Response to post, I personally will not try to take risks at this point. Currently, there are signs of stabilization in the short term, but it is not certain that this is the bottom. Because unfavorable macro factors still exist. Below are the results from GPT Deep Research, take it, you're welcome:

Reasons for UnitedHealth Stock Price Plunge and U.S. Healthcare Policy Outlook $Unitedhealth(UNH.US)

I. Analysis of Reasons for UnitedHealth Stock Price Plunge in May 2024

Background: UnitedHealth Group has long been a leader in the U.S. health insurance industry, with extensive operations in insurance services and medical networks (Optum division). However, since the beginning of 2024, a series of negative events and unfavorable factors have shaken the market's confidence in this once "stable" company, leading to a significant drop in stock price. UnitedHealth's stock price reached a historical high in November 2024 (closing price on November 11 was about $620), but in the following half year, it fell all the way, breaking below the $300 mark by mid-May 2025, with a cumulative decline of nearly 50%. Below we analyze the reasons for the stock price plunge from multiple aspects.

1. Direct Financial Impact of Cyber Attack: In February 2024, UnitedHealth's newly acquired technology unit Change Healthcare suffered a severe ransomware cyber attack, causing a nationwide disruption of the medical claims clearing system for nearly a month. This attack forced UnitedHealth to prepay over $6 billion to temporarily cover medical service providers and relax some pre-authorization (PA) restrictions to mitigate the impact. The company estimated that this event would result in a one-time loss of up to $1.6 billion in 2024. Although UnitedHealth still achieved better-than-expected profits in the first quarter of 2024 and claimed that the impact of the cyber attack was "not as severe as previously feared," maintaining its full-year profit guidance (EPS impact estimated at $1.15–$1.35), this event still impacted market sentiment: the company's stock price fell by about 15% from the disclosure of the attack (February 21) to mid-April. The cyber attack not only caused significant direct losses but also exposed the vulnerability of the company's technical systems and operations, raising investor concerns about the ongoing financial drag of security incidents.

2. Rising Medical Expenses and Slowing Profit Growth: A deeper reason for the pressure on UnitedHealth's stock price is the cyclical rise in medical costs putting pressure on profit margins. Starting from the fourth quarter of 2023, the company's insurance claim costs exceeded Wall Street expectations: the medical expense ratio rose to 85% in Q4 2023, and the surge in senior utilization led to a 16% increase in insurance spending. When releasing Q4 results in January 2024, although both earnings and revenue exceeded expectations, the "medical service costs exceeding expectations for the first time in two years" scared investors, causing the stock price to drop by about 4% that day. Management explained that factors such as additional RSV vaccinations for elderly patients during the holiday season and increased COVID-19 hospitalizations pushed up costs. Although UnitedHealth reiterated its 2024 medical cost guidance, believing that the high spending level at the end of 2023 would not persist throughout the year, analysts questioned whether this optimistic expectation fully considered the trend of rising medical demand. Sure enough, entering the second half of 2024, the problem of high medical expenses did not subside. The 2024 third-quarter earnings meeting provided a 2025 profit guidance below Wall Street expectations, and the company admitted that its government insurance-related business (including Medicare Advantage and federal health plans) would face ongoing cost pressures. This news caused the stock price to drop by about 8% on October 15, 2024. More seriously, in the first quarter of 2025, UnitedHealth experienced its first quarterly profit "miss" in more than a decade, and was forced to lower its full-year profit target — the company's CEO bluntly stated that this was an "unusual and unacceptable" performance failure. The profit miss was mainly due to medical expenses far exceeding forecasts, especially the increase in Medicare Advantage patient visits and costs, as well as increased utilization of Optum's medical services pushing up expenses. This "profit warning" on April 17, 2025, triggered a single-day stock price plunge of more than 20% (the largest single-day drop in 26 years for UnitedHealth), affecting the entire insurance sector. As medical claim pressure impacted profits, investors began to question the sustainability of the company's profit growth.

