Shares of Molina Healthcare Inc. plunged as much as 52 percent on Thursday after the company slashed its forecast for 2005, blaming rising medical costs, and said it expects a second-quarter loss in the range of 15 to 20 cents per share.

Shares of Long Beach-based Molina, which sells health plans through the Medicaid health insurance program for low-income individuals, settled down 43.5 percent to $26.

Late Wednesday, Molina cut its earnings forecast to 73 cents to 80 cents per share for the full year, from previous guidance of $2.40 to $2.45 per share. Analysts had forecast that Molina would earn 56 cents per share in the second quarter and $2.49 per share for the full year.

The company said its rising medical costs were the result of increased hospital unit costs in Washington and New Mexico, higher maternity costs in Michigan, and increased use of services in Washington from a high incidence of a flu-like illness.

Molina’s drastic share drop led shares of health insurers that work with government Medicaid programs down as well. Shares of UnitedHealth Group, WellPoint Inc. and Aetna Inc. all suffered large-percentage losses.

And Amerigroup Corp., Centene Corp., Humana Inc. and WellCare Health Plans Inc. fell after a Credit Suisse First Boston report said insurance companies that do business with Medicaid were overvalued.