April 22 (Reuters) – Elevance Health raised its annual profit forecast on Wednesday, saying it has greater clarity on medical costs for the rest of the year as it leans on its efforts to keep them in check.
Health insurers have been grappling with high medical costs, driven by rising demand for health services across government-backed plans in recent years.
Elevance has said it made deliberate changes to its healthcare programs and exited select locations to manage sustained pressure in its Medicaid plans for low-income people.
“Our first-quarter results exceeded expectations, reflecting underlying business strength and improving claims experience,” said CEO Gail Boudreaux.
The company reported a medical loss ratio, the percentage of premiums spent on medical care, of 86.8% for the quarter, while analysts expected 87.01%, according to data compiled by LSEG.
Elevance banks more on commercial and Medicaid health plans, and has been exiting markets where its Medicare Advantage business has been underperforming.
Medicaid plans have been under pressure due to higher utilization of medical services. As states re-determined Medicaid eligibility, many healthier members left the rolls, leaving a sicker population with greater medical needs.
The company forecast annual adjusted profit to be at least $26.75 per share, compared with at least $25.50 per share projected earlier. Analysts on average estimated an annual profit of $25.73 per share.
Elevance had previously said it views 2026 as a year of “execution and repositioning” as it expects to return to at least 12% adjusted profit growth in 2027.
On an adjusted basis, it posted a quarterly profit of $12.58 per share, beating the estimate of $10.82 per share.
(Reporting by Sneha S K and Sriparna Roy in Bengaluru; Editing by Shilpi Majumdar)
Comments