(Reuters) -Molina Healthcare beat Wall Street estimates for fourth-quarter profit on Wednesday, benefiting from higher premiums and lower-than-expected medical costs.
Medical costs for health insurers were elevated in 2023, and rivals such as UnitedHealth, Humana and CVS’ Aetna unit had flagged a rise in medical costs in the reported quarter.
Molina’s quarterly medical loss ratio, or the percentage of premiums paid out for medical services, was 89.1%, compared with analysts’ estimate of 90%.
The company’s revenue from premiums rose 5.6% to $8.36 billion, and its total revenue of $9.05 billion beat analysts’ expectations of $8.37 billion, according to LSEG data.
Molina sees its 2024 medical loss ratio to be 88.2%, versus analysts’ estimate of 88.4%.
The company expects 2024 adjusted profit to be at least $23.5 per share, versus LSEG estimates of $23.57 apiece.
The health insurer’s main business is Medicaid insurance, a government-backed plan for low-income people.
Memberships for Medicaid plans fell 4.5% to 4.5 million from a year-ago period, while that for Medicare grew 10.3% to 172,000, the company said.
Molina reported adjusted profit of $4.38 per share for the quarter ended Dec. 31, above analysts’ estimate of $4.35.
(Reporting by Puyaan Singh and Pratik Jain; Editing by Shilpi Majumdar and Sherry Jacob-Phillips)
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