3. Accumulation of Policy and Regulatory Risks: The health insurance industry in which UnitedHealth operates faced an increasingly severe policy and regulatory environment around 2024, exacerbating market concerns about its long-term prospects. On the one hand, the federal government is strengthening the regulation of Medicare Advantage (federal senior insurance advantage plan) spending. The U.S. health department and congressional oversight agencies have criticized the "risk adjustment" mechanism of Medicare Advantage for years, accusing insurers of "upcoding" to make insured seniors appear sicker to receive higher government subsidies. At the end of 2023, the Centers for Medicare & Medicaid Services (CMS) finally finalized rules to recover improper overpayments from insurers through risk adjustment data validation (RADV). Starting in 2024, audits targeting years like 2018 will require major insurers to repay huge sums. This means that UnitedHealth may face hundreds of millions of dollars in future repayment expenses. In addition, adjustments to Medicare Advantage payments by the federal government in 2024 and 2025 are also unfavorable to insurers: benchmark rate increases are close to zero (-1.1% and -0.2%, respectively), significantly lower than the increases in previous years. This reflects the government's attempt to slow the growth of subsidies to private insurance plans to ease Medicare spending pressure.

On the other hand, federal law enforcement and antitrust agencies have also targeted industry giants including UnitedHealth. In the second half of 2024, the U.S. Department of Justice and state prosecutors jointly blocked UnitedHealth's $3.3 billion acquisition of home care company Amedisys, citing concerns about further consolidating its market power and weakening competition. In September 2024, the Federal Trade Commission (FTC) sued UnitedHealth's OptumRx and two other major pharmacy benefit managers (PBMs) for manipulating insulin pricing for profit. It can be said that regulatory pressure has increased sharply from mergers and acquisitions to daily operations. The most shocking to the market is the investigation into UnitedHealth's alleged Medicare fraud. In February 2025, media reported that the Department of Justice was investigating UnitedHealth's compliance issues in federal Medicare reimbursements; in mid-May, The Wall Street Journal further reported that the Department of Justice had launched a criminal fraud investigation into UnitedHealth's Medicare Advantage business, which had been filed as early as the summer of 2024. Although UnitedHealth claimed it had not received notice of the investigation and insisted on the compliance of its senior insurance business, this news undoubtedly heightened market fears of policy risks. The news caused the company's stock price to drop 8% after hours on the day it was reported, and it further hit a five-year low. According to company disclosures, UnitedHealth is currently under investigation, audit, and review by more than a dozen government agencies. These regulatory storms force investors to reserve risk premiums for potential fines and settlement expenses. Some analysts estimate that legal and settlement costs due to regulatory investigations alone could reach billions of dollars in the future.

4. Market Confidence Shaken and Valuation Reassessment: The result of the above events is that the market's trust in UnitedHealth's long-term business model is questioned. A health insurance giant known for its steady growth in the past has encountered a series of profit misses, cybersecurity vulnerabilities, executive attacks, and criminal investigations in just one year, which can be described as a "troubled time." An investment institution executive described: "Investors are now worried about whether there are other 'bad news' that have not been disclosed." The cost control measures UnitedHealth relied on in the past, such as pre-authorization approvals and claim denials, are now not only failing in business (unable to prevent soaring medical costs) but also attracting strong public and legislative criticism due to executive attacks (see below). The company's proud diversified medical service network Optum, which was supposed to be the "cure" for low-profit insurance business, has instead dragged down profits due to the rising utilization of high-cost specialty medical services under OptumHealth. All this has led investors to reevaluate UnitedHealth's growth prospects and reasonable valuation. Since the beginning of 2025, analysts who have long been bullish on UnitedHealth have abandoned their optimistic stance, and brokerages have downgraded ratings. For example, after the company suddenly withdrew its performance guidance and the CEO resigned, institutions like Raymond James rarely downgraded UnitedHealth's stock rating, bluntly stating that they need to "wait and see" whether the company can get out of trouble. Many fund managers said that only when UnitedHealth divests or adjusts problematic businesses and stabilizes profit expectations can confidence be restored. After consecutive heavy losses, UnitedHealth's valuation indicators such as P/E ratio have fallen sharply, and the current stock price has fallen more than 55% from the past 52-week high. Some describe it as "the worst sell-off in five years." It can be said that the market is now scrutinizing the long-term business model of this insurance giant with a more cautious eye, and a defensive medical blue-chip stock once considered a "must-buy" is no longer safe.

