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UnitedHealth Group (UNH) is suspending its full-year guidance as the health insurer announced that CEO Andrew Witty will be stepping down on Tuesday. Former CEO Stephen Hemsley will be rejoining the company to lead as chief executive. The company's stock gets hit around all these headlines, down 12% at the start of the trading session.
Yahoo Finance senior health reporter Anjalee Khemlani comes on to talk about the company's previous forecasts on higher-than-expected medical costs and United's managerial change.
To watch more expert insights and analysis on the latest market action, check out more Morning Brief here.
United Health down over 12% after naming board chairman Steven Hemsley as its new CEO, replacing Andrew Witty. The company also suspending its full-year outlook due to high medical costs. Yahoo! Finance senior health reporter, Anjalee Khemlani joining us now with more. Anj.
Hey, guys. Yeah, really surprising news out of United Healthcare, but not so much if you've been watching the company and rough past couple of years between pressure from the federal government, a DOJ investigation, FTC scrutiny as well as higher medical costs coming, especially from its Medicare advantage. But executives on a call today to investors saying that that could spread to other areas. With this change in leadership, bringing back a former CEO Steven Hemsley is looking to rightsize the ship and bring costs under control and bring the company back to profitability in 2026. He said on a call today, quote, "I'm deeply disappointed and apologize for the performance setbacks we've encountered. Many of the issues standing in the way of achieving our goals as well as our opportunities are largely within our control. This includes pricing for the Medicare plans, as well as other areas." We know that the company has been hammered by not just the scrutiny, but also the Change Healthcare cyber attack, the unfortunate killing of a United Healthcare CEO, Brian Thompson, last year and the stepping down of Witty, while, you know, it's unclear what prompted that. He did say in a statement that it was for personal reasons. We're still finding out more, but as you can see, the stock action showing negative. I've also seen some notes that say this change in management is actually a positive, as there has been a lack of confidence in management in the last several years, or months rather.
