Dive Brief:
UnitedHealth is being sued by a group of shareholders for allegedly hiding a corporate strategy to deny medical care and obfuscating how the killing of Brian Thompson, the CEO of the healthcare juggernaut’s insurance division, impacted the business.
Shareholders suffered as a result, according to the lawsuit, which was filed Wednesday in Manhattan federal court and seeks class action status.
The lawsuit seeks damages for UnitedHealth shareholders who purchased stock between December 2024 and April 2025. UnitedHealth said it intends to contest the suit.
Dive Insight:
Thompson was gunned down in early December while entering a hotel in Manhattan to participate in UnitedHealth’s annual investor day. The killing of the UnitedHealthcare CEO shocked the nation and intensified a broader debate about insurers profiting from delaying or denying medical care, given that anger over those practices appear to have driven the crime.
As the largest private insurer in the nation covering more than 50 million people, UnitedHealthcare has faced aggressive scrutiny from lawmakers and regulators amid data showing it denies care at higher rates than many of its peers.
The new lawsuit zeroes in on alleged damages to shareholders from UnitedHealth’s behavior, arguing that UnitedHealth’s financial guidance for 2025 released prior to Thompson’s death quickly became misleading in light of the turmoil — yet, the company still reiterated it earlier this year.
“The statement was materially false and misleading at the time it was made because it omitted that the Company was no longer willing (as a result of heightened scrutiny against the Company, as well as open hostility against the Company from large swaths of the general public) to use the aggressive, anti-consumer tactics that it would need to achieve $28.15-$28.65 in earnings per share, or $29.50 to $20.00 in adjusted net earnings per share,” the lawsuit says. “As such, the Company was deliberately reckless in doubling down on its previously issued guidance.”
A clearer picture of UnitedHealth’s true financial health emerged in April, when UnitedHealth released results for the first quarter of 2025 that drastically underperformed analysts’ expectations, according to the suit.
UnitedHealth also cut its profit outlook for the year by 12%, citing in part unexpectedly high care costs for seniors in its Medicare Advantage plans. The comments suggested that the company could be pulling back on utilization management processes like prior authorizations, and approving more medical care as a result, some analysts said.
Following Thompson’s death, UnitedHealth did pledge to reduce processes that can restrict treatment being approved.
Since the earnings release, UnitedHealth’s stock has fallen 33%, erasing more than $150 billion in market value. The company’s stock is currently at its lowest level since the summer of 2021.
UnitedHealth’s value has dropped significantly over the past six months
$UNH price at close, December 2024 to date
“As a result of Defendants’ wrongful acts and omissions, and the precipitous decline in the market value of the Company’s securities, Plaintiff and other Class members have suffered significant losses and damages,” the lawsuit says.
Lawyers for the plaintiffs believe there are hundreds, if not thousands, of members in the proposed class who are entitled to “substantial damages,” according to the suit.
UnitedHealth “denies any allegations of wrongdoing and intends to defend the matter vigorously,” a spokesperson said in a statement.
Shareholders have previously tried to take the company to task, with a group of faith-based investors proposing that UnitedHealth investigate the impact of care denials on its business, the economy and patients generally. However, the investors withdrew the proposal last month after UnitedHealth blocked it.