5. Stock Price Changes and Key Event Timeline: The table below lists major stock price fluctuations and related news events for UnitedHealth since 2024, helping to sort out the context of the stock price decline:

Chart: The proportion of U.S. Medicare Advantage enrollment from 2007 to 2024 has gradually increased (the blue bars represent the proportion of private Medicare Advantage among eligible elderly and disabled Medicare beneficiaries, reaching 54% in 2024). The large MA plan means a heavy government spending burden on insurance companies.

Table: Summary of major events and reactions of UnitedHealth stock price from 2024 to 2025. It can be seen that a series of negative factors such as cyber attacks, soaring medical costs, performance warnings, executive changes, and regulatory investigations have come one after another, causing a huge change in investor sentiment.

In summary, the decline in UnitedHealth stock in 2024, especially the plunge around May, is the result of multiple factors working together. In addition to the well-known direct financial losses from cyber attacks, more importantly, changes in the insurance industry environment and internal operational issues: rising medical utilization eroding profits, increased government regulation and subsidy reduction expectations, and a public trust crisis triggered by executive attacks have all reshaped the market's risk assessment of this insurance giant. Many analysts have begun to question the sustainability of UnitedHealth's past high-growth model, and if it cannot effectively control costs and adapt to the new regulatory environment, the company's future profit prospects will face challenges.

II. U.S. Healthcare Policy Direction under the Trump Administration in 2025: Will It Continue to "Target" Insurance Giants?

In 2025, after the U.S. election, the Trump administration came to power, facing high federal fiscal deficits and healthcare spending pressure. Medicare, as an important component of federal spending, naturally became a focus of deficit reduction discussions. So, will the Trump administration continue and strengthen the rectification of healthcare insurance giants like UnitedHealth ("target")? We analyze from policy orientation and historical actions.

1. Trump's Healthcare Spending Strategy: Cut or Support? It is worth noting that Trump has consistently claimed that he will not cut senior insurance and other benefits. He repeatedly promised "not to touch Medicare, not to cut benefits" during his first term. At the beginning of his term in 2025, the Trump administration's actions also showed contradictory signals: on the one hand, its healthcare management agency (CMS) significantly increased the payment benchmark for Medicare Advantage plans in 2026 by 5.1% — the highest increase in a decade, more than double the 2.2% increase originally proposed by the Biden administration. According to statistics, this means that in 2026, the federal government will pay private Medicare Advantage insurers an additional $30 billion. Such a generous increase is seen as a "favorable" move by the Trump administration for the private insurance industry, allowing insurance giants to receive more subsidies from the government.

However, on the other hand, the Trump administration is not without spending control measures. While raising payment standards, they did not cancel the previously proposed risk adjustment reforms: CMS decided to fully implement the new risk model in 2024–2025 (despite industry opposition) to more accurately adjust payments to insurers. This new model is expected to weaken the boosting effect of certain common diagnostic codes on subsidies, thereby curbing insurers' behavior of over-reporting conditions to obtain excess payments. Therefore, it can be said that the Trump administration's strategy on Medicare Advantage is **"soft and hard"**: one hand provides more financial support, while the other retains technical constraints on insurers' abuse of risk adjustment.

