Diffusion export rules opens a sovereign AI growth vectorsovereign governments and CSPs are expected to build their own foundational models, expanding Nvidia's addressable market beyond hyperscalers. Addressing China-related risks, Arya emphasized that Nvidia considers its China AI exposure fully de-risked after H20 export restrictions, meaning any future sales into the $50 billion China AI TAM would be incremental upside, as current data center forecasts exclude China revenues. Management's guidance around Blackwell execution and the de-risked China outlook alleviates investor concerns that had restrained the stock over the past year. With the GB200 NVL systems fully ramping and strong cloud and enterprise interest, Nvidia's positioning in the ongoing AI wave appears reinforced even as macro uncertainties persist. Investors should care because these developments validate Nvidia's roadmap and could drive upside to consensus estimates, especially if sovereign commitments and China re-entry accelerate. Also, from the chart we can see that consensus estimates point to over a 20% bump from its current price. In fact, the GF value is at $273, which is an enormous upside from current levels. This article first appeared on GuruFocus. Error while retrieving data Sign in to access your portfolio Error while retrieving data Error while retrieving data Error while retrieving data Error while retrieving data
Yahoo
2 hours ago
- Yahoo
Nvidia Retains Top Pick as AI Momentum Grows
Nvidia (NASDAQ:NVDA) remains a top sector pick after Bank of America's Vivek Arya returned from investor events in San Francisco with very positive feedback on AI demand, reaffirming his Buy rating and maintaining a $180 price target. Arya noted that Nvidia's Blackwell rack-scale systems now account for about 70% of compute sales, with Blackwell Ultra production slated to begin in Q2 alongside Rubin and Feynman on track, underscoring seamless generational transitions and limited ramp costs. Warning! GuruFocus has detected 4 Warning Signs with NVDA. He highlighted that the recent lifting of AI Diffusion export rules opens a sovereign AI growth vectorsovereign governments and CSPs are expected to build their own foundational models, expanding Nvidia's addressable market beyond hyperscalers. Addressing China-related risks, Arya emphasized that Nvidia considers its China AI exposure fully de-risked after H20 export restrictions, meaning any future sales into the $50 billion China AI TAM would be incremental upside, as current data center forecasts exclude China revenues. Management's guidance around Blackwell execution and the de-risked China outlook alleviates investor concerns that had restrained the stock over the past year. With the GB200 NVL systems fully ramping and strong cloud and enterprise interest, Nvidia's positioning in the ongoing AI wave appears reinforced even as macro uncertainties persist. Investors should care because these developments validate Nvidia's roadmap and could drive upside to consensus estimates, especially if sovereign commitments and China re-entry accelerate. Also, from the chart we can see that consensus estimates point to over a 20% bump from its current price. In fact, the GF value is at $273, which is an enormous upside from current levels. This article first appeared on GuruFocus. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
