Elevance's forecast cut magnifies medical cost woes for US health insurers
The company kicked off quarterly earnings for U.S. health insurers, a spot usually taken by industry bellwether UnitedHealth Group (UNH.N), opens new tab.
Health insurers have come under pressure from tougher regulations and rising costs. Government-focused plans are under strain due to funding pressures, while Medicaid costs are rising without adequate state rate adjustments.
UnitedHealth, which is expected to report earnings on July 29, already cut its annual profit forecast in May, citing higher demand for medical care in government-backed plans.
Forecast cuts from peers Centene (CNC.N), opens new tab and Molina Healthcare (MOH.N), opens new tab followed soon due to a similar trend from members in state and federally-funded Medicaid plans as well as in so-called Obamacare.
Elevance on Wednesday said it sees annual adjusted profit of about $30 per share, compared with $34.15 to $34.85 per share it previously expected.
J.P.Morgan analyst Lisa Gill said the forecast cut was largely in the range that investors were expecting going into the quarter.
Shares of Elevance were down 1% in premarket trading, partially recovering from an initial slump of as much as 9%.
Elevance forecast full-year medical loss ratio, a closely watched metric which tracks medical costs, to be about 90%, reflecting the ongoing industry-wide trend of higher costs on Medicaid and Obamacare plans.
For the quarter, Elevance reported a medical loss ratio, the percentage of premiums spent on medical care, of 88.9% compared to analysts' estimates of 88.70%.
Elevance banks more on commercial and Medicaid health plans, which cover medical expenses for people with low income with about 19.1% of its members coming from Medicaid as of June 30.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Reuters
19 minutes ago
- Reuters
Oil prices little changed as industry report points to slowing US demand
Aug 13 (Reuters) - Oil prices were little changed on Wednesday after falling in the previous session after an industry report showed U.S. crude stockpiles climbed last week illustrating the end of the seasonal summer demand period is nearing. Brent crude futures gained 3 cents to 66.15 a barrel at 0102 GMT after dropping 0.8% in the previous session. U.S. West Texas Intermediate crude futures fell 3 cents to $63.14 after declining 1.2%. Crude inventories in the U.S., the world's biggest oil consumer, rose by 1.52 million barrels last week, market sources said, citing American Petroleum Institute figures on Tuesday. Gasoline inventories dropped while distillate inventories gained slightly. Should the U.S. Energy Information Administration data set for release later on Wednesday also show a decline, it could indicate that consumption during the summer driving season has peaked and refiners are easing back their runs. The demand season typically runs from the Memorial Day holiday at the end of May to the Labor Day holiday in early September. Analysts polled by Reuters expect the EIA report to show crude inventories fell by about 300,000 barrels last week. Outlooks issued by OPEC and the EIA on Tuesday pointed to increased production this year which also weighed on prices. But both expect output in the U.S., the world's largest producer, to decline in 2026 while other regions will increase oil and natural gas production. U.S. crude production will hit a record 13.41 million barrels per day in 2025 due to increases in well productivity, though lower oil prices will prompt output to fall in 2026, the EIA forecast in a monthly report. The Organization of the Petroleum Exporting Countries' monthly report said global oil demand will rise by 1.38 million bpd in 2026, up 100,000 bpd from the previous forecast. Its 2025 projection was left unchanged. The White House on Tuesday tempered the expectations for a quick Russia-Ukraine ceasefire deal, which may lead investors to reconsider an end to the war soon and any easing on sanctions Russian supply, which had been supporting prices. U.S. President Donald Trump and Russian President Vladimir Putin are due to meet in Alaska on Friday to discuss ending the war. "Trump downplayed expectations of his meeting with President Putin ... However, expectations of additional sanctions on Russian crude continue to fall," ANZ senior commodity strategist Daniel Hynes wrote in a note.
