Michael Burry doesn't do consensus trades. The guy who famously shorted subprime mortgages before the 2008 crash has built a career on being right when everyone else is wrong. So when health insurers were getting hammered by rising medical costs and regulatory headwinds in late 2025, naturally he went shopping.

In the third quarter, Burry made a bold rotation: he completely exited his position in UnitedHealth Group Inc. (UNH) and loaded up on Molina Healthcare, Inc. (MOH) instead. Then he took to Substack to explain why Molina was a "generational buy," even comparing it to Warren Buffett's transformational early investment in Geico.

That's quite the claim. And then the market gave him a stress test.

The Day Everything Went Wrong (Or Did It?)

Tuesday delivered a gut punch to health insurers. The Centers for Medicare & Medicaid Services proposed shockingly low 2027 Medicare rates, and the sector imploded. UnitedHealth cratered 19%. Humana, Inc. (HUM) lost 21%. And Molina? It dropped 8%.

Now, an 8% decline is nobody's idea of fun. But when you're down 8% and your peers are down double that, you're suddenly the smartest person in a very bad room. Which raises the question: did Burry nail this, or did he just get lucky with his timing?

The Medicaid Advantage

Burry's thesis is actually pretty straightforward. While giants like UnitedHealth and Humana are heavily exposed to Medicare Advantage plans—the very programs getting squeezed by CMS rate cuts—Molina plays a different game entirely.

Roughly 75% of Molina's revenue comes from Medicaid, not Medicare. These are government programs for low-income Americans, and while they're notoriously difficult to profit from, Molina has figured it out. Burry argues the company maintains disciplined operations and "conservative accounting," allowing it to stay profitable in a niche where competitors are losing money hand over fist.

It's the insurance equivalent of running a profitable bodega while everyone else is trying to compete with Whole Foods and bleeding cash.

So Was He Right?

The early scoreboard looks pretty good for Burry:

Prescient Timing: He dumped UnitedHealth before Tuesday's 20% bloodbath. Meanwhile, his Molina position only took an 8% hit on the same news.

The Burry Effect: After news of his position broke, Molina stock surged above its 100-day moving average and ripped through a seven-day winning streak in early January, climbing over 13%.

Takeover Dreams: Burry has also floated the idea that Molina is a prime acquisition target. In his characteristically colorful style, he said if he were "sitting on enough billions," he'd buy the whole company outright. He even suggested Molina has a clearer path to long-term growth than tech giants like Apple.

When the sector got tested, Molina held up significantly better than UnitedHealth, CVS Health Corp. (CVS), and Humana. That's not definitive proof the thesis works, but it's a decent start.

Early returns for 2026 suggest that Burry—once again—might be laughing last.