NEW YORK (Reuters)—Americans' low use of health care services has proved a boon to health insurers over the past two years, reducing medical claim costs and raising profits.

But the growing view on Wall Street is that those days are over.

A series of first-quarter earnings disappointments for health insurers in the past month has damped hopes for a repeat of the profit windfalls that led to huge stock gains in 2011.

After digesting the reports, many investors fear that medical claims costs are poised to rise. That stands to keep industry shares in check until the investors are sure of the direction of consumer trends.

The sector "could be dead money for some time," said Tim Nelson, a health care analyst with Nuveen Asset Management. "There's not going to be the big upside and the big series of beats...I think investor sentiment will stay cautious until at least the second half of the year."

The Morgan Stanley Healthcare Payor index of insurers has fallen about 12% since bellwether UnitedHealth Group Inc. kicked off the reporting season last month. That compares with a roughly 5% drop for the S&P 500 index.

Last year's lift resulted from the companies' enrolled members using significantly fewer services than the insurers had priced into their plans for employers. Some of that—such as fewer doctor visits or nonemergency procedures like hip replacements—stemmed from high unemployment rates, while many Americans who had jobs were unable to cover rising out-of-pocket costs for copayments and deductibles.

But as hiring improves, even slightly, and the country's economic troubles seem more tractable, companies such as Aetna Inc., UnitedHealth and Cigna Corp. are telling analysts they are assuming use of health care services will rise this year.

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"At the minimum, the stocks themselves are in a holding pattern until the second-quarter earnings season in July," said Les Funtleyder, a portfolio manager with Miller Tabak. "Investors are going to be holding their breath to see whether or not the utilization rates we saw coming off of (the first quarter) were just individual data points."

Goldman Sachs analyst Matthew Borsch had downgraded the sector to "neutral" from "attractive" in February based in part pressure on profit margins from price competition.

More recently, Mr. Borsch pointed to a "tougher earnings environment" for health insurers, saying cost trends are "no longer a source of positive surprise for most companies."

One major uncertainty looms over the sector: the Supreme Court's ruling on the U.S. health care overhaul law, expected in late June. Some anticipate a short-term health insurer rally should the court strike down the entire law, which could spare the industry the costs and risks of extending health care coverage to millions more Americans.

And some analysts say evidence of more frequent trips to the doctor or hospital is lacking. Even if a slight increase in health care use is in the works, they argue, insurers have accounted for it with higher-priced plans.

"A lot of the hospitals are talking about how certain procedures are growing...but at the same time they are being offset by declines in other areas, so as a whole I don't think it's increasing," said Leerink Swann analyst Jason Gurda. He said near-term business prospects for the sector are still positive.

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Richard Evans, a founding partner of boutique investment research firm SSR, sees a silver lining if employment improves. Health insurers may see enrollment increases as a result, with new members who tend to be healthier and therefore need fewer services.

"We actually think that the improving economy, which is signaled by improving utilization, is actually bullish for the commercial HMOs," Mr. Evans said. "The market just has got (the stocks) 180 degrees wrong on how to trade them on utilization."

Medical costs increased about 7% a year for most of the decade, but growth slowed to 3.9% in 2010 and 4.5% last year, according to Goldman Sachs Group Inc., which looked at data for employer-based insurance plans.

A rebounding U.S. economy could drive up demand for health care services, as Americans who gain more job security also feel increasingly at ease using their health benefits.

But another theory is that Americans, who now bear a greater share of costs for health care, are making a permanent shift to using fewer health care services.

The portion of Americans aged 45 to 64 who delayed or skipped medical care due to cost rose from about 9% in 2000 to nearly 15% in 2010, according to the Centers for Disease Control and Prevention. The rate was similar for 18- to 44-year olds.

Health insurers also may be cautious about making definitive statements about cost trends at this point in the year, because many insurance claims tend to lag quarterly reporting dates.

"Given the billing cycle and the nature of this business, they can't sit there and say through 90 days we know exactly what utilization is doing," said David Heupel, a health care analyst with Thrivent Investment Management.

Health insurers set aside a certain amount of reserves each quarter to pay for claims from prior periods, which can come in 90 days or more after services are provided. If costs of those claims end up being lower, companies can record the reserves as profit.

For example, Aetna, the No. 3 U.S. health insurer, initially forecast an 8% increase in the cost of claims for 2011 but ended the year with a 5.5% increase. The discrepancy between projected and actual costs boosted profits.

Aetna said last month that health care trends stabilized and growth rates were not slowing any more. The company said its claims from the fourth-quarter and earlier basically matched what it had expected. Wall Street had expected Aetna to realize a gain and report higher profits for the first quarter of 2012.

For 2012, Aetna forecast a 6.5% increase in—about one percentage point above last year's total. About 70% of Aetna's cost forecast generally is related to prices from providers and manufacturers—or unit cost—with the remaining from utilization. Aetna expects unit cost increases to stay basically stable—up 4.5% to 5% this year after rising about 5% in 2011.

Utilization, however, is expected to rise 1.5% to 2% this year, from about 0.5% last year.

The company expects more costs from physician office visits as well as outpatient services, such as emergency room visits and certain surgeries.

"It's kind of barely trembling the needle, is my interpretation of what these companies are describing," Jefferies & Co. analyst David Windley said of the use of health services. "The likelihood that you get significant earnings bonuses from prior period development is much lower."