© Reuters. FILE PHOTO: Signage for Humana Inc. is pictured at a health facility in Queens, New York City, U.S., November 30, 2021. REUTERS/Andrew Kelly/File Photo
(Reuters) -Humana’s second-quarter profit beat Wall Street estimates on Wednesday, as a lower-than-expected spike in non-urgent surgeries helped keep a check on the health insurer’s medical costs, sending shares 4% higher in premarket trade.
Insurers have reported better-than-expected medical costs despite warnings from Humana (NYSE:) and UnitedHealth (NYSE:) – the two biggest providers of Medicare Advantage plans for people aged 65 and above – in June that an increase in non-urgent surgeries was driving up claims.
On Wednesday, Humana said claims were showing signs of stabilization.
Humana reported a medical loss ratio – the percentage of premiums it spends on medical care – of 86.3% for the quarter, versus the average analysts’ estimate of 86.5%, according to Refinitiv data.
The company had said in June it expected the business’ second-quarter MLR to be “biased towards the top half” of its full-year range of 86.3% to 87.3%.
Shares of Humana have slumped over 10% since UnitedHealth, and then the insurer itself, warned in June costs, especially those with Medicare plans, would surge this year.
Humana also raised its 2023 individual Medicare Advantage membership growth by 50,000 to about 825,000 new members.
Excluding one-off items, the health insurer earned a profit of $8.94 per share in the quarter ended June 30, higher than analysts’ average estimate of $8.82 per share, according to Refinitiv data.
This story originally appeared on Investing
