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A bunch of blue chips that were supposed to be safe dropped hard. UNH is down over 50%, Nike, Intel, PayPal, Adobe, Netflix, and Salesforce all got hit too. I decided to look into one by one.
Starting with UNH because it's everywhere on this sub right now. Bulls say buy the dip on a healthcare monopoly, bears say the whole thing is falling apart. I went through the 10-Ks, all four quarterly earnings releases and calls from 2025, DOJ filings, CMS rate proposals, the Health Affairs transfer pricing study, the new PBM law, proxy statements, and insider trading records using Claude. Here's what I found.
# Transfer pricing
Most people haven't seen this one. Last November, researchers from Brown and UC Berkeley published a study in [Health Affairs](https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2025.00155) looking at 385,434 price transactions across 28 metro areas. They found UnitedHealthcare pays its own Optum doctors 17% more than outside doctors for the same work, and in markets where UHC has 25%+ share, that gap goes to 61%.
Why does this matter? UHC and Optum are the same company, and 60% of Optum's revenue comes from UHC. Under the ACA, insurers have to spend 80 to 85% of premiums on care, so UHC overpays Optum, books it as medical spending, and the money never actually leaves UnitedHealth Group. Everyone here argues about whether the 88.9% medical cost ratio means UNH is losing money on insurance. This study says maybe the opposite is true, and the money just moves between pockets.
# Other stuff I found
**Optum Health made $7.8B in 2024 and lost $278M in 2025**, an $8 billion swing in one year. The Optum CEO admitted the strategy "strayed from the initial intent," and they've cut 20% of the doctor network. Humana and Elevance had nothing close to this.
**DOJ is running criminal and civil investigations** into how UNH bills Medicare. FBI has talked to former employees, a whistleblower suit got unsealed, and the WSJ estimated potential overbilling at $8.7B over three years. Nothing was set aside in the books for any of this.
**CMS proposed a 0.09% Medicare Advantage rate increase for 2027** when Wall Street expected 4 to 6%. Medicare is UHC's biggest business at $171B in revenue, and they're already expecting to lose 1.3 to 1.4 million members in 2026.
**PBM reform was signed into law on February 3rd** with flat fees only, 100% rebate pass-through, and any pharmacy can join networks. Hits Optum Rx starting 2028.
**CEO Hemsley** was running his own investment fund called Cloverfields Capital while chairing UNH's board, putting money into companies that both work with and compete with UNH. He put $10M into an autism therapy company that does business with UNH and none of it showed up in proxy filings. There's also a lawsuit saying he sold $102M in stock before the DOJ news went public.
# Days claims payable
People here keep saying it went from 48 to 54, but I pulled the actual numbers. Year-end 2023 was 47.9, year-end 2024 was 47.0, and year-end 2025 was 44.1. It went down, not up. But going down means less cash earning interest, roughly $200 to 300M less per year, so something is going on with cash, just not what people think.
# Is it cheap or cheap for a reason?
The bull case makes sense. You can't replace UNH, it's at 16x earnings, V28 is ending, and they've been through rough patches before. But for it to work a lot needs to go right at once. CMS raises rates, DOJ settles cheap, Optum Health goes from losing money to making money, almost 3 million members leave without breaking anything, and transfer pricing stays something professors talk about rather than something regulators act on.
If all that happens, it's cheap. If a couple of those don't work out, the current price might not be the bottom.
Full version with quarterly trends, peer comparisons, and the accounting breakdown here: [Full Analysis](https://sarvesh8757.substack.com/p/before-you-buy-unh-actually-cheap)