Humana has lowered its 2023 profit outlook due to higher-than-expected medical costs in last year's fourth quarter.
In a Thursday filing with the Securities and Exchange Commission, the company said it expects to report annual earnings of $20 per share. Its previous guidance called for full-year earnings per share of "at least" $26.31 per share.
Shares of Humana slumped in early trading but rallied slightly, closing down 8%.
Related article: Medicare Advantage utilization spike hits Humana, UnitedHealth
The Louisville, Kentucky-based insurer said it expected the high Medicare Advantage healthcare utilization trends seen in the third quarter to continue through the end of last year. However, during the fourth quarter it recorded higher costs due to a rise in Medicare Advantage inpatient care as well as physician, outpatient surgery and supplemental benefit claims, Humana said in the regulatory filing.
The company said it anticipates its adjusted insurance segment benefit ratio to be roughly 91.4%, versus a previous estimate of 89.5%, for the fourth quarter, and about 88%, versus 87.5%, for all of 2023.
Humana’s Medicare Advantage outlook has changed too. The company said it expects 100,000 new Medicare Advantage members by the end of 2024, based on annual election period results—representing growth of 1.8% from last year. It previously said membership growth would be "at or slightly above industry average growth."
