{"id":23633,"date":"2023-06-16T17:23:48","date_gmt":"2023-06-16T21:23:48","guid":{"rendered":"https:\/\/ifintechworld.com\/investing\/humana-is-latest-health-insurer-to-warn-of-higher-costs-from-pandemic-delayed-procedures\/"},"modified":"2023-06-16T17:23:49","modified_gmt":"2023-06-16T21:23:49","slug":"humana-is-latest-health-insurer-to-warn-of-higher-costs-from-pandemic-delayed-procedures","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=23633","title":{"rendered":"Humana is latest health insurer to warn of higher costs from pandemic-delayed procedures"},"content":{"rendered":"
\n

Shares of Humana Inc. fell 4% Friday to lead S&P 500 decliners and weighed on the broader health-insurance sector, after the company provided a somewhat downbeat outlook for benefit-expense ratios. <\/p>\n

The news comes just two days after rival UnitedHealth Group Inc.
\n UNH,
\n -1.59%<\/bg-quote>
\n said pent-up demand from senior citizens for hip and knee surgeries that were delayed by the COVID-19 pandemic were boosting its costs, sparking a steep selloff in the sector.<\/p>\n

\n

Humana
\n HUM,
\n -3.92%<\/bg-quote>
\n affirmed its 2023 guidance for adjusted earnings per share of at least $28.25, while the current FactSet EPS consensus is $28.32. <\/p>\n

But the company said in a regulatory filing that it now expects its benefit-expense ratio for its insurance segment to be at the top end of the previously provided guidance range of 86.3% to 87.3%. For insurers, a higher expense ratio means higher costs to provide insurance. <\/p>\n

For the second quarter, the company said it expects the benefit-expense ratio to be toward the top half of its full-year guidance range, while the FactSet consensus is 86.4%. <\/p>\n

\u201cThis expectation is primarily driven by the emergence of higher than anticipated non-inpatient utilization trends, predominantly in the categories of emergency room, outpatient surgeries, and dental services, as well as inpatient trends that have been stronger than anticipated in recent weeks, diverging from historical seasonality patterns,\u201d said the filing.<\/p>\n

The company is also seeing a strong rise in individual Medicare Advantage enrollment, including a higher-than-expected proportion of age-ins, or patients who have reached the age of 65, \u201cwhich tend to run a higher benefit-expense ratio than the average new member,\u201d Humana said.<\/p>\n

\u201cAs previously disclosed, on average, new members take approximately 3 years to achieve mature profitability levels,\u201d the company said. <\/p>\n

Mizuho analyst Ann Hynes said the news will likely limit upside for the stock going forward. <\/p>\n

\u201cImportantly, [Humana] stated that the elevated utilization was contemplated in 2024 Medicare Advantage bids submitted earlier this month, which should relieve some investor fears,\u201d said Hynes, who has a buy rating on the stock. <\/p>\n

Hynes estimates that Centene Corp.
\n CNC,
\n -0.70%<\/bg-quote>
\n has the next-greatest exposure to Medicare Advantage patients after Humana and United Health, at about 16% of total revenue. That\u2019s followed by Elevance Health Inc.
\n ELV,
\n -1.89%<\/bg-quote>
\n at about 15% of revenue, CVS Health Corp.
\n CVS,
\n -2.56%<\/bg-quote>
\n at about 14%, Molina Health Inc.
\n MOH,
\n -2.04%<\/bg-quote>
\n at 12% and Cigna Group
\n CI,
\n -0.24%<\/bg-quote>
\n at about 4%. <\/p>\n

Centene was down 0.9%, Elevance was down 2%, Molina was down 1.4% and Cigna was down 0.4%.<\/p>\n

Stocks expected to gain from their role in outpatient elective surgeries were higher, led by hospital operators HCA Healthcare Inc.
\n HCA,
\n +1.47%<\/bg-quote>,<\/span>
\n up 1.5%; Tenet Healthcare Corp.
\n THC,
\n +0.31%<\/bg-quote>,<\/span>
\n up 0.9%; Universal Health Services Inc.
\n UHS,
\n +0.55%<\/bg-quote>,<\/span>
\n up 1.98%; and behavioral healthcare services provider Acadia Healthcare Co.
\n ACHC,
\n -0.45%<\/bg-quote>,<\/span>
\n up 0.3%. <\/p>\n

Surgery Partners Inc.
\n SGRY,
\n -2.96%<\/bg-quote>,<\/span>
\n a provider of surgical facilities, was down 0.6% but has gained 8% this week.<\/p>\n

Humana\u2019s stock has shed 12% in the year to date, while the S&P 500
\n SPX,
\n -0.37%<\/bg-quote>
\n has gained 15%. <\/p>\n<\/p><\/div>\n<\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Shares of Humana Inc. fell 4% Friday to lead S&P 500 decliners and weighed on the broader health-insurance sector, after the company provided a somewhat downbeat outlook for benefit-expense ratios. The news comes just two days after rival UnitedHealth Group Inc. UNH, -1.59% said pent-up demand from senior citizens for hip and knee surgeries that […]<\/p>\n","protected":false},"author":1,"featured_media":23634,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"video","meta":{"footnotes":""},"categories":[239],"tags":[83],"class_list":["post-23633","post","type-post","status-publish","format-video","has-post-thumbnail","hentry","category-investing","tag-featured","post_format-post-format-video"],"yoast_head":"\nHumana is latest health insurer to warn of higher costs from pandemic-delayed procedures | iFintechWorld<\/title>\n<meta name=\"description\" content=\"Shares of Humana Inc. fell 4% Friday to lead S&P 500 decliners and weighed on the broader health-insurance sector, after the company provided a\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/ifintechworld.com\/?p=23633\" \/>\n<meta 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