UnitedHealth Group reported a surge in third-quarter medical costs on Tuesday, as the company struggled with lower government payments in its insurance business and persistently high demand for medical care,

The healthcare-services company’s result for the fourth quarter of 2023 sparked a sell-off from which the managed-care sector has yet to recover.

UnitedHealth’s stock was having its worst day in more than four years on Tuesday, after the healthcare giant beat third-quarter profit and revenue expectations but missed on medical-care profitability and lowered its full-year outlook.

UnitedHealth Group's third-quarter medical costs exceeded Wall Street estimates on Tuesday, as the insurer paid out more due to persistently high demand for healthcare services and received lower reimbursements on government-backed insurance plans.

Quarterly profit of $6.06 billion at the Minnetonka-based company beat analyst estimates on a per-share basis as revenue grew 9% over last year.