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

Shares of Humana tumbled early Thursday after it said it was dealing with higher-than-expected care costs from its Medicare Advantage customers, forcing it to chop profit expectations.

The update from Humana arrived less than a week after UnitedHealth Group surprised Wall Street, saying that its 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.

Shares slumped 13% before the market opened, dragging down other insurers as well early Thursday.