Apr 9, 2026
Last August, Warren Buffett’s Berkshire Hathaway (NYSE:BRK.B) announced (1) that it made the intriguing purchase of 5.04 million shares in troubled insurer UnitedHealth Group. Investor confidence in the company has wavered in the months since, but things could be turning around.
On Tuesday, shares of UnitedHealth Group jumped more than 11% at one point and closed up a little more than 9%. The rally followed news that the Centers for Medicare & Medicaid Services (CMS) finalized (2) its 2027 Medicare Advantage (MA) rate update, showing a net average year-over-year increase of 2.48% in MA plan payments in 2026. That amounts to a $13 billion increase, far higher than the previous estimate of 0.09%, or $700 million.
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A jump like that might seem like a reason to pop the champagne at the company’s Omaha, Nebraska headquarters, but any cheers tied to this investment are likely muted. Despite the April 7 spike, Berkshire Hathaway’s stake is worth roughly the same as it was when Buffett first invested $1.6 billion.
That’s because, despite an initial 6% bump when Berkshire revealed its stake, UnitedHealth shares have fallen this year on modest earnings (3) and soft guidance for 2026. The company has also seen CEO Andrew Witty depart for what were described as personal reasons and has become one of the biggest targets of public frustration with insurers.
Investing in a ‘tapeworm’
UnitedHealth was a surprising pick for Buffett, who has long criticized the U.S. health care system for some time due to high costs. In 2018, he famously said (4) “the ballooning costs of healthcare act as a hungry tapeworm on the American economy.”
In an attempt to rectify that, Berkshire Hathaway partnered with Amazon and JPMorgan Chase to launch Haven, an independent company meant to cut healthcare costs and look for technology solutions to simplify the system.
“Our group does not come to this problem with answers,” Buffett said at the time. “But we also do not accept it as inevitable. Rather, we share the belief that putting our collective resources behind the country’s best talent can, in time, check the rise in health costs while concurrently enhancing patient satisfaction and outcomes.”
Things didn’t go as planned. The venture disbanded (5) three years later.
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Following core values
Investors might be skeptical of UnitedHealth, but analysts have remained bullish on the stock.
Last week, Raymond James upgraded (6) the company from “market perform” to “outperform” and raised the price target to $330. Overall, more than three-quarters (7) of the analysts who rate the company have it as a “buy” or better.
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Bank of America raised (8) its price target on April 7 from $315 to $337 while Bernstein raised (9) its from $405 to $411.
For Berkshire Hathaway, the UnitedHealth Group investment is another example of Buffett following the investment strategies he has discussed many times before: Look for bargains.
“Whether we’re talking about stocks or socks, I like buying quality merchandise when it is marked down,” Buffett is quoted as saying (10).
UnitedHealth stood well off its 52-week high (11) of $606 both on April 7 and when Berkshire Hathaway bought shares in it last August. It’s still the market leader with sound fundamentals, which makes for an interesting investment by Buffett’s playbook.
“You don’t need to be an expert in order to achieve satisfactory investment returns,” he has said. “Keep things simple and don’t swing for the fences. When promised quick profits, respond with a quick ‘no.’”
Article Sources
We rely only on vetted sources and credible third-party reporting. For details, see our editorial ethics and guidelines.
CNBC (1); Centers for Medicare & Medicaid Services (2); UnitedHealth Group (3); CNBC (4); CNBC (5); Yahoo Finance (6); ChartMill (7); Yahoo Finance (8); Investing.com (9); Yahoo Finance (10); Google Finance (11)
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Chris Morris is a veteran journalist with more than 35 years of experience, the majority of which were spent with some of the Internet’s biggest sites, including CNNMoney.com, where he was director of content development, and Yahoo! Finance, where he was managing editor. His work has also appeared on Fortune, Fast Company, Inc., CNBC.com, AARP, Nasdaq.com, and Voice of America, as well as dozens of other national publications.
