Buffett's Contrarian UnitedHealth Bet Incurs $267 Million Paper Loss

Edgen Stock

·Mar 29 2026, 17:20

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Key Takeaways

Berkshire Hathaway's 2025 investment in UnitedHealth is now underwater, showing a significant unrealized loss as the insurer's stock continues to slide. The decline is driven by a combination of soaring medical costs that have squeezed profitability, a U.S. Justice Department criminal probe, and a series of missed earnings targets that have eroded investor confidence.

Berkshire Hathaway's position in UnitedHealth (UNH) now reflects an unrealized loss of $267 million, with the stock falling 17% to $259 from its June 30, 2025 closing price of $311.
UnitedHealth's troubles stem from its medical care ratio surging to nearly 89%, driven by higher post-pandemic care utilization and elevated expenses in its Medicare Advantage business.
The health insurer also faces a U.S. Justice Department criminal investigation into its Medicare billing practices, which has added significant regulatory pressure.

Berkshire's $1.57B Stake Declines 17% From 2025 Levels

Warren Buffett's contrarian bet on UnitedHealth (NYSE: UNH) is facing significant headwinds, with Berkshire Hathaway's position showing an unrealized loss of approximately $267 million as of March 29, 2026. The conglomerate acquired 5,039,564 shares in the second quarter of 2025, a stake valued at $1.57 billion at the time of its disclosure. Since the end of that quarter, when UNH stock closed at $311, the price has collapsed by about 17% to $259, pushing the investment into the red.

Berkshire made the purchase between April and June 2025, a period when UnitedHealth was already under severe pressure and trading far below its 2024 peak of over $600 per share. The move marked Berkshire's first major investment in the insurer since selling a previous stake in 2010.

Soaring Costs and Federal Probe Hammer UNH Stock

The stock's poor performance is rooted in severe operational and regulatory challenges that intensified through 2025. UnitedHealth’s medical care ratio—a critical measure of costs as a percentage of premiums—surged from the mid-80% range to nearly 89%. This spike was caused by higher-than-expected utilization of deferred post-pandemic care and escalating expenses within its core Medicare Advantage business.

These financial strains forced the company to repeatedly slash its 2025 earnings guidance before suspending its forecast entirely in May of that year. Compounding the issue, the U.S. Department of Justice opened a criminal investigation into the company's Medicare billing practices. The combination of soaring costs, regulatory scrutiny, and management turnover erased more than a third of UnitedHealth's market value in 2025, creating the challenging environment that persists today.