Shares of Humana tumbled Thursday after the health insurer said it was dealing with higher-than-expected costs from its Medicare Advantage customers, forcing it to chop profit expectations.
The update from Humana arrived less than a week after rival
Humana said its Medicare Advantage patients used more inpatient care than it expected in November and December. The health insurer also saw more growth in care that doesn’t involve a hospital stay, like doctor visits and outpatient surgeries.
Humana said it now expects adjusted earnings for last year to total about
That falls more than
Humana has yet to lay out its forecast for 2024.
The company said Thursday that its still trying to figure out the impact current trends will have on its outlook, but it plans to provide an update soon. It moved up its report on the fourth quarter to
Humana is one of the nation’s largest providers of Medicare Advantage plans, which are privately run versions of the federal government’s Medicare program mostly for people age 65 and older. Medicare Advantage plans are one of Humana’s biggest forms of coverage outside insurance it provides for military families and retirees.
Insurers dealt with higher-than-expected costs from Medicare Advantage patients through most of last year, partly because people continued to return to surgery centers and doctor offices after shying away during the COVID-19 pandemic.
For the new year, Humana also said it now expects less than 2% enrollment growth from its Medicare Advantage business, which covered about 5.4 million people at the end of last year.
These plans finished their annual enrollment period last month, a window at the end of year when people can switch plans or buy new coverage.
Humana said it was prudent when it set 2024 prices for its Medicare Advantage coverage, and its pricing approach “resulted in a lower share of overall industry growth.”
Shares of
The stock is more than a year removed from an all-time high price of more than
Shares of
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