(Reuters) -Humana on Wednesday beat third-quarter profit estimates on a better-than-expected performance in its government-backed insurance plans, but disappointed the Street by maintaining its annual forecast, sending its shares down more than 2% premarket.

The health insurer stuck to its 2023 adjusted profit target of at least $28.25 per share. Analysts on average expected a profit of $28.31 per share for the year, LSEG data showed.

The market seems to be disappointed that Humana (NYSE:HUM) did not increase its full-year guide despite a strong quarter, said Morningstar analyst Julie Utterback.

The company’s caution relates to elevated demand for non-urgent surgeries that has affected the insurance industry and may constrain Humana’s fourth-quarter results, Utterback added.

Health insurers’ medical costs have come under pressure in recent months as hospitals perform more procedures on the back of easing labour shortages and older adults returning for elective surgeries that were delayed during the pandemic.

Humana and rival UnitedHealth (NYSE:UNH) had earlier this year warned of a jump in medical costs.

Humana’s benefit-expense ratio, or the percentage of payout on claims compared to its premiums, rose to 86.4% in the third quarter, from 85.3% a year ago. Analysts were expecting a ratio of 86.7%, according to LSEG data.

The health insurer is focused on increasing membership in its main business of Medicare Advantage – government-backed plans for people over 65 years or those with certain disabilities – as it shuts down its commercial insurance business.

As of Sept. 30, 5.9 million members were enrolled in its Medicare Advantage plans, up 14.7% from a year ago.

The company raised its forecast for 2023 Medicare Advantage membership for the second time this year, and now expects to add at least 860,000 people.

It reported a quarterly adjusted profit of $7.78 per share, beating analysts’ estimate of $7.16 per share.