(Reuters) – UnitedHealth Group on Tuesday suspended its 2025 forecast, just weeks after lowering its outlook, and announced the surprise exit of CEO Andrew Witty, sending its shares down 8% premarket.
The announcement also pulled down shares of other health insurers such as Humana, CVS and Elevance between 1% and 3%.
Stephen Hemsley, who served as CEO from 2006-2017, will take over from Witty. Hemsley joined the company as chief operating officer in 1997 and became president in 1999.
The U.S. health insurance industry has been grappling with increased costs since mid-2023 due to a surge in demand for healthcare services under government-backed Medicare plans for older adults or individuals with disabilities.
In April, UnitedHealth posted its first earnings miss since 2008 and lowered its annual outlook citing higher-then-expected medical costs and “unanticipated changes” in its Optum business that impacted planned 2025 reimbursements.
The industry also had a rough 2024, hurt by lower government payments, elevated medical costs and public backlash against the sector after the murder of UnitedHealth’s then insurance unit head Brian Thompson late last year.
Thompson’s fatal shooting also unleashed a social media storm of patient dissatisfaction and ire over the health insurance industry’s practices, adding to the company’s woes.
The company was also sued earlier this month for allegedly concealing how backlash from Thompson’s killing was damaging its business.
UnitedHealth expects to return to growth in 2026, it said on Tuesday.
(Reporting by Sriparna Roy in Bengaluru; Editing by Tasim Zahid and Devika Syamnath)
