(Reuters) -Elevance Health on Tuesday beat Wall Street estimates for third-quarter profit as the health insurer managed to keep medical costs in check, sending its shares more than 7% higher in premarket trading.
Several insurers, including Elevance, UnitedHealth and Centene, have warned of elevated costs across government-backed plans, as demand for healthcare increased across the United States over the last two years.
Despite a dynamic healthcare environment, Elevance’s results were in line with expectations and reflect company’s disciplined execution across its platforms, CEO Gail Boudreaux said.
“As we plan for 2026, we remain disciplined in managing what we can control.”
The company is the first major health insurer to report third-quarter earnings.
Elevance had in July flagged elevated medical costs in its individual plans that conform to the Affordable Care Act, also known as Obamacare, and its Medicaid plans for low-income people.
The costs for the quarter were higher mainly due to its Medicare business, the company said on Tuesday.
Elevance reported a quarterly medical loss ratio, the percentage of premiums spent on medical care, of 91.3%, lower than analysts’ estimates of 91.73%.
The better-than-expected results also lifted shares of its peers. UnitedHealth shares rose 1.3%, while Centene was up 2.4% before the bell.
Elevance also reaffirmed its 2025 adjusted profit forecast of about $30 per share, as well as its annual expectation for medical loss ratio at 90%. Companies typically aim for a ratio closer to 80%.
On an adjusted basis, the company reported a profit of $6.03 per share, compared with the average of analysts’ estimates of $4.93 per share, as per data compiled by LSEG.
(Reporting by Sneha S K and Sriparna Roy in Bengaluru; Editing by Leroy Leo)
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