Insurance automation company Health in Tech Inc. plummeted Wednesday on fears that the White House may eliminate half a trillion dollars in annual healthcare spending.
The stock tumbled 82.31% to $1.32, marking the company's first major setback on the Nasdaq since going public in December 2024.
Wednesday’s selloff came on the same day the White House claimed that $521 billion in annual entitlements fraud stems mostly from Medicare and Medicaid claims.
Yet, in the same statement, the administration promised it would not cut the programs.
“What kind of person doesn’t support eliminating waste, fraud, and abuse in government spending that ultimately costs taxpayers more?” the White House said.
A reduction in federal healthcare spending could hit health insurers’ bottom lines, dampening their willingness to invest in Health in Tech's products.
Still, big insurance firms didn’t experience the same market shock as Health in Tech, as their businesses are more established and diversified.
Meanwhile, Health in Tech has remained silent, with no public announcements or SEC filings this week. The company plans to disclose its 2024 financial results on Monday.
Government shutdown looms
Friday’s looming federal government shutdown could weigh on Health in Tech investors as regulatory uncertainty grows. As healthcare regulations remain in flux, insurance companies may hesitate to invest in new products.
Three Republican lawmakers told Wired that Elon Musk has been pushing for a shutdown to more efficiently lay off federal employees.
Medicare and Medicaid would still receive funding during a shutdown, but insurance giant Marsh warned that disruptions could still impact health programs.
“With the federal government being the largest purchaser of healthcare services, worker absenteeism could lead to shutdowns and delays if the situation drags on,” Marsh wrote in a report.
Credit ratings agency AM Best also warned that insurers could take a hit from a shutdown, citing reduced funding for disaster relief and workers' compensation.
FTC crackdown shakes insurers
Insurers UnitedHealth Group (UNH), Humana (HUM), and Molina (MOH) all fell Wednesday, though their declines remained in the single digits.
The drops came after a warning from Trump's new Federal Trade Commission (FTC) chair, Andrew Ferguson, that he wouldn’t go soft on big health insurers.
Speaking at Yale University’s CEO Caucus in Washington, Ferguson made his stance clear: "If we think conduct or a merger is going to hurt Americans economically, I'm taking you to court."
While Ferguson noted that he isn’t against every acquisition, his tough stance on industry consolidation could be more troubling for Health in Tech Inc. than for larger, more established players—especially as the company seeks new investments.
Your email address will not be published. Required fields are markedmarked