What’s certain is that in April, CEO Andrew Witty delivered first-quarter results so alarming that the stock plunged, knocking 22% off the company’s share price within hours. Twenty-six days later, on May 13, the company sent out an early morning statement announcing Witty had resigned for unspecified personal reasons, and Stephen Hemsley, the board chairman and a previous CEO, would be CEO once more. The stock plunged again. The next day, the Wall Street Journal reported that the Department of Justice is investigating UHG for possible criminal Medicare fraud. The company said it hadn’t been notified of any such investigation, but the stock plunged yet again.

UHG, a colossal company had lost more than half its worth in less than a month—vaporizing $280 billion in market value. “This is a stock that every growth-oriented portfolio manager in the world owned for a decade and made money on it like clockwork,” says Whit Mayo, an analyst at Leerink Partners, a health care investment bank. “It’s stunning. It’s unthinkable.”

Now the great questions are: What on earth happened, and what does it mean? The answers are important because UHG is the biggest company in the biggest sector of the biggest economy in the world, and the U.S. health care system is widely regarded as broken.

Indeed, UHG’s status as a symbol of that system was made clear in December when the CEO of its insurance arm was murdered, allegedly by a man motivated by a conviction that big insurers put profit ahead of patients’ welfare.

Is UHG part of the problem or, as it has long declared, part of the solution? And either way, is its meltdown related to its status as hero, villain, or both?

Witty’s explanation of the awful quarter was not entirely convincing to Wall Street analysts when he spoke to them in April. But UHG’s financial statements made clear that there were problems in multiple branches of the empire.

Much of its trouble was in the company’s huge business selling Medicare Advantage health care insurance. The company assumed that beneficiaries would use health care in 2025 at about the same rate as they did in 2024, Witty said, but instead, their use “increased at twice that rate.” In the business logic of health insurance, that was bad news, because if patients use considerable health care, an insurance business earns less profit. Witty told analysts he couldn’t explain why beneficiaries used so much more health care. The analysts couldn’t, either, noting that other major insurers, such as Humana and Aetna, didn’t mention a similar spike.

Another problem was in UHG’s business delivering care to patients, for example at physician practices and ambulatory surgery centers that the company owns; UHG employs or has under contract about 10% of all the doctors in America. Unlike the company’s insurance business, this business loses profit when patients get less care than expected from UHG’s providers. In the first quarter, patients with non-UHG insurance used the company’s doctors less than anticipated; again, Witty couldn’t fully explain why.

Throughout the earnings session, Witty and other executives promised to do better: “We must and will work to better anticipate and address these factors.” “This is very addressable.” “No question, we need to execute better.”

But some analysts think fixing those problems won’t be as easy as just trying harder. “They’ve been completely incapable of forecasting their own business,” says Jared Holz, a health care analyst at Mizuho Group, who has followed UHG for 10 years. “All the miscues, not just this week but since 2023, suggests other key members of the management team should probably go.”

An important potential factor that could hurt UHG much more than other insurers in the future is a change at Medicare. The company is by far the largest seller of Medicare Advantage insurance policies, which include features that traditional Medicare doesn’t offer; for example, they include vision, hearing, and dental coverage, plus out-of-pocket limits.

For each insured person, Medicare pays the insurer a lump sum based on how sick the person is, based in turn on the insurer’s report of each person’s diseases and ­conditions.

Reporting those diseases and conditions to Medicare is called coding, and UHG is the champion coder. It reports more diseases and conditions than other insurers do and hence gets billions of dollars more from Medicare than other insurers do. (These coding practices have reportedly also attracted scrutiny from the DOJ.) Across all participating insurers, Medicare has been spending much more on coding than anticipated, so it’s changing the system in ways that will rein in payments overall. The new system, called V28, is being implemented over three years; last year was year two, which means the reductions are roughly two-thirds done. “To see things unravel this much,” says Mayo, “the only explanation is V28.”

UHG’s future is now solidly in the hands of Hemsley, who helped build the company into the behemoth it is today. He turns 73 in June. The announcement of his return included no language about being an interim CEO or serving until the board chose a successor. Far from it.

On the day Witty stepped down, the company filed a report with the Securities and Exchange Commission detailing Hemsley’s pay as CEO: a $1 million annual base salary and a one-time $60 million award of stock options “with cliff vesting after three years.” Beyond that, there would be “no additional annual equity awards during the first three years of Mr. Hemsley’s employment.”

The first three years? Whatever Hemsley’s plans may be, the world is unlikely to hear them much in advance. He is notoriously taciturn; company lore holds that he granted two media interviews in his 11 years as CEO.

Maybe it’s all for the best. After these past miserable months, “the core issue all comes down to trust,” says Mayo. The only way Hemsley can win back UHG’s trust with investors, customers, and employees is to let performance do the talking.

This article appears in the June/July 2025 issue of Fortune with the headline “UnitedHealth faces a reckoning after $280 billion meltdown.”