Humana beats quarterly profit estimates on higher premiums

(Reuters) -Humana reported third-quarter profit that beat Wall Street estimates on Wednesday, on higher premiums.

The company also reaffirmed its annual profit forecast of about $17 per share.

“We feel positive about the direction we’re headed and the value we are creating for our members, patients and investors,” CEO Jim Rechtin said.

Humana is one of the largest providers of Medicare Advantage plans, under which the U.S. government pays private insurers a set rate to manage healthcare for people 65 and older as well as those with disabilities.

The company reported a quarterly medical cost ratio – the percentage of premiums spent on medical care – of 91.1%, a rise from 89.9% a year earlier. Analysts had expected a ratio of 90.90%.

Humana said the medical cost ratio was in line with its previous expectation of “just above 91%”.

The company posted adjusted quarterly profit of $3.24 per share, compared with analysts’ average estimate of $2.82 per share, according to data compiled by LSEG.

(Reporting by Sriparna Roy and Sneha S K in Bengaluru; Editing by Pooja Desai)