Humana (NYSE:HUM) shares faltered Thursday, after warning that a spike in demand for medical services and patient care would lead to higher-than-expected medical costs in the fourth quarter and could hit its 2024 forecast, sending its shares plunging 12% before the bell.
Health insurers have been flagging higher medical costs due to a rebound in non-urgent surgeries that were otherwise delayed during the pandemic.
Humana said it was experiencing a further increase in outpatient surgeries and its fourth-quarter results would reflect higher-than-anticipated inpatient procedures and services, primarily for November and December.
Its comments also dragged down the shares of other health insurers, including UnitedHealth (NYSE:UNH), CVS (NYSE:CVE), Elevance Health (NYSE:ELV), which fell between 2% and 5% in premarket trade.
Last week, larger peer UnitedHealth reported higher-than-expected medical costs for the fourth quarter as older Americans sought respiratory syncytial virus vaccines and received additional medical services towards the end of the year.
UnitedHealth also flagged that as COVID-19 cases rose around the holidays, while hospitalizations and spending on each patient increased beyond typical rates.
Humana expects the medical benefit ratio in its insurance segment at 91.4% in the fourth quarter, versus 89.5% forecast previously. The medical benefit ratio refers to the percentage of premiums spent by an insurer on medical care.
HUM shares sank $53.58, or 12%, to $394.18.