2. Different Targets for Deficit Control Pressure: At the beginning of the Trump administration, a large-scale tax cut plan was proposed, requiring hundreds of billions of dollars in cuts in the budget to offset spending. The Republican Congress reportedly targeted programs like Medicaid for cuts. Democrats, on the other hand, called for addressing waste in Medicare Advantage instead of cutting medical benefits for American families relying on Medicaid. In May 2025, five progressive senators, including Sanders and Warren, jointly wrote to Republican leaders, pointing out that Medicare Advantage is "riddled with wasteful spending," with insurers exaggerating conditions through upcoding to receive more government money, seen as "fraud and abuse." They bluntly stated: "To cut federal healthcare spending, we should target the waste and fraud perpetrated by profit-driven insurance companies, not cut medical benefits for American families relying on Medicaid." This letter reflects another voice in Congress, namely stricter audits and payment discipline for large Medicare Advantage insurers, which may become a way to control healthcare spending.

Will the Trump administration adopt such an approach? Historically, the Republican Party has generally supported Medicare Advantage, believing that private plans provide higher efficiency and choice. However, under deficit pressure, it is not ruled out that they may focus on insurers' profits as a way to "open source and reduce expenditure." Especially in the context of increasing public and bipartisan attention to Medicare Advantage overpayment issues, moderately reducing the subsidy water for insurers may be more politically feasible than directly cutting senior benefits. We have already seen that the Department of Justice's criminal investigation into UnitedHealth's alleged Medicare billing fraud did not stop under Trump, but instead appeared in the media in May; Republican senators like Grassley also demanded that UnitedHealth explain its Medicare billing situation in detail. Therefore, it can be expected that while the Trump administration maintains the "no cut to senior benefits" promise on the surface, it will continue or even strengthen the investigation of insurance company fraud and abuse to achieve the goal of reducing improper spending. This is actually another form of "targeting" insurance giants — tightening the loopholes through which they receive money from the government through legal and regulatory means, rather than directly legislating to cut Medicare programs.

3. Will Policy Focus on Leading Companies? Based on the above, if the Trump administration takes action in the Medicare Advantage field, the main impact targets will inevitably be leading companies like UnitedHealth. UnitedHealth currently has the largest market share in Medicare Advantage (over 9 million MA members in 2024) and is one of the most profitable insurers. Regulatory investigations and audits often focus on such large-scale enterprises to set an example. For example, the Department of Justice's criminal investigation named UnitedHealth precisely because its scale determines that once fraud is found, the amount involved is huge and the impact is far-reaching. Similarly, the FTC's lawsuit against the PBM industry targeted the three giants, including UnitedHealth's OptumRx. It can be foreseen that under the policy pressure to control healthcare spending, the business model and profit margins of large insurance companies will be the first to be scrutinized. Congress and regulatory agencies may require these companies to take measures: for example, streamline administrative expenses, exit overly profitable or unprofitable markets, and reduce excessive charges for insurance plans. UnitedHealth investors also expect management to have to adjust strategies, such as exiting some low-profit senior insurance regional markets and changing insurance plan designs to guide patients to use cheaper drugs and services to reduce claim costs. These measures will directly affect the business landscape and profit margins of large insurance companies. In other words, the "knife edge" of policy is directed at industry leaders like UnitedHealth.

4. CEO Attack Incident and Regulatory Environment: The unfortunate attack on UnitedHealth executives at the end of 2024 also had an impact on the social and political levels that cannot be ignored. After the news of Brian Thompson's shooting was reported, a considerable part of the public opinion on social media showed anger at insurance companies rather than sympathy. "Thousands of patients die in hospitals because insurance refuses to pay, but no one is held accountable; now an insurance CEO is shot dead on the street, and it becomes big news" — such extreme comments appeared in large numbers online. This public sentiment indicates that the American public has long-standing grievances against the health insurance system. When ordinary people see insurance companies as "profit-driven exploiters of patients," policymakers cannot remain indifferent. In fact, shortly after the executive attack incident, UnitedHealth CEO Witty stated at an investor meeting in January 2025 that the U.S. healthcare system needs to be "simpler, more transparent, and cheaper," and promised to cooperate with policymakers to reduce cumbersome pre-authorization approvals in Medicare business. This move is seen as a direct response to public opinion and regulatory signals — UnitedHealth is trying to self-restrain and alleviate external pressure. Meanwhile, voices focusing on insurance company business practices also appeared on Capitol Hill. For example, bipartisan lawmakers pushed for legislation in 2023–2024 to require Medicare Advantage plans to improve transparency and pre-authorization processes to ensure patients receive timely care. It can be expected that in the atmosphere of damaged insurance industry reputation, regulatory agencies and legislators during the Trump administration will be more bold in regulating insurance company behavior. Even if the Trump administration itself is cautious about corporate regulation, it may be forced by public opinion to support some rectification of insurance industry misconduct, such as limiting excessive claim denials and approval delays, and requiring disclosure of each company's claim approval rate. In short, although the CEO attack incident is an extreme case, it has become one of the last straws that broke the camel's back, forcing insurance giants to face their image crisis in the eyes of the public and government and make preemptive changes.

