Humana Cuts View, Spreading Insurer Pain

Updated from 10:47 a.m. EDT

OKLAHOMA CITY -- Humana (HUM Quote) joined WellPoint (WLP Quote) in slashing its guidance, sending health insurer stocks spiraling yet again.

Early Wednesday, Humana warned that its profits will fall well short of expectations due to high costs associated with its Medicare prescription drug coverage. The company rushed to assure investors that its traditional health care coverage -- including its core Medicare Advantage business -- had not caused the shortfall.

Specifically, Humana expects to earn just $4 to $4.25 per share this year, well below its previous forecast of $5.35 to $5.55. Meanwhile, the company cut its first-quarter outlook by almost half. ...