Oct. 20 (Reuters) – Anthem Inc (ANTM.N) on Wednesday raised its full-year profit outlook for the third time this year, and expects less to dampen COVID-19 profits next year as infections decline, sending US health insurer stocks to an all-time high.
Anthem’s comments echoed its biggest rival UnitedHealth Group Inc (UNH.N) and allayed some concerns that the recent increase in COVID-19 cases in the United States linked to the Delta variant would increase the medical costs of health insurance companies.
These costs have fluctuated since the coronavirus outbreak, with the decrease in spending due to delays in elective procedures being offset by an increase in the direct costs of COVID-19 treatment and testing.
Anthem, like UnitedHealth, has raised its profit forecast for 2021 after beating third-quarter profit estimates due to lower-than-expected medical costs.
UnitedHealth also said last week that it expected the pandemic to have less of an impact on its profits next year as infections decline and more people get vaccinated. Read more
Anthem, however, said higher testing and vaccinations will likely keep medical costs above usual levels throughout the fourth quarter.
“The Delta variant is still here, and we want to be very respectful of it and any other new variants that may or may not exist,” said CFO John Gallina.
The comments come as the United States is set to approve booster shots from Moderna (MRNA.O) and Johnson & Johnson (JNJ.N). Read more
The second-largest U.S. health insurer said it now expects adjusted earnings for this year to exceed $ 25.85 per share, down from an earlier forecast of more than $ 25.50.
Stephens analyst Scott Fidel said Anthem and UnitedHealth’s expectations were “reasonable given the current situation with vaccinations coming in 2022”.
Anthem shares rose nearly 7% to $ 422.72 by late morning.
Reporting by Leroy Leo and Manojna Maddipatla in Bengaluru; Editing by Ankur Banerjee and Tomasz Janowski
Our Standards: The Thomson Reuters Trust Principles.
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