New York: UnitedHealth Group’s shares plunged nearly 13% on Thursday following a Wall Street Journal report that the U.S. Department of Justice has launched a criminal investigation into the healthcare giant over potential Medicare fraud.
The probe marks another significant setback for UnitedHealth, which has seen its market value shrink by more than half — over $300 billion — since November, when its stock reached record highs. As of midday Thursday, shares had fallen to $267, nearing five-year lows and making it the worst-performing component of the Dow Jones Industrial Average this year.
“The stock is already in the doghouse with investors, and additional uncertainty will only pile on,” said James Harlow, senior vice president at Novare Capital Management, which holds UnitedHealth shares.
The latest report intensifies an already turbulent week for the company. On Tuesday, UnitedHealth’s shares dropped 18% to a four-year low following the unexpected resignation of CEO Andrew Witty and the withdrawal of the company’s 2025 financial forecast.
“UnitedHealth Group is mired in a crisis seemingly without end. Investors are bracing for another big bout of turbulence given reports of the DoJ investigation,” said Susannah Streeter, head of money and markets at Hargreaves Lansdown.
UnitedHealth has stated that it has not been notified of any criminal investigation by the Justice Department. In February, the Wall Street Journal also reported a separate civil fraud probe into the company’s Medicare operations, which UnitedHealth similarly claimed it had not been made aware of at the time.
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The health insurance sector — including pharmacy benefit managers, or PBMs — has come under growing scrutiny from federal regulators and the public. UnitedHealth, long a dominant force in the insurance space and a major player in the Medicare market, now faces increased pressure over its role in the government-funded program for elderly Americans.
In a bid to restore confidence, the company has reinstated former CEO Stephen Hemsley to lead the organization. This move aligns with a broader trend of companies turning to veteran executives in times of crisis to reassure investors and stabilize operations.
Despite mounting challenges, some analysts remain cautiously optimistic. Oppenheimer analyst Michael Wiederhorn commented that the company’s core fundamentals remain intact, although he acknowledged that “it may take time to win back the marketplace’s confidence.”
