Humana still doesn’t know why more people were admitted for short hospital stays than it expected late last year, and that is casting a shadow over health insurers early in 2024.
Shares of several companies sank again Thursday after Humana debuted an earnings forecast for the new year that fell about
Health insurers typically see a rise in claims toward the end of each year as flu cases climb and people schedule surgeries before their coverage deductibles renew in January and their out-of-pocket costs rise.
But Humana executives told analysts Thursday that the jump in costs they saw in November and December for Medicare Advantage customers wasn't tied to respiratory illnesses like the flu or COVID-19.
The company saw a rise in patients being admitted to hospitals instead of being held for observation and then released. Chief Financial Officer
The health insurer also is seeing more growth in care that doesn’t involve a hospital stay, like doctor visits and outpatient surgeries and the use of supplemental benefits.
Medicare Advantage plans are privately run versions of the federal government’s Medicare program mostly for people age 65 and older. Humana has nearly 6 million people enrolled in Medicare Advantage plans.
Humana leaders said in a statement Thursday that they believe the rising medical costs were an “industry dynamic” that was not specific to Humana. They also said that the costs “may persist for an extended period or, in some cases, permanently reset the baseline.”
Rival
But UnitedHealth leaders also have stressed that the rising costs wouldn’t affect their expectations for 2024.
Jefferies analyst
“We did not think
Windley noted that the company appears to be forecasting conservatively by assuming that there will be little moderation in the medical cost trend.
Humana also said Thursday it was backing off a previously announced goal of adjusted earnings of
Shares of Humana, based in
UnitedHealth dropped 5%. The Blue Cross-
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