UnitedHealth Is Cutting Medicare Advantage Plans. Here Is Where UNH Stock Could Be Headed Next.

UnitedHealth (UNH) [https://www.barchart.com/quotes/UNH] is scaling back its Medicare Advantage offerings for 2025, exiting over 100 plans across 109 counties in 16 states. 

This decision will impact as many as 180,000 beneficiaries and reflects mounting pressures from regulatory changes, federal funding cuts, and escalating healthcare costs. 

UnitedHealth stock remained resilient following the announcement and is currently up more than 50% [https://www.barchart.com/stocks/quotes/UNH/performance] versus its year-to-date low in early August. 
www.barchart.com [https://www.barchart.com/stocks/quotes/UNH/interactive-chart]

UNH SHARES FACE MEDICARE ADVANTAGE-RELATED HEADWINDS

UNH’s announcement arrives at a time when the broader Medicare Advantage market is showing clear signs of stress with enrollment growth dramatically slowing to just 3% between 2024-2025.

This industry-wide challenge is further evidenced by similar actions from other major insurers like Aetna and Humana [https://www.barchart.com/story/news/35171529/why-humana-hum-shares-are-plunging-today] (HUM) [https://www.barchart.com/quotes/HUM]. 

Medicare Part B premiums are projected to rise 11.6% to $206.50 next year, while the deductible is expected to increase 12% to $288, adding to the financial pressures facing both insurers and beneficiaries. 

In a recent press release, UnitedHealth’s head of government programs emphasized that the current market conditions have become increasingly unsustainable, necessitating portfolio adjustments to maintain financial stability. 

WHERE OPTIONS DATA SUGGESTS UNITEDHEALTH STOCK IS HEADED

While UNH shares have remained rather resilient after the Medicare Advantage announcement, options data paint a more cautious picture for investors. 

In the near term, the expected move [https://www.barchart.com/stocks/quotes/UNH/expected-move] through the end of this week is 2.91%, capped between $349.71 and $370.69. 

Given the mounting headwinds, from regulatory tightening and federal funding cuts to rising Medicare Advantage costs and slowing Advantage enrollment, downside risk sure appears more probable. 

Meanwhile, longer-dated options expiring Jan. 16 reflect a broader range between $409.44 and $310.96, also indicating investor uncertainty. 

With peers like Aetna and Humana also retreating from Medicare Advantage, and Part B premiums set to jump more than 11%, sentiment may skew bearish as portfolio pressures intensify and margin compression looms.

WALL STREET FORECASTS SIGNIFICANT DOWNSIDE IN UNITEDHEALTH

Investors should also note that Wall Street analysts also now see the UnitedHealth stock price rally as overdone. 

The consensus rating on UNH shares currently sits at “Moderate Buy [https://www.barchart.com/stocks/quotes/UNH/analyst-ratings]” but the mean target of about $325 indicates potential downside of nearly 10% from here.  
[A graph on a computer screen AI-generated content may be incorrect.]www.barchart.com [https://www.barchart.com/stocks/quotes/UNH/analyst-ratings]_ This article was created with the support of automated content tools from our partners at Sigma.AI. Together, our financial data and AI solutions help us to deliver more informed market headline analysis to readers faster than ever. On the date of publication, Wajeeh Khan did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here [https://www.barchart.com/terms#disclosure]. _