Elevance Health’s raised 2023 profit on cost reductions.

Clio Nguyen July 19, 2023 Health & Wellness

Elevance Health Inc (ELV.N) Raises Full-Year Profit Forecast

July 19 (Reuters) – Elevance Health Inc (ELV.N) raised its full-year profit forecast on Wednesday after beating quarterly profit estimates, aided by lower-than-expected medical costs in its health insurance business.

UnitedHealth Group (UNH.N) Surpasses Quarterly Profit Estimates

Larger rival UnitedHealth Group (UNH.N) beat quarterly profit estimates last week, helped by lower medical costs, despite flagging higher costs from rising surgeries earlier.

Health Insurers Concerned About Rising Medical Costs

Health insurers have been cautious of a jump in medical costs this year after noting a spurt in demand for elective surgeries such as hip and knee replacements, which older patients at higher risk of COVID had delayed.

Elevance’s medical loss ratio, the percentage of claims paid to premiums collected, was 86.4% in the second quarter, compared with 87% a year earlier, and estimates of 86.95%, according to Refinitiv.

Elevance Increases Annual Profit Outlook

On an adjusted basis, the company now expects annual profit of more than $32.85 per share, compared with its previous forecast of over $32.70 per share. Analysts were expecting a profit of $32.80 per share, according to Refinitiv data.

Excluding items, Elevance earned $9.04 per share in the second quarter, above Refinitiv IBES estimates of $8.8 per share.

Reporting by Mariam Sunny and Khushi Mandowara in Bengaluru; Editing by Shinjini Ganguli