AdvtJoin the community of 2M+ industry professionals Subscribe to our newsletter to get latest insights & analysis. Download ETHealthworld App Get Realtime updatesSave your favourite articles Scan to download AppLondon: Humana said on Wednesday that demand for medical care rose above its expectations in the second quarter, spooking investors already concerned about persistently high costs in its Medicare Advantage business.Shares of the company, which is a top provider of government-backed Medicare Advantage plans for adults aged 65 and older, fell 7 per cent to $376.23 in premarket trading.Other health insurers , including UnitedHealth , Elevance, CVS and Centene, also dropped between 2.7 per cent and 1.45 per cent before the bell.Humana said inpatient admissions - hospitalisations that require overnight stay - had risen above its expectations in the quarter ended June 30. "We continue to assess the durability of the higher admissions," Humana executives said in prepared comments ahead of a post-earnings conference call, as the company maintained its profit forecast for the full year.At least two analysts said Humana's decision to reaffirm its forecast reflected conservatism or caution, after the company beat Wall Street estimates for second-quarter profit on higher-than-expected revenue in the Medicare Advantage business, and lower-than-estimated administrative expenses On an adjusted basis, Humana reported a profit of $6.96 per share, higher than the average analyst estimate of $5.85.Humana's benefit expense ratio - the percentage of premiums spent on medical care - however, rose to 89 per cent from 86.3 per cent a year ago, but was in line with LSEG estimates.The Louisville, Kentucky based company earlier this year warned of a potential hit to its profit and withdrew its 2025 profit forecast, citing disappointing government Medicare reimbursement rates and high demand for care Lower-than-expected reimbursement rates have piled up more pressure for insurers who have been struggling with high medical costs since late last year as older adults returned to hospitals to catch up on delayed procedures. (Reporting by Sriparna Roy in Bengaluru; Editing by Shinjini Ganguli)

Source: Economic Times August 01, 2024 02:37 UTC