(Reuters) -Elevance Health on Thursday reported quarterly profit above Wall Street estimates and slightly raised its annual earnings expectations, as higher premiums from commercial insurance plans helped keep medical costs in check.
Health insurers have struggled in recent quarters with high medical costs due to robust demand for medical care among older adults. Compared to rivals UnitedHealth and Humana, Elevance is less exposed to government-backed Medicare Advantage (MA) plans for people aged 65 and older and banks more on commercial and Medicaid health plans.
Medicaid insurance plans, backed by state governments, help cover medical care costs for people with limited income and resources.
The lower exposure to Medicare Advantage plans has helped keep Elevance’s costs under control, with Medicare members making up only 6.3% of Elevance’s total memberships as of March 2024.
The insurer’s commercial plan memberships grew 2.1% to 27.45 million at the end of the first quarter and helped partially offset a loss of members in its Medicaid plans.
A recent cyberattack at UnitedHealth’s technology unit, Change Healthcare, has also raised some uncertainty around insurance claims processing.
However, Elevance said last month that prior approvals, provider payments, and pharmacy claims were not materially impacted by the hack.
Elevance’s quarterly revenues from premiums was $35.7 billion, above analysts’ expectations of $35.54 billion.
The company’s medical loss ratio, the percentage of claims paid to premiums collected, was 85.6% for the first quarter. Analysts had expected a ratio of 85.97%, according to LSEG data.
Elevance now expects annual adjusted profit to be greater than $37.20 per share, compared with its previous forecast of more than $37.10 per share.
On an adjusted basis, Elevance made a profit of $10.64 per share for the quarter, above analysts’ estimates of $10.53 per share.
(Reporting by Mariam Sunny and Bhanvi Satija in Bengaluru; Editing by Maju Samuel)
