July 15 (Reuters) – Elevance Health raised its annual profit forecast after beating second-quarter earnings estimates on Wednesday, as it looks to keep medical costs in check.
In April, the company said it has greater clarity on medical costs for the rest of the year as it leans on its efforts to keep them under control.
“Our second quarter results exceeded our outlook,” Chief Executive Officer Gail Boudreaux said.
Elevance, which has greater exposure to commercial insurance and Medicaid plans for low-income Americans, has been withdrawing from underperforming Medicare Advantage markets for older adults.
Higher demand for healthcare services among members of government-funded plans has increased medical expenses for health insurers.
For the quarter, the company reported a medical loss ratio, the percentage of premiums spent on medical care, of 89.7%. Analysts on average had expected a ratio of 90.15%, according to data compiled by LSEG.
The health insurer forecast annual adjusted profit to be at least $27 per share, compared with at least $26.75 per share projected earlier.
Analysts on average estimate an annual profit of $26.86 per share.
The company posted a quarterly adjusted profit of $7.45 per share, surpassing analysts’ average estimate of $6.21.
(Reporting by Sriparna Roy and Sneha S K in Bengaluru; Editing by Maju Samuel)
