© Reuters. FILE PHOTO: UnitedHealth Group company logo appears on the side of one of their office buildings in Santa Ana, California
By Manojna Maddipatla
(Reuters) – UnitedHealth Group Inc (NYSE 🙂 on Thursday raised its adjusted profit target for 2021, as tight control of medical expenses has made it easy for America’s largest health insurer easily beat first-quarter earnings estimates, sending stocks up more than 4%.
The result of this industry has enhanced its competitors’ market share. Anthem Inc grew by 3%, Cigna Corp (NYSE 🙂 increased by 1% and Humana Inc (NYSE 🙂 increased by 3%.
Medical costs of health insurers have fluctuated since the outbreak of the coronavirus as the savings from patients who delayed care and procedures early in the pandemic were later offset by the higher costs associated with testing, treatment and vaccination against COVID-19.
Image: UnitedHealth medical cost trends below estimates during a pandemic https://graphics.reuters.com/UNITEDHEALTH-RESULTS/azgvoxnrypd/chart.png
UnitedHealth benefited from a reduction in COVID-19 costs in the second half of the first quarter after the wave of infections and hospitalizations eased.
Chief Financial Officer John Rex said in a post-earnings call: “To see this, February and March showed COVID-related interest at about half of what was experienced during the month. first”.
In April, the company started noticing another increase in COVID-19-related care, though it wasn’t closer to January levels, he added.
UnitedHealth’s medical loss rate – the percentage of premiums paid for medical services – was 80.9% in the quarter ended March 31, lower than the 82.9 consensus forecast % of analysts, according to Refinitiv IBES data.
UnitedHealth’s first quarterly earnings since new CEO Andrew Witty took office in February will reset Wall Street’s expectations for all health insurers, some analysts said. fine this quarter.
UnitedHealth currently forecasts 2021 adjusted earnings of $ 18.10 to $ 18.60 per share, up from its previous forecast of $ 17.75 to $ 18.25.
The company says it expects to book most of its previous forecast of $ 1.80 per share from COVID-19 costs for the second half of the year.
Health insurers across the country will likely remain relatively cautious with their expectations about how wellness operations could play out, said Stephens analyst Scott Fidel. of year.
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