Hemsley returns as CEO amid leadership shock, Medicare cost surge, and federal probes
UnitedHealth Group (NYSE: UNH) shares plummeted 17.79% to close at US$311.38 on Tuesday—wiping tens of billions off its market capitalisation—after CEO Andrew Witty abruptly stepped down, and the company withdrew its 2025 financial guidance.
The leadership shake-up sees Stephen J. Hemsley, who served as CEO from 2006 to 2017 and remained chairman, reinstated as chief executive effective immediately. Witty, who cited “personal reasons” for his resignation, will stay on as a senior adviser.
Fallout from a punishing five-month stretch
The dramatic market reaction caps what has been a harrowing period for the healthcare giant. In December, the CEO of UnitedHealthcare—UnitedHealth Group’s core insurance subsidiary—Brian Thompson was shot and killed in a targeted attack while walking to an investor conference in New York. The killing, which sparked widespread outrage and online vitriol aimed at the insurance industry, remains under national scrutiny. The accused, Luigi Mangione, has pleaded not guilty to multiple federal and state charges, including murder and terrorism.
Since that event, UnitedHealth stock has fallen nearly 38%, with Tuesday’s collapse pushing shares to levels not seen in nearly five years. Other insurers, including Elevance, Cigna, and Humana, also slid 4–7% in sympathy.
Forecast withdrawn, Medicare costs surge
The company said it had suspended its 2025 financial outlook, citing a rise in medical costs from new Medicare Advantage enrollees. UnitedHealthcare is the largest provider of these privately run plans, with over 8 million members. The company said it now expects to return to growth in 2026.
Last month, UnitedHealth had already lowered its guidance following a rare earnings miss—its first in over a decade. On Tuesday’s analyst call, Hemsley acknowledged: “I’m deeply disappointed in and apologise for the performance setbacks… many of the issues standing in the way… are within our control.”
A return to the architect
At 72, Hemsley is being brought back to stabilise a company he helped transform from a large insurance player into a US$400bn healthcare conglomerate, with businesses spanning insurance, pharmacy benefit management, and clinical services through its Optum arm.
“He put the company together,” said one former executive. “He will figure it out.” Known for his detail-oriented management style, Hemsley is still based near the Minnesota headquarters, unlike Witty, who often worked from Washington or London.
Insiders say there will be no learning curve. “You better know your stuff, and if you don’t, he probably knows it better than you,” said a former colleague.
Legal scrutiny mounts
The company is also under at least two Justice Department investigations—one focused on potential antitrust issues, and another probing its Medicare billing practices, which were the subject of recent Senate hearings and investigative journalism. New Medicare agency head Mehmet Oz has vowed to crack down on abusive billing schemes.
The political and regulatory environment may have contributed to Witty’s exit, despite his efforts to strike a conciliatory tone. In a New York Times essay last year, he acknowledged the US health system was “not perfect” and that coverage decisions were “not well understood.” Still, critics accuse UnitedHealth of opacity and cost-cutting at the expense of patient care.
Broader implications for healthcare and governance
The sudden executive turnover, high-profile violence, financial uncertainty, and public distrust have put a spotlight on both corporate governance and the social license of major health insurers.
Witty, formerly CEO of GlaxoSmithKline, had overseen a period of rapid revenue growth—from US$257bn in 2020 to over US$400bn in 2024—but also faced calls to reform the company’s role in the healthcare system.
Hemsley’s return signals a strategic doubling down. In a letter to staff, he wrote: “We have the right strategy and structure for the era ahead… [but] performance must match the potential of our enterprise.”
