Health
Cigna Plunges as Catastrophic Medical Costs Hurt Profit
- Costly drugs, cancer surgeries inflated spending in some plans
- Management pushing up prices, but expects problem to persist
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Cigna Group shares slumped after the health insurer reported cost pressures from surprisingly high catastrophic medical claims that are likely to persist.
Cigna’s health benefits division spent 87.9% of premium revenue on medical expenses in the fourth quarter, more than analysts were expecting from that key measure. Management blamed it on “stop loss” plans, which employers use to guard against costly medical claims.