(Reuters) – UnitedHealth on Wednesday forecast medical costs for 2025 above Wall Street expectations as it expects high demand for healthcare services in its government-backed insurance businesses to persist.
U.S. health insurers have grappled with higher medical costs related to their Medicare Advantage plans over the last one year as older adults seek non-urgent medical care they had postponed during the pandemic.
Changes in enrollment norms for Medicaid plans for low-income people and lower payment rates by government also weighed on insurers.
UnitedHealth expects 2025 medical cost ratio – the percentage of premiums spent on medical care – to be in the range of 86% to 87%, the midpoint of which was above analysts’ estimates of 84.77%, according to data compiled by LSEG.
The company also forecast adjusted profit for 2025 largely in line with Wall Street estimates on Tuesday.
(Reporting by Mariam Sunny and Leroy Leo in Bengaluru; Editing by Anil D’Silva)
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