Dive Brief:
UnitedHealth has tapped longtime insurance executive Mike Cotton to lead its Medicaid business, filling a role that has stood empty since the company reshuffled its executive team earlier this year, the company confirmed to Healthcare Dive.
Meanwhile, Bobby Hunter, who leads the healthcare juggernaut’s Medicare division, is stepping up as CEO of government programs, with oversight of both Medicare and Medicaid.
The changes follow board chair Stephen Hemsley returning as the company’s CEO this spring after UnitedHealth pulled its financial outlook, citing an unexpected step-up in medical spending. The move sent UnitedHealth’s shares plummeting.
Dive Insight:
The executive appointments are the latest leadership changes at the beleaguered healthcare behemoth, which operates the largest private insurer in the U.S., a major pharmacy benefits manager, an extensive physician network and other businesses.
But UnitedHealth’s value has plummeted this year as the company struggles to adjust to an unforeseen increase in medical spending. Higher utilization in Medicare Advantage plans has been spreading to more complex patients, like people dually eligible for Medicare and Medicaid, and popping up in traditionally healthier populations as well, like people enrolled in Affordable Care Act plans.
Pressure in government programs is also hitting Centene and Molina, two payers with a heavy presence in Medicaid and the ACA that pulled and cut their 2025 guidances, respectively, this month.
But UnitedHealth is also facing intense regulatory scrutiny. According to reports, the Minnesota-based payer faces a criminal investigation by the Department of Justice, with the Wall Street Journal reporting on Wednesday that prosecutors are questioning former UnitedHealth employees over the company’s billing practices.
The pressures have led multiple investment banks to downgrade UnitedHealth’s stock, which has lost more than 40% of its value year-to-date.
UnitedHealth plans to report second quarter earnings on July 29.
