UnitedHealth Group (UNH) reported a better-than-expected profit for the third quarter on Tuesday, aided by expansion of its insurance and Optum businesses.
The health insurer’s medical costs, however, came in higher than expectations. For the quarter, the company’s medical loss ratio – the percentage of premiums spent on medical care – was 85.2%, higher than the 82.3% reported a year earlier, as well as analysts’ estimate of 84.2%.
Shares of UnitedHealth were down 2.4% in premarket trading.
The company, along with other health insurers, has faced elevated medical costs as a turnover in people enrolled in Medicaid left insurers with more sick patients.
Demand for healthcare services under Medicare plans – for people aged 65 years and older or those with disabilities – has also exceeded industry expectations since late last year as older adults underwent procedures they had postponed during the pandemic.
UnitedHealth posted an adjusted quarterly profit per share of $7.15, compared with analysts’ average estimate of $7, according to data compiled by LSEG.
(Reporting by Puyaan Singh and Leroy Leo in Bengaluru; Editing by Shinjini Ganguli)
