UnitedHealth Group and other health insurance stock prices are tumbling today. Here’s why

UnitedHealth Group's stock plummeted over 22% due to disappointing first-quarter earnings and a revised, lowered full-year outlook. The company reduced its 2025 earnings forecast significantly, citing higher-than-anticipated medical service utilization in Medicare Advantage plans. Optum Health also experienced unexpected changes in patient demographics and a higher proportion of complex cases, impacting projected revenue. Increased patient volume, particularly in senior and complex care segments, contributed to the shortfall. The company added 545,000 new members in the first quarter, expecting further growth in 2025. Despite the setbacks, UnitedHealth believes these challenges are manageable and expects improvement in 2026. The news triggered widespread sell-offs in the health insurance sector, impacting competitors like Humana, Elevance Health, and CVS Health. Despite the lowered outlook, the company reported substantial revenue growth of $9.8 billion year-over-year, reaching $109.6 billion. The CEO expressed confidence in addressing the challenges and returning to long-term growth targets.