UnitedHealth Group lost half its value in 6 months. What the CEO shakeup may mean for its future.

Stephen Hemsley hasn’t been CEO at UnitedHealth Group in nearly a decade yet he’s never really left.

Hemsley, 72, has remained chair and a major shareholder in the health care behemoth — and now is back in the CEO suite where he is expected to reinstate his brand of operational and financial discipline that turbocharged the company’s growth.

His return follows uncharacteristic financial missteps and months of tumult for the company, including the fatal ambush of a top UnitedHealth executive on Dec. 4.

Since that day, the company’s stock has fallen from $610 a share to $308 on Tuesday, an unprecedented decline for the company that culminated in this week’s CEO transition.

With Chief Executive Andrew Witty’s abrupt exit from the role Tuesday, Hemsley is expected to dust off the playbook that handsomely rewarded UnitedHealth shareholders during his reign from 2006 to 2017.

The Eden Prairie-based company’s profit soared and revenues nearly tripled as Hemsley led United through a period of expansion. Fortune magazine hailed him as the “most successful CEO of his generation” when he stepped down in September 2017.

“Hemsley built modern UNH; he is tasked with returning it to what it can be,” J.P. Morgan stock analyst Lisa Gill said in a research note.

UnitedHealth, long seen by Wall Street as a reliable profit machine, stunned investors Tuesday by suspending its earnings guidance for 2025 and predicting a return to profitable growth next year. That action, along with Witty’s surprise exit, sent the company’s stock tumbling 18%.

This was the proverbial other shoe dropping.

The first being on April 17 when United chopped its 2025 earnings outlook, tanking its stock by 22%, a record one-day drop.

While the company cited personal reasons for Witty’s departure, former company executives say he committed the cardinal sin as CEO at UnitedHealth: The company under his leadership fell short of financial guidance to shareholders.

The miss in April was bad enough, they say, since it forced a significant downward revision in projected profits. Worse still was the suspension of financial guidance announced Tuesday, since it suggests numbers for the second quarter were still bad or even worse.

“It’s one thing at United if you miss once,” one former executive said. “It’s another thing if you miss twice.”

The company’s value decline has hit Hemsley personally: He owns 1.2 million shares of UnitedHealth stock.

United’s financial challenges alone are tricky. Its health plans that manage care for Medicare and Medicaid beneficiaries, in particular, could be facing big funding cuts due to Trump administration changes, said Jonathan Weiner, a health policy and management professor at the Johns Hopkins Bloomberg School of Public Health.

“This is not an easy time,” Weiner said.

The killing of Brian Thompson, who ran the massive UnitedHealthcare health insurance business nested within the parent company, unleashed a wave of public anger at the health insurance industry. The ire has focused on United for two key reasons: its status as the nation’s largest health insurer and the limited availability of data about claims denials, leaving it open to interpretation.

Hemsley faces significant challenges, including the company’s internal culture in the wake of this hostility and its reputation among patients and health care providers, said Dr. Archelle Georgiou, UnitedHealth’s former chief medical officer who worked with Hemsley from the 1990s through 2007.

“I think that they have been tone deaf in the response to the marketplace’s anger at how challenging it is to work with United,” Georgiou said.

The company has used its strength to get what it wants in the market, thereby becoming hard to work with for patients and health care providers, she added. Negative perceptions have grown as “strength has turned into arrogance, and I think that gets in the way of innovation and collaboration.”

As a shareholder, Georgiou said she’s thrilled Hemsley has returned to the top spot. Hemsley’s understanding of health care and his company are phenomenal, she said, while his focus and discipline are unmatched.

She called Hemsley the hardest working person she’s ever met: Sundays are his only day off and maybe for only half the day. And Hemsley expects the same from other top executives, she added.

“Steve does what he has to do,” she said “He’ll probably look at the financials first, but I have confidence that Steve will recognize the importance of reputation in the market.”

Stock analysts were troubled by the earnings mess because it’s not simply an issue of costs rising faster than expected in UnitedHealthcare‘s Medicare Advantage business, a key source of profits. The company is the nation’s largest seller of health plans under the government-funded program.

Patients new to UnitedHealthcare have had their medical issues “coded” in ways that actually fall short of their true health care needs, company officials have said.

That’s seen as a problem because insurers rely on higher “risk adjustment” payments based on these diagnosis codes to finance Medicare Advantage plans.

The issue has affected financial results in Optum Health, as well, which is United’s fast-growing business running outpatient medical clinics.

Witty and executives said in April the company would remedy the problem by adjusting the codes, but United has faced considerable scrutiny over whether past coding practices have wrongly driven profits by being overly aggressive.

“Since regulators have been scrutinizing those risk assessments, in particular, that may not be a long-term fix,” Julie Utterback, an analyst with Morningstar, said via e-mail.

UnitedHealth doesn’t appear to be in an existential crisis: several stock analysts, Tuesday reiterated their “buy” ratings on the company, including Deutsche Bank’s George Hill.

But Hill, in a report, brought up the specter of General Electric, another American corporate colossus whose stock long commanded a premium before it fell on hard times and split into three companies.

“Similar to GE, UNH is a company that shareholders regarded as best in class, and could historically ... manage earnings like clockwork,” Hill wrote.

“The analogy is not perfect,” he continued, but like GE, United over the past several years has expanded rapidly through acquisitions and “moved aggressively up the risk curve,” noting its Medicare Advantage business.

“While we do not yet envision an unwind of UNH [like GE],” Hill wrote, “we fear that UNH’s halo could be severely damaged, and it could take years for [United] to return to its premium valuation.”

UnitedHealth has long sparked controversy, including questions about its billing practices. The storm around the company has intensified in the past year.

In February 2024, its Change Healthcare division was hit by one of the largest U.S. cyber attacks ever, affecting 1 in 2 Americans. Witty apologized to a U.S. Senate committee and admitted that hackers had breached a portal lacking multifactor authentication protections.

Dozens of lawsuits over the breach have been filed against United.

The Wall Street Journal reported late Wednesday that the Department of Justice (DOJ) has opened a criminal investigation into UnitedHealth, citing people familiar with the matter. Although it is unknown exactly what charges are being investigated, the sources said it had to do with UnitedHealth’s Medicare Advantage business.

The Journal reported in February 2024 that the DOJ was investigating relationships between UnitedHealth’s insurance business and its Optum health care services division.

Then this February, it reported that the DOJ had initiated a separate civil fraud inquiry into UnitedHealth’s Medicare billing practices. The company pushed back, saying at the time it was not aware of any such investigation.

Also, the DOJ in November sued — on antitrust grounds — to block UnitedHealth Group’s proposed $3.3 billion proposed acquisition of home health care and hospice provider Amedisys.

Hemsley, an accountant by training, landed as an executive at UnitedHealth in 1997 after serving as CFO and a managing partner at Arthur Andersen.

He amassed a fortune during his tenure at UnitedHealth, starting his own investment company, Cloverfields Capital Group, about five years ago. It manages over $300 million for 60 wealthy people and three charities, according to filings with federal securities regulators.

In a March 2025 brochure for investors, Cloverfields lists under “conflicts of interest” that its “principal” was UnitedHealth’s chairman and has a “vested interest in the overall success of UnitedHealth Group.”

Hemsley and his wife Barbara have their own charity called Cloverfields Foundation. It had $55 million in net assets in 2023, the last year for which IRS filings are available.

Cloverfields gave away $5.7 million in 2023, with many grants going to organizations in Minnesota.

The largest grant — $1.5 million — was to the Leo C. Byrne Residence Fund. The Byrne residence, owned by the Catholic church, is a home for retired priests in St. Paul.

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