(Bloomberg) — Humana Inc. shares plunged by the most since March 2020 and competing health insurers dropped after the company cut its forecast for Medicare membership growth by about half.
Humana expects to add 150,000 to 200,000 new members in its Medicare Advantage plans this year, down from its prior estimate of 325,000 to 375,000, the company said in a filing on Thursday. It cited higher-than-expected terminations during the recent enrollment window for 2022 Medicare coverage.
Shares of Humana fell as much as 11.3% as of 10:26 a.m. in New York.
Private Medicare Advantage health plans have been driving growth for health insurers and attracting new entrants to the market. It’s the core business for Humana, the second-largest seller of those plans, behind only UnitedHealth Group Inc.
It’s unclear whether Humana’s lowered projections reflect members going to competitors or a slowdown in the growth of the Medicare Advantage market overall.
UnitedHealth shares declined as much as 2.8% to $476.20, dragging down the price-weighted Dow Jones Industrial Average. Shares of newer Medicare-focused companies, including Clover Health Health Investments Corp. and Oak Street Health Inc. also fell sharply, sinking as much as 8.4% and 7.4%, respectively.
Humana reaffirmed its earnings-per-share guidance for 2021 and reiterated that 2022 adjusted earnings would be at the “low end” of its target growth rate of 11% to 15%.
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