(Reuters) - Molina Healthcare on Wednesday beat Wall Street estimates for third-quarter profit as a rise in memberships offset higher medical costs caused by a rebound in elective surgeries.
Health insurers and analysts had warned of a jump in medical costs earlier this year following a resumption in elective surgeries like hip and knee replacements that were delayed by the pandemic, especially among older patients.
Molina's quarterly medical loss ratio, or the percentage of premiums paid out for medical services, was 88.7%, compared with LSEG estimates of 88.34%.
Reflecting a higher utilization of outpatient, professional, and in-home services, Molina's medical loss ratio in its Medicare health insurance segment was 92.4%, more than the company's expectation.
The government-backed Medicare program helps cover medical costs for people over 65 years of age or those with certain disabilities.
Molina's main business is Medicaid insurance, which is a government-backed plan offered by private companies for people with limited income and resources.
Memberships for its Medicaid plans rose 2% to 4,757,000 in the quarter from last year, while Medicare grew 11.6% to 173,000, the company said.
The health insurer reported an adjusted profit of $5.05 per share for the quarter ended Sept. 30, beating analysts' estimates of $4.88 per share, according to LSEG data.
The company reaffirmed its annual profit forecast of at least $20.75 per share. Analysts estimate 2023 profit of $20.82.
(Reporting by Khushi Mandowara in Bengaluru; Editing by Devika Syamnath)