UnitedHealth Group CEO David Wichmann warned investors on Tuesday that “Medicare for All” proposals pushed by Democratic lawmakers and presidential candidates would “destabilize the nation’s health system.”
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A number of Democratic proposals call for eliminating private health insurance, and replacing it with a universal Medicare plan, claiming that it would help reduce administrative inefficiencies in the health-care system. Most recently, Vermont Sen. Bernie Sanders unveiled a new bill that would create a government-run system to provide health insurance for all Americans. Freshman Rep. Alexandria Ocasio-Cortez, who has a similar cult following among her supporters, is pushing a similar plan.
But Wichmann, who rarely discusses politics, told investors on a post-earnings conference call Tuesday the measures being discussed would “surely jeopardize the relationship people have with their doctors, destabilize the nation’s health system and limit the ability of clinicians to practice medicine at their best.”
“And the inherent cost burden would surely have a severe impact on the economy and jobs – all without fundamentally increasing access to care,” he added.
The executive noted that health-care costs have grown less quickly than overall inflation for 16-straight months, saying “it has lessened considerably due to better management of price inflation and earlier and more effective management of care in lower cost settings.”
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Despite concerns from UnitedHealth, public support for a single-payer system has grown. According to a survey from the Kaiser Family Foundation last month, 56% of the people surveyed support a national health plan in which all Americans would get insurance from a single government plan, versus 39% who said they oppose it.
Health care has been the worst-performing sector in the stock market so far this year, rising by just 4.17% as of Monday’s close, significantly lagging the broader market indices. The Dow Jones Industrial Average is up 13.35% over the same time period, and the S&P 500 is 16.12% higher.
The biggest decliners have been from insurers, which are under threat from “Medicare for All” proposals. Investors are also watching the Trump administration’s legal challenge to former President Barack Obama‘s signature health insurance law, the Affordable Care Act.
A federal appeals court in New Orleans said last week that it will hear arguments in July on a lawsuit backed by President Donald Trump to overturn Obamacare. Dismantling the health-care law would lead to 32 million more uninsured people in the U.S. by 2026, according to an estimate from the Congressional Budget Office.
Earlier Tuesday, UnitedHealth reported first-quarter earnings and revenue that beat Wall Street’s expectations. It was drive by strength in its pharmacy benefit management business and higher enrollment for its health plans.
The industry bellwether, which is the first health insurer to report quarterly results, also raised its full-year adjusted earnings forecast to between $14.50 and $14.75 per share from its prior view of $14.40 to $14.70 a share.
— CNBC’s Bertha Coombs contributed to this report.