Humana rises after medical costs got here in lower than expected

A Humana office in Louisville, Kentucky, US, on Monday, July 31, 2023.

Jon Cherry | Bloomberg | Getty Images

Humana shares rose Wednesday after the health insurer said medical costs got here in lower than expected during its second-quarter earnings report.

The outcomes ease investor concerns two months after Humana and rival UnitedHealth Group warned that a surge in demand for non-urgent surgeries and outpatient services amongst seniors was driving up claims. 

Each firms – the 2 biggest providers of Medicare Advantage plans for people ages 65 and above – have now suggested that the uptick could also be abating. 

Humana reported a medical loss ratio, the share of premiums it spends on medical care, of 86.3% for the second quarter. Analysts had estimated that ratio can be 86.5%, in line with Refinitiv data.

Humana highlighted a “stabilizing Medicare Advantage utilization environment” based on essentially the most recent claims activity, without elaborating.

The corporate said in June it expected its second-quarter medical loss ratio to be toward the highest range of its full-year outlook of 86.3% to 87.3%. Humana reiterated that full-year guidance on Wednesday.

Humana’s stock rose 5% in morning trading Wednesday. Shares are down about 5% for the yr after the broader health care sector took a beating in June, putting the corporate’s market value at around $60 billion.