Late-year medical costs spike forces Humana to scale back profit expectations for 2023

abcnews.go.com:

Shares of Humana are tumbling after the health insurer said it was still dealing with higher-than-expected care costs from its Medicare Advantage customers and it chopped earnings expectations

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 UnitedHealth Group surprised Wall Street, saying that its overall medical costs had soared 16% in its most recent quarter.

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 $26.09 per share.

That falls more than $2 below what it predicted in November. Wall Street forecasts $28.29 per share, according to the data firm FactSet.

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 Jan. 25 from Feb. 5.

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,