UnitedHealth Group’s stock sank 20% on Thursday after the company slashed its annual profit forecast, citing higher-than-expected medical costs in its privately run Medicare plans. Those bleak results from a health-care giant seen as the insurance industry’s bellwether could be a warning sign for other companies with so-called Medicare Advantage plans, according to some Wall Street analysts. It comes after a turbulent 2024 for health insurers, hurt by lower government payments, soaring medical costs and public backlash after the murder of UnitedHealthcare’s top executive, Brian Thompson. UnitedHealthcare, the insurance arm of UnitedHealth Group, is the nation’s largest provider of those plans. Shares of competitor Humana fell 5%, while Elevance Health dropped more than 1% and CVS tumbled 2%. Cigna has no Medicare Advantage business. Its stock was up almost 1% on Thursday. UnitedHealth’s first-quarter results reveal “ominous signs” of accelerating medical costs in Medicare Advantage businesses, TD Cowen analyst Ryan Langston said in a note Thursday. He added that the company “correctly foreshadowed” increasing medical costs back in 2023, so Thursday’s comments “will call into question” the full-year outlooks for every insurer. Higher medical costs have dogged the entire insurance industry over the past year as more seniors return to hospitals to undergo procedures they had delayed during the Covid-19 pandemic, such as joint and hip replacements. But the issue had previously not been as significant at UnitedHealthcare...Read more