UnitedHealth Shares Plunge, Travel Earnings, Musk to Audit the Fed? 2/21/25

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David Faber (0:59)

Market insight and analysis. You're listening to the opening bell of CNBC's Squawk on the Street.

Carl Quintanilla (1:05)

Good Friday morning. Welcome to Squawk on the Street. I'm Carl Quintanilla with Jim Cramer. We're post night of the New York Stock Exchange. David Faber live at the FII Priority Summit down in Miami. Futures are mixed. The Dow is set to get pinched on this report regarding UNH, which we will get to. Overall, S&P is trying to eke out a positive week. We'll get some PMIs and U-Mish within the hour. Our roadmap begins with the DOJ investigating UnitedHealth's Medicare billing practices. Shares are tumbling pre-market and dragging the Dow down with it.

SPEAKER_5 (1:33)

Plus, call it Musk vs.

Carl Quintanilla (1:34)

the Fed, the Doge Chief, saying he's considering auditing the Central Bank and Coinbase rallying after saying the SEC is set to end its enforcement case. But let's get right to UNH. Shares are down on this journal story that the DOJ is investigating the company over their Medicare billing practices. Jim and Joe is just going through the math on what this does to the Dow futures.

Jim Cramer (1:56)

Well, look, I'll go the math of what it does to UnitedHealth. This is going to be one of those wrong battles. The government may win, may not. Stocks down as if, all the stocks are down as if this is the government really cracking down on them. I hate to say it because I think that there are a lot of people who feel that they, Medicare billing practices, if you're reading the article, are wrong. Carl, these companies are survivors and you buy this.

Carl Quintanilla (2:22)

You buy it here.

Jim Cramer (2:23)

Oh yeah, you buy it because United Health is very powerful. I've often felt that United Health has ever been as powerful as the government because they are strong, sprawling and ready to fight and the government has historically not been able to take on this group. They haven't been able to take on the middlemen either. Look, I mean, we have strong corporations in our country and United Health is not going to have to... In the end, I am telling you that I do not think this is going to be significant to their earnings. That's what I'm saying.

Carl Quintanilla (2:53)

David, one question will be whether Jim is right from a legal standpoint or a political standpoint given some of the wins that have shifted regarding some of these names.

David Faber (3:04)

Yeah, I mean, this is this is fascinating and, you know, obviously UNH and any number of the other insurers have been sort of in focus in part. Obviously, we all remember the tragic murder of United Health Care's CEO not that long ago. But of course, it did sort of increase the overall discussion around medical care in the country, what is covered and what isn't. It's important to point out here, there's sort of two different lines of criticism, so to speak. There was the great Wall Street Journal stories, right? Really good reporting from not that long ago, as you guys remember. Jim, I remember we were talking about it, where they were talking about essentially having these doctors diagnosed at far higher levels in terms of what the procedure might, what paid back for by Medicare Advantage. That's different than the whole other argument about what they cover or don't cover and how they fail to cover what many believe are necessary medical procedures.

Jim Cramer (4:01)

Yeah, look, I mean, again, I come back, why do we have higher payments for Medicare Advantage? I mean, this stuff is so opaque.

These companies have had a lot of scrutiny against them. You're going to need legislation. I don't think you're going to be able to do anything with the Justice Department, Civil Fraud Division, by the way. Right. You have the legislation, then there's an issue. But when you have these lawsuits, it tends not to bring about any sort of practice. Look, I'm not being cynical. I know that there are people out there who just say, how can you not think that this is going to break up everything? Well, I mean, think about the history of the government winning against these big companies that don't. I am saying that down 12 percent, you're buying it, Elton. We'll have portfolio managers come on within the next six days, and there'll be a huge number of people who bought them. Because, well, it's been these long lawsuits. So I'm just saying, get ahead of it right now.