(Reuters) - UnitedHealth (NYSE:UNH) 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.