Humana’s stock tumbles 17% as quarterly loss widens amid soaring medical costs

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Humana Inc.’s stock

fell 17% early Thursday, after the managed care company’s quarterly loss widened amid soaring medial costs. Humana posted a loss of $491 million, or $4.42 a share, for the quarter, wider than the loss of $71 million, or 12 cents a share, posted in the year-earlier period. The company’s adjusted per-share loss came to 11 cents, while FactSet was expecting EPS of 89 cents. The number reflects additional increases in Medicare Advantage medical cost trends, which rose on higher-than-expected inpatient utilization, mostly in November and December, along with an increase in non-inpatient trends. Humana and rivals including UnitedHealth Group Inc.

have invested generously in the government’s Medicare Advantage program for seniors. Earlier in January, Humana warned that its fourth-quarter medial loss ratio, a measure of premiums paid to cover medical expenses, had climbed to 91.4%, above the 89% expected by analysts. Revenue rose to $26.462 billion from $22.439 billion, ahead of the $25.491 billion FactSet consensus. The company said it’s now expecting full-year EPS of about $14.87 and adjusted EPS of about $16.00, while FactSet is expecting $29.14. The stock has fallen 20% in the last 12 months, while the S&P 500

has gained 21%.

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