When Michael Burry starts buying call options on a stock that has fallen 50 per cent from its highs, experienced investors take notice. Still, when Donald Trump’s portfolio simultaneously shows purchases of bonds from the same company, the coincidence becomes harder to ignore.

UnitedHealth Group has attracted both men’s attention just as America’s largest health insurer faces its worst crisis in decades. The stock has collapsed from over $600 to around $300 this year as medical costs surge faster than premium increases, forcing the company to slash profit forecasts and pull earnings guidance entirely.

Trump’s latest portfolio disclosure reveals purchases of UnitedHealth bonds paying 4.5 per cent interest. At the same time, Burry’s Scion Asset Management holds call options on 350,000 shares, timing that suggests both men see something Wall Street is missing about the fundamental transformation coming to American healthcare.

Project 2025’s agenda includes making Medicare Advantage the default enrollment option for new beneficiaries. This seemingly technical change would funnel millions of seniors into private insurance plans without requiring them to actively choose privatisation, amounting to the most significant single privatisation of a US entitlement programme by default rather than by debate.

UnitedHealth’s Medicare Advantage business already generates $100bn annually. Still, making private plans the default could double that figure over time as the 10,000 Americans who turn 65 daily would automatically enroll in Medicare Advantage rather than traditional government-run Medicare.

Market positioning gives UnitedHealth significant advantages in capturing this windfall, as the company controls 28 per cent of the Medicare Advantage market and has spent decades building the infrastructure needed to manage Medicare patients at scale through its Optum division, which owns more physician practices than any other company in America.

Federal overpayments make the economics particularly attractive. The Medicare Payment Advisory Commission estimates that the government pays Medicare Advantage plans roughly 20 percent more per beneficiary than traditional Medicare would cost, creating an $84bn annual overpayment across all private plans. UnitedHealth captures the most significant share due to its market dominance.

Trump’s decision to buy bonds rather than stock reduces political exposure while still allowing him to profit if UnitedHealth thrives under his policies. The 4.5 percent interest rate offers decent returns in today’s low-rate environment while maintaining distance from accusations of self-dealing.

Burry’s use of call options suggests conviction in a sharp rebound rather than a slow grind higher, positioning him for substantial returns if UnitedHealth returns to previous highs around $600 per share.

Market consolidation during this crisis may actually strengthen UnitedHealth’s competitive position. Several regional insurers have announced plans to exit Medicare Advantage entirely due to rising medical costs, leaving UnitedHealth and a few large players to divide their former customers while benefiting disproportionately from vertical integration through Optum, which provides cost advantages pure insurance companies cannot match.

Medical cost increases likely represent temporary adjustments as healthcare utilization returns to normal after pandemic disruptions. Insurance companies have historically been able to adjust premium rates to account for higher costs after a one to two-year lag. However, the permanent revenue opportunity from Medicare privatisation dwarfs these temporary problems since earning 5 percent on $200bn generates more profit than earning 8 percent on $100bn.

Contrarian investing has built both Trump's and Burry’s reputations by profiting from market inefficiencies. UnitedHealth currently trades at its lowest valuation in five years despite its dominant market position and structural tailwinds from healthcare privatisation. Its timing suggests it expects recovery within 12 to 18 months as the company adjusts rates and benefits from increased Medicare Advantage enrollment.

Whether UnitedHealth’s slump represents a buying opportunity or the start of something darker will depend less on medical costs than on politics, but for now, both Trump and Burry are wagering that the future of American healthcare will be privatised by default.