The medium-term future of UnitedHealth won't be dictated by management; it's in the hands of politicians in Washington. And there are a lot of politicians who aren't very fond of UnitedHealth, Humana, Cigna, Aetna
Sure, a single-payer system that puts insurers completely out of business is completely off the table, and a competing public plan seems unlikely at this point, but there's still plenty for investors to worry about. My biggest fear for insurers is that the government will require them to take in sick people without a strong enough incentive for healthy people to get insured as well. That could lead to skyrocketing insurance premiums -- someone has to pay for the sick people -- which wouldn't exactly help insurers' image, and could price some of their customers out of the market.
Just like Bank of America
That doesn't sound like investing to me.
Even if you assume there'll be a giant stalemate, and we'll see business as usual, UnitedHealth may not be a bargain, even though it's trading at just 8.2 times this year's expected earnings. A quick turnaround doesn't look imminent; the company expects earnings to drop next year to $2.90-$3.10 per share, from around $3.15 per share this year.
That doesn't sound like a growth industry to me.