logo
Elevance's forecast cut magnifies medical cost woes for US health insurers

Elevance's forecast cut magnifies medical cost woes for US health insurers

Reuters17-07-2025
July 17 (Reuters) - Elevance (ELV.N), opens new tab lowered its annual profit forecast and missed Wall Street estimates for quarterly earnings on Thursday, becoming the latest health insurer to be hurt by persistently high medical costs.
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.
Orange background

Try Our AI Features

Explore what Daily8 AI can do for you:

Comments

No comments yet...

Related Articles

Explosion rips through US steel plant leaving workers trapped
Explosion rips through US steel plant leaving workers trapped

Telegraph

time18 minutes ago

  • Telegraph

Explosion rips through US steel plant leaving workers trapped

An explosion ripped through a steel plant in Pittsburgh leaving multiple people injured and others trapped. Workers remain stuck under rubble at Clairton Coke Works in Pennsylvania, a raw coal processing facility, after the blast on Monday, officials said. A fire initially broke out at the plant around 10.51am local time (3.51pm UK), according to Allegheny County Emergency Services. Five people have been taken to hospital. The explosion sent a large column of black smoke billowing into the air visible for miles around. A local told CNN that the explosion felt like an 'earthquake'. Footage from the aftermath of the incident shows fire crews battling flames as heavy smoke rises from the facility. Josh Shapiro, the governor of Pennsylvania, said his team is in touch with local authorities in Clairton. 'The scene is still active, and folks nearby should follow the direction of local authorities, ' Mr Shapiro wrote on X. 'Please join Lori and me in praying for the Clairton community.' Abigail Gardner, the Allegheny County director of communications, said the health department is on site monitoring air quality. The Clairton Coke Works on the Monongahela River south of Pittsburgh is the largest coking site in North America. It is also one of four major steel plants in Pennsylvania that employ several thousand workers. Donald Trump made reviving the US steel industry a major focus of his second term, with workers at the Clairton plant coming out to support him during a visit to the state on May 30. In June, US Steel and Nippon Steel announced they had finalised a $15bn (£11bn) 'historic partnership' that came a year and a half after the Japanese company first proposed its buyout of the American steelmaker. In recent years, the Clairton plant has been dogged by concerns over safety and pollution. In February, a problem with a battery at the plant led to a 'buildup of combustible material' that ignited, causing an audible 'boom,' the Allegheny County Health Department said. Two workers who got material in their eyes received first aid treatment at a local hospital but were not seriously injured. In 2019, the company agreed to settle a lawsuit for $8.5m (£6.3m), under the terms of which it agreed to invest millions to reduce soot emissions and noxious odours from the facility, located around 20 miles (32 kilometers) south of Pittsburgh. It has faced further lawsuits over pollution from the Clairton facility, including ones accusing the company of violating clean air laws after a December 2018 fire damaged the site's sulphur pollution controls.

American Bar Association adopts resolution against Trump's law firm crackdown
American Bar Association adopts resolution against Trump's law firm crackdown

Reuters

time18 minutes ago

  • Reuters

American Bar Association adopts resolution against Trump's law firm crackdown

Aug 11 (Reuters) - The American Bar Association's policymaking body on Monday adopted a resolution opposing government efforts to punish 'lawyers, law firms, or other organizations for representing or having represented any particular client or cause disfavored by the government.' The resolution, opens new tab is the latest in an escalating conflict between the Trump administration and the ABA, which is the nation's largest voluntary lawyer organization with about 170,000 dues-paying members. In recent months, the ABA has publicly clashed with the administration over officials' attacks on judges and law firms, while government officials have dismissed the ABA as a 'snooty' organization of 'leftist lawyers' and alleged that some of its diversity efforts are illegal. The U.S. Department of Justice has barred its attorneys from participating in ABA events and curtailed the organization's ability to vet new federal judicial nominations. Trump in April threatened to revoke the ABA's status as the federally recognized accreditor of law schools. The rule of law 'will not long survive if lawyers and law firms are threatened and punished for doing their jobs and if judges are threatened with punishment for doing their jobs,' the ABA's new resolution said. The White House did not immediately respond to a request for comment on the resolution. The ABA has brought multiple lawsuits against the Trump administration, including a pending case filed in July that seeks an order barring the White House from pursuing what the ABA called a campaign of intimidation against major law firms. The ABA said Trump's actions, including executive orders targeting specific firms, have chilled the ability of some public-interest organizations to find lawyers for new matters. Reuters in a special report last month described how some firms were retreating from public interest legal work in the wake of Trump's pressure campaign. The Justice Department on Friday asked, opens new tab a federal judge in Washington D.C., to dismiss the ABA's case, arguing that there's no certainty that Trump will target the business operations of another firm, and that the claims could only be brought by individual plaintiffs, and not the "monolithic" ABA. The DOJ also said the ABA hadn't shown Trump's actions had dissuaded lawyers from taking certain cases. The ABA's House of Delegates is meeting Monday and Tuesday in Toronto to consider a slew of resolutions, many of which relate to the federal government and the rule of law. The resolution opposing attacks on lawyers and law firms also opposes threats to impeach judges 'based solely on disagreement with the merits of the rulings made by those judges.' Since returning to the White House, Trump has issued a series of executive orders targeting law firms over their past clients and lawyers they hired. Nine law firms have struck deals with the president, pledging nearly $1 billion in free legal services on mutually agreed legal issues with the White House in order to stave off similar executive orders. Four law firms successfully sued the administration to block the orders against them, which stripped their lawyers of security clearances and restricted their access to government officials and federal contracting work. Read more: How Trump's crackdown on law firms is undermining legal defenses for the vulnerable What Republican, Democratic judges said about Trump's law firm orders ABA ramps up defense of judges as White House dismisses 'snooty' lawyers American Bar Association sues to block Trump's attacks on law firms

DOWNLOAD THE APP

Get Started Now: Download the App

Ready to dive into a world of global content with local flavor? Download Daily8 app today from your preferred app store and start exploring.
app-storeplay-store