UnitedHealth Shares Tumble Amid Senate Scrutiny as $2.36B Volume Ranks 33rd in Sector-Wide Selloff

Market Snapshot

UnitedHealth Group (UNH) shares closed 1.01% lower on January 12, 2026, amid heightened scrutiny over its Medicare Advantage practices. Trading volume surged to $2.36 billion, a 65.87% increase from the prior day, ranking the stock 33rd in volume among all equities. Despite the decline, the stock’s performance reflected broader sector-wide weakness, as peers like Centene (CNC) and Molina Healthcare (MOH) also dropped by 2.4% and 1.3%, respectively. The selloff followed a Senate Judiciary Committee report alleging the company employed “aggressive tactics” to inflate payments through risk adjustment mechanisms.

Key Drivers

The Senate report, based on a review of 50,000 pages of UnitedHealth records, accused the insurer of transforming risk adjustment—where federal payments to Medicare Advantage plans are adjusted based on patient diagnoses—into a revenue-generating strategy. The report highlighted the systematic addition of diagnoses to patient records, some of which were deemed questionable or inaccurate, to secure higher reimbursements from the government. This practice, critics argue, deviates from the program’s intent to compensate insurers for covering sicker patients. The findings reignited concerns about potential regulatory overreach and financial penalties, contributing to the stock’s decline.

UnitedHealth has consistently denied wrongdoing, emphasizing compliance with Medicare requirements and strong audit performance. A company spokesperson stated that its programs “demonstrated sustained adherence to regulatory standards” and reiterated a commitment to lowering costs and improving care for beneficiaries. However, the report’s release coincided with ongoing civil and criminal investigations by the Justice Department, which the company disclosed in July. These overlapping probes have amplified investor uncertainty, as legal or reputational damage could lead to higher compliance costs or reduced reimbursement rates in the future.

The broader Medicare Advantage sector also faced downward pressure, with insurers like CVS Health (CVS), Humana (HUM), and Elevance Health (ELV) posting declines of 1.1% to 0.76%. The sector’s sensitivity to regulatory scrutiny was underscored by Senator Chuck Grassley’s public criticism of UnitedHealth’s practices, which he argued “hurts the Medicare Advantage program and the American taxpayer.” Grassley’s report, though not recommending formal action, signaled growing congressional skepticism toward risk adjustment methodologies. This environment raises the likelihood of stricter oversight, potentially curtailing profit margins for insurers reliant on Medicare Advantage growth.

In response to the report, UnitedHealth announced plans to reaffirm its 2025 adjusted earnings guidance during investor meetings on January 12, 2026. The company also highlighted two studies commissioned by Milliman, which claimed Medicare Advantage cost the federal government 9% less than traditional Medicare in 2025 and reduced out-of-pocket expenses for beneficiaries. However, these assertions may struggle to counter perceptions of aggressive revenue-seeking, particularly as the CMS V28 risk model phase-in is reported to have already reduced Medicare Advantage revenue by 4% compared to prior models.

The stock’s near-term trajectory will likely hinge on UnitedHealth’s ability to address regulatory concerns while maintaining its earnings momentum. With full-year 2025 results and 2026 guidance set for release on January 27, investors will scrutinize management’s strategy for navigating potential policy changes and audit risks. For now, the Senate report has underscored the fragility of a business model that relies heavily on federal reimbursements, leaving the stock vulnerable to further volatility until clarity emerges on the sector’s regulatory path.