5. Possible Paths for Trump's Healthcare Reform: In summary, the overall orientation of the Trump administration in the healthcare field will show characteristics of marketization and cost control. On the one hand, continuing the Republican preference for privatization paths: encouraging the expansion of coverage for private plans like Medicare Advantage. The "2025 Project" blueprint launched by conservative think tanks even suggests changing the default option for Medicare to private plans so that more seniors automatically enter Medicare Advantage. If implemented, this would undoubtedly be a major benefit for companies like UnitedHealth, meaning millions of new users and revenue (although critics warn that this is equivalent to giving insurance companies a "tens of billions of dollars gift," endangering Medicare's future sustainability). The Trump administration's actions in the first term and current moves also show a tendency to support private healthcare, such as promoting the expansion of short-term health insurance policies and relaxing Obamacare requirements to give insurance companies more operating space.

But on the other hand, the Trump administration must also respond to fiscal and public pressure to correct the healthcare system to some extent. Therefore, it can be expected that its reform will focus on **"improving efficiency and plugging loopholes". Specifically: continue to strictly investigate risk adjustment fraud and improper charges in Medicare Advantage, use audits and judicial means to make large insurers return unearned funds, and establish stricter risk adjustment models to prevent future overpayments. At the same time, it may promote regulations to improve healthcare transparency and service quality, such as requiring disclosure of claim approval rates for each insurance plan and limiting excessive use of pre-authorization, thereby politically proving to voters that it does not favor "big insurance companies." In terms of drug and medical service pricing, the Trump administration may also support some rectification of middlemen **(such as investigations and lawsuits against PBM rebates) to demonstrate its determination to control medical costs.

It is important to emphasize that the Trump administration will not openly cut Medicare payment standards or directly cut senior benefits, as this would violate its campaign promises and carry political risks. Even if spending needs to be cut, it is more likely to use technical means to slow growth rather than drastically cut budgets. For example, using milder terms and measures such as "eliminating waste" and "combating fraud" to achieve cost-saving purposes — in fact, this is "targeting" insurance giants like UnitedHealth. In the coming years, we may see UnitedHealth continue to enjoy business scale growth brought by the increasing senior population on the one hand, and on the other hand, be subject to more stringent audits and public scrutiny, forced to sacrifice some profit margins to gain policy support. Investors expect that UnitedHealth will not stabilize profit growth until 2026, and the premise is to successfully weather the current regulatory storm and adapt to the new policy environment.

Conclusion: The dramatic changes in 2024–2025 indicate that healthcare insurance giants are at an industry turning point. A series of events have caused UnitedHealth's stock price to be halved, reflecting the market's re-pricing of industry policy risks. Under the Trump administration, although senior insurance benefits will not be recklessly cut, due to cost control and public opinion considerations, it is expected to continue to scrutinize and rectify insurance company profit models. Giants like UnitedHealth may need to adjust strategies, actively cooperate to reduce costs and improve service quality while pursuing growth, to adapt to the new era of regulation and public expectations. As UnitedHealth's CEO said, American healthcare needs to become "less complicated and less expensive," which is both a public policy goal and a challenge facing insurance industry giants. Only by following the reform trend and balancing the interests of all parties can insurance companies get out of the current predicament and regain market confidence.