Shares of Elevance Health were trading sharply lower after a guidance cut prompted by snags in the Medicaid business overshadowed a quarterly revenue beat at the health insurance provider.Elevance Health stock fell 17% to $414.

It was the latest sign of how medical expenses are squeezing insurers’ earnings, a result likely to punish shares across the sector.

We remain confident in the long-term earnings potential of our diverse businesses as we navigate a dynamic operating environment and unprecedented challenges in the Medicaid business,” Chief Executive Gail K.

The results show a worsening outlook for health insurers that for years have relied on government programs for growth.