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Tight rein on prices helps UnitedHealth beat revenue expectations, increase forecast By Reuters 

© Reuters. FILE PHOTO: The company brand of the UnitedHealth Group seems on the aspect of one in every of their workplace buildings in Santa Ana, California

By Manojna Maddipatla

(Reuters) – UnitedHealth Group Inc (NYSE:) on Thursday raised its 2021 adjusted revenue goal, as tight management on medical prices helped the most important U.S. well being insurer handily beat first-quarter revenue estimates, sending shares up greater than 4%.

The trade bellwether’s outcomes lifted shares of rivals. Anthem Inc was up 3%, Cigna Corp (NYSE:) up 1% and Humana Inc (NYSE:) up 3%.

Well being insurer medical prices have been fluctuating for the reason that coronavirus outbreak as {dollars} saved on sufferers delaying care and procedures early within the pandemic was later offset by increased bills associated to testing, therapy and vaccination in opposition to COVID-19.

Graphic: UnitedHealth’s medical prices pattern beneath estimates throughout pandemic

UnitedHealth benefited from a decline in COVID-19 prices in the course of the latter half of the primary quarter after a wave of infections and hospitalizations waned.

“To place this in perspective, February and March confirmed COVID-related care at about half the extent skilled in January,” Chief Monetary Officer John Rex stated throughout a post-earnings name.

In April, the corporate started to see one other rise in COVID-19 associated care, although not but approaching January ranges, he added.

UnitedHealth’s medical loss ratio – the share of premiums paid out for medical companies – was 80.9% for the quarter ended March 31, decrease than the 82.9% consensus forecast by analysts, in line with Refinitiv IBES knowledge.

UnitedHealth’s first quarterly earnings since new Chief Government Officer Andrew Witty took the reins in February will reset Wall Road expectations for all well being insurers this quarter, some analysts stated.

UnitedHealth now initiatives 2021 adjusted earnings of $18.10 to $18.60 per share, up from its earlier forecast of $17.75 to $18.25.

The corporate stated it expects to document a majority of its beforehand forecast $1.80 per share hit from COVID-19 prices within the again half of the 12 months.

Well being insurers throughout the board will nonetheless seemingly stay comparatively conservative round their expectations for the way healthcare exercise may play out over the remainder of the 12 months, Stephens analyst Scott Fidel stated.

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