The Deadly Business of Health Insurance

Shareholders blame UnitedHealth for its CEO’s murder

On Wednesday, a lawsuit was filed in New York that could easily be described as crazy.

It involves the murder of Brian Thompson, the 50-year-old CEO of UnitedHealthcare, a company that is part of UnitedHealthcare Group – an insurance conglomerate worth more than half-a-trillion dollars. Thompson was gunned down early in the morning of December 4, 2024, as he hurried along a Manhattan sidewalk on his way to his company’s investor convention. The alleged murderer, Luigi Mangione, was arrested five days later, a handwritten manifesto lambasting the U.S. healthcare system in his backpack.

Public reaction to the tragedy was startling and sometimes cruel. Jokes turning on UnitedHealth’s penchant for denying insurance claims flew across the internet. “I’m sorry, prior authorization is required for thoughts and prayers,” wrote someone on TikTok. “Does he have a history of shootings? Denied coverage,” read another post. Rather than condemned as an cold-blooded killer, Mangione, who has pleaded not guilty, was praised as a sort of hero for our time – a crusader against the ruthless practices of the health-insurance industry.

That someone would sue over the incident isn’t surprising. You could imagine it being, say, members of Thompson’s family, arguing that the company failed to protect him, or the company itself, claiming damages from the wrongful death of its CEO. What is surprising, crazy even, about Wednesday’s suit is that the someone who ended up filing it is a UnitedHealth shareholder, Roberto Faller.

Faller’s argument boils down this. During Thompson’s three years as CEO, UnitedHealth’s annual profits rose from $12 billion to $16 billion, in large part, Faller contends, because the insurer denied so many claims. Yet UnitedHealth knew that this claims policy was so callous that it would eventually trigger a public backlash. When that backlash came in the form of the assassination of its CEO, the company knew that it would have to change the policy, even at the risk of lowering profits.

But UnitedHealth didn’t tell investors that. Instead, it assured them its profits would remain high. This, claims Faller, was a lie: In April 2025, after UnitedHealth supposedly started to approve more claims, it was forced to lower its profit outlook, causing its stock price to plummet – and investors to lose millions of dollars.

Faller sued on behalf of himself and all others who owned UnitedHealth stock between December 3, 2024 – the day before Thompson was shot – and April 16, 2025, the day the company lowered its outlook. The contention is that the company committed securities fraud during that period by not disclosing that Thompson’s murder prompted it to change its claims policy, which caused its stock price to lose almost a quarter of its value.

In one sense, this is pretty standard stuff. A company fails to tell shareholders something important about its business, the shareholders eventually find out, they sell their stock, and the share price tumbles. The shareholders then sue the company, claiming that not telling them about the important thing is securities fraud.

But there are at least a couple of problems with Faller’s suit. First, it’s not really what the laws against securities fraud are for. They were designed to punish lies about some significant financial development – a company auditor caught cooking the books, say, or the loss of a huge customer – not the failure to warn about some unforeseen mishap.

Those traditional sorts of suits were remarkably effective. Incidents of companies redoing their financial statements – so-called restatements – generally dropped after about 2006, leaving the lawyers representing shareholder suits casting about for new business. An adventurous few started claiming that calamities like plane crashes or fires were known risks that companies should have disclosed. Most of the cases flopped.

In 2011, though, the U.S. Supreme Court cut the lawyers some slack. In a case involving Matrixx Initiatives, the justices ruled that the drugmaker should have warned investors about a statistically insignificant number of people who claimed that they lost their sense of smell after using the company’s nose spray. In legal terms, the decision expanded the definition of a risk important enough to disclose to shareholders.

The floodgates opened for these so-called “event driven” securities fraud lawsuits. BP, for example, was sued for concealing the allegedly known risk that its Deepwater Horizon drilling rig would explode. Arconic was sued for not telling shareholders that the aluminum cladding it supplied to London’s Grenfell Tower might contribute to a fire at the skyscraper and cause the company’s stock to drop. Now UnitedHealth has been sued over its CEO’s murder.

This raises the second problem with the case. Even if you think event-driven securities lawsuits are A-OK, how can you credibly argue that the company should have known that its policies were so bad that they could – and did – lead to murder? Sure, plenty of internet missives and news stories made the connection, but that doesn’t mean it was valid or that the company believed it was valid. You can imagine UnitedHealth honchos seeing the months of lousy press and figuring their company’s stock price would tank if they didn’t change course, and then not telling shareholders about the change soon enough. Maybe that’s a decent lawsuit, but it’s not the one Faller filed.

The next move is up to the judge. Odds are UnitedHealth will ask him to dismiss the case, and he will agree. But it’s not impossible that the judge will see enough in the facts to let the case play out.

Think about the state of healthcare coverage in this country and how the public perceives UnitedHealth. After Thompson’s murder, his wife told NBC News that he had been receiving threats. In Minnesota, protestors had been appearing regularly at the company’s headquarters. Some were arrested, others showed up later to confront the parent company’s CEO at a Senate hearing in May 2024. Their umbrella group, People’s Action, issued a statement after the shooting that said, “We know there is a crisis of gun violence in America. There is also a crisis of denials of care by private health insurance corporations including UnitedHealth.”

UnitedHealth’s rate of denying claims has been double the industry average – higher than that of any other private insurer. The shooter – allegedly Mangione – left shell casings at the scene with the words “deny” and “delay” on them, perhaps a reference to the 2010 book, “Delay, Deny, Defend: Why Insurance Companies Don’t Pay Claims and What You Can Do About It.”

The company covers almost one-third of patients in Medicare Advantage, the government program in which private insurers get a fixed fee for each patient and make money by holding down the costs of treatment. While participating in the program, UnitedHealth and other insurers have been accused by the feds and patients of overbilling Medicare and fighting in court to avoid returning the overpayment. UnitedHealth has also been sued for using algorithms with 90 percent error rates to deny coverage and suspected of a host of other egregious acts that have convinced millions of Americans that the company is in business less to cover the costs of medical care than to find ways to block it. To many of these people, this sort of indifference to human life is its own form of violence.

Looked at from that point of view, it may seem incredible that UnitedHealth would not have known that its policies were so bad that they could lead to violence, if not murder. Making that argument in court is still a stretch, and doing it in the context of a securities-fraud case is surely awkward. But crazy? Maybe not.