UnitedHealth Shares Fall Over 15% Amid DOJ Medicare Fraud Investigation

UnitedHealth Group's stock has plummeted sharply, dropping over 15% amid reports of a Department of Justice criminal investigation into potential Medicare fraud involving manipulated billing practices in its Medicare Advantage business. The probe, which has been ongoing since at least last summer, examines allegations that UnitedHealth inflated patient risk scores to boost federal payments, a claim the company denies and states it was not notified about. This investigation adds to existing legal challenges, including a civil fraud case and whistleblower lawsuits concerning its Optum division's coding practices, alongside operational difficulties like rising health costs, a cyberattack, and leadership changes including CEO Andrew Witty's sudden departure. The stock's decline has erased significant market value, contributing to the healthcare sector's underperformance in 2025, with broader impacts on healthcare ETFs and rival insurers' shares. While UnitedHealth maintains confidence in its Medicare Advantage program's integrity, investor confidence remains shaken amid these compounding issues. Despite financial stress indicators, the company shows no signs of earnings manipulation and offers a relatively attractive dividend yield, presenting a complex risk-reward profile for investors.