Cigna (CI) revealed a worse-than-expected decline in fourth-quarter profits and a disappointing full-year outlook on Friday as it continued to grapple with high medical costs.

For fiscal 2014, the health insurer predicts adjusted earnings in the range of $6.80 to $7.20 a share, below average analyst estimates of $7.32 in a Thomson Reuters poll.

Shares of Cigna fell 8.75% to $77.90 in recent trade.

In its most recent quarter, the Bloomfield, Conn.-based benefits manager reported net income of $361 million, or $1.29 a share, compared with a year-earlier profit of $406 million, or $1.41.

The decrease comes amid higher medical costs, with the insurer spending 86.4% of the Medicare Advantage premiums it received on medical claims last quarter, compared with 82.2% last year.

Excluding one-time costs related to a restructuring plan, Cigna said it earned $1.39 a share, below average analyst estimates of $1.49 in a Thomson Reuters poll.

Revenue was a bright spot, growing to $8.15 billion in the three months ended Dec. 31 from $7.6 billion a year ago. That beat the Street’s view of $7.35 billion.

Premiums and fees in its global healthcare business increased by 6% to $5.7 billion as Cigna added members across its major business segments.

“In the midst of an environment undergoing rapid change and disruption, our focused strategy and differentiated capabilities will enable us to deliver continued future growth," Cigna CEO David Cordani said in a statement.

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