The Guardian
39 minutes ago
- The Guardian
Real Madrid hit out at plan for Barcelona and Villarreal to play La Liga match in Miami
Real Madrid say they are opposed to plans by their bitter rivals Barcelona to play a league match in the US this season, saying the move 'sets an unacceptable precedent'. Barcelona and Villarreal are seeking permission from the football authorities to play in Miami in December. Fan groups of the clubs have already threatened legal action if the plan progresses, and now Real have expressed their opposition to the move. 'Real Madrid would like to express to its members, supporters and football fans in general its strongest rejection of the proposal to play outside Spain the match … between Villarreal and Barcelona,' the club said in a statement. 'The measure, promoted without prior information or consultation with the clubs participating in that competition, violates the essential principle of territorial reciprocity that governs two-round league competitions [one game at home and the other at the opposing team's], altering the competitive balance and granting an undue sporting advantage to the applicant clubs. 'The integrity of the competition requires that all matches be held under the same conditions for all teams. Unilaterally modifying this regime breaks the equality between contenders, compromises the legitimacy of the results and sets an unacceptable precedent that opens the door to exceptions based on interests other than strictly sporting, with a clear impact on sporting integrity and the risk of adulteration of the competition. 'If this proposal is carried out, its consequences would be so serious that they would mean a before and after for the world of football.' Real said they had asked Fifa not to authorise the staging of the game without the prior consent of all La Liga clubs, and had asked Uefa to urge the Spanish football federation (Rfef) to withdraw the request. Villarreal had earlier pledged that season ticket holders would be offered free travel and entry if the league game was moved to Miami. The club also said those who cannot go, or do not wish to go, would receive a 20% discount on the total cost of their season ticket. If Villarreal and Barcelona ultimately get the green light, La Liga will be the first of Europe's top five leagues to stage a match overseas. Sign up to Football Daily Kick off your evenings with the Guardian's take on the world of football after newsletter promotion The Villarreal president, Fernando Roig, told the club's official website: 'Reaching the United States is an opportunity we must seize. We have to expand the brand of our football and of Villarreal CF. Many clubs agree on the need to internationalise and to look for ways to generate more revenue so we can get closer to other leagues, such as the Premier League.' Rfef gave its approval to the plan on Monday. The matter has now been referred to European football's governing body Uefa to begin the procedures and obtain the necessary authorisation from Fifa, world football's governing body. The Premier League chief executive, Richard Masters, said last year his competition had no plans to move matches overseas but accepted Fifa moves to review the rules meant the 'door was ajar' for other leagues to do so.
The Independent
an hour ago
- The Independent
Vegas funeral home which smelled of ‘death' shut down after failing to cremate bodies
A Las Vegas funeral home has shut down after authorities accused it of failing to cremate bodies promptly, sometimes leaving remains for months in unsanitary conditions that one neighbor said caused the business to smell like 'death.' The Nevada State Board of Funeral and Cemetery Services revoked the license of McDermott's Funeral Home and Creation Services last week, finding that the business had not cremated or properly disposed of eight bodies in a 'reasonable period of time.' One body was kept at the facility for over 10 months before being cremated, according to officials. 'The smell was straight up death,' Daran Denny, who owns a tattoo shop nearby, told the Las Vegas Review-Journal. 'I was a medic for 10 years, and I know what death smells like.' McDermott's owner, Chris Grant, said delays in processing were a result of waiting for approval from Clark County Social Services to pay for the treatment of bodies that went unclaimed or abandoned. The Independent has contacted the agency for comment. 'Human nature is: 'Funeral Home got closed. I bet they were doing some scummy stuff,'' he told the paper. 'Nobody thinks that me and my staff lost everything. I just lost a 25-year career. I just lost a business that I've been building for 8½ years. I just lost the ability to even provide for my family.' During a February 2024 site visit, an inspector found eight bodies that hadn't been swiftly processed — Pamala Middlebrooks, Joseph Vocatura, Debi Vince, Catherine Lane-Novak, Lonna Lonning, Teresa John, Lawrence Ponteri and Edward Elliot — all of which had sat in refrigeration units for two months or more. Investigators then found that in all eight cases, the funeral home hadn't filed death records within the lawful 72 hours of death or receiving the bodies, either. One inspector that year described seeing 'three coolers containing numerous bodies that were leaking blood and bodily fluids.' A visit also revealed 'fluids of a body… had dripped onto a body on a lower shelf and onto the floor,' according to documents obtained by KLAS. A McDermott's general manager told the outlet the inspections were 'baseless,' and the funeral board denied the business, which had complaints dating back to 2021 with regulators, the opportunity for 'corrective action.'
