Humana Stock Plunges Amid Rising Medicare Costs

The health insurance provider cuts its 2023 earnings estimate as efforts to reduce costs fall short.

Humana Inc. has warned that higher-than-expected medical costs for Medicare Advantage patients will negatively impact its full-year profit, leading to a more than 10% drop in its stock.
The health insurance provider has cut its 2023 earnings per share estimate to $26.09, falling short of analysts' estimates.
Humana's efforts to reduce administrative expenses were not enough to offset the rising medical costs.
Higher-than-expected in-patient use and rising non-patient expenses, predominantly in the categories of physician, outpatient surgeries, and supplemental benefits, have led to an increase in Medicare Advantage cost trends.
Humana's enrollment gains have trailed the growth of the industry, with the company now expecting Medicare Advantage growth of 100,000 members in 2024, representing 1.8% growth.