In 2025, the S&P 500 recorded its third consecutive annual gain, but UnitedHealth Group (UNH), one of the leading companies in the U.S. market, missed out on the rally. As the largest health insurer in the United States, the company faced multiple challenges over the past year, including the unexpected departure of its CEO and an investigation into its Medicare billing practices. Additionally, its earnings were affected by underestimating rising medical costs and increased patient service utilization. These adverse factors collectively dampened market demand for the stock, resulting in a 34% decline in its share price by the end of the year.
However, this healthcare giant did not respond passively. Instead, it actively took measures to address the issues and strive for performance improvement. Among the various challenges, the most notable was the U.S. investigation into its Medicare billing practices. Recent reports indicated that a Senate report highlighted UnitedHealth’s aggressive tactics to increase Medicare payments. While the company did not directly comment on the report, it has taken several actions in recent months to address the unfavorable situation.
At the same time, UnitedHealth has taken steps to enhance profitability by exiting certain Medicare plans, adjusting benefits, initiating repricing, and increasing the use of artificial intelligence to streamline operations. These measures helped the company achieve 12% revenue growth in the latest quarter and raise its full-year earnings per share guidance to $14.90. Despite expectations of continued headwinds this year, such as government cuts to Medicare budgets, the company aims to achieve solid earnings growth in 2026 and projects sustainable double-digit growth starting in 2027.
So, considering the current circumstances, is UnitedHealth Group’s stock worth buying in January? The company’s challenges may not disappear quickly, especially as the government’s investigation into its billing practices is still ongoing, which could pressure the stock price and lead some investors to perceive it as high-risk. The path to earnings improvement may also not be entirely smooth, but the actions taken and progress made so far are encouraging. When evaluating UnitedHealth or any stock, adopting a long-term perspective is particularly important. Despite the current challenges, the company has established a strong competitive advantage and moat through its industry leadership and its two core business segments—UnitedHealthcare and Optum—which are difficult for competitors to easily undermine.
Therefore, for investors who can tolerate short-term uncertainties, UnitedHealth Group may be a potential recovery stock worth watching in January and holding for the long term. Its future developments deserve close attention.
