By TOM MURPHY AP Health Writer

Humana surprised Wall Street again on Thursday with a lower-than-expected earnings forecast as insurers that sell Medicare Advantage plans continue to struggle with rising care costs.

Shares of several health insurers plunged in early trading after Humana said a spike in care use that hit late last year likely will persist throughout 2024. Humana also debuted an earnings forecast for the new year that fell more than $13 short of average expectations.

Thursday’s drop came after health insurance stocks also tumbled last week after Humana scaled back its 2023 profit expectations due to those rising costs.

Humana said then that its Medicare Advantage patients used more inpatient care than it expected in November and December. The health insurer also saw more growth in care that doesn’t involve a hospital stay, like doctor visits and outpatient surgeries and the use of supplemental benefits.

Humana said Thursday it saw a rise in patients being admitted for short hospital stays instead of being observed and then released. The insurer said it was still trying to understand the factors behind the rising costs, but growing flu, COVID-19 and RSV cases did not contribute.

Company leaders said in a statement that they believe the rising medical costs were an “industry dynamic” that was not specific to Humana. They also said that the costs “may persist for an extended period or, in some cases, permanently reset the baseline.”

Rival UnitedHealth Group Inc., the only insurer with a bigger Medicare Advantage enrollment, also has struggled with cost hikes and its shares tumbled two weeks ago after saying that its medical costs soared 16%.

But UnitedHealth leaders also have stressed that the rising costs wouldn’t affect their expectations for 2024.

Medicare Advantage plans are privately run versions of the federal government’s Medicare program mostly for people age 65 and older. Those plans are one of Humana’s biggest forms of coverage outside insurance it provides for military families and retirees.

Humana Inc. said Thursday that it expects adjusted earnings of about $16 per share for the new year. Analysts had been projecting per-share earns of $29.14, according to the data firm FactSet.

Shares of Humana, based in Louisville, Kentucky, plunged 13% in early morning trading to $349.63.

UnitedHealth also dropped about 4%. The Blue Cross-Blue Shield insurer Elevance Health also was down even though it reported on Wednesday a medical cost trend that was better than analysts expected.