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UPDATE 3-UnitedHealth approaches 2021 cautiously on COVID-19 uncertainty, shares fall

(Adds company, analyst comments, updates shares)

Oct 14 (Reuters) - UnitedHealth Group Inc on Wednesday took a conservative stance toward its expectations for 2021, citing uncertainties related to the COVID-19 pandemic, but raised its profit forecast for this year after third-quarter earnings beat estimates.

Shares of the largest U.S. health insurer were down about 2%. Shares of rivals Anthem Inc, Centene Corp and Humana Inc fell slightly after UnitedHealth reported its results.

“The pandemic and related economic impacts remain difficult to predict and, at this instance, likely represent a significant potential headwind,” UnitedHealth Chief Executive David Wichmann said on a conference call.

The company said it expects a strong performance from its Medicare Advantage plans for the disabled and people aged 65 and older, and backed its long-term view for 13% to 16% earnings growth.

The company’s conservative stance is “not particularly surprising given the unprecedented environment we’re in right now in terms of COVID-19,” said Stephens analyst Scott Fidel. “We wouldn’t be surprised if other (health insurers) also cited the macro uncertainties that everyone knows exist.”

UnitedHealth is the first among large U.S. health insurers to report third-quarter earnings.

For the quarter, the company reported a medical loss ratio (MLR) - the percentage of premiums paid for medical services - of 81.9%, lower than last year’s 82.4% and analysts’ estimate of 83.55%, according to Refinitiv data.

The MLR was closer to normal after hitting 70.2% in the second quarter, but demand for healthcare services remained below pre-pandemic levels, Evercore ISI analyst Michael Newshel said.

The company said healthcare use was running at 95% of typical levels, with some categories approaching normal after a second-quarter during the height of coronavirus lockdowns, when people were avoiding doctors and hospitals.

It reported adjusted third-quarter earnings of $3.51 per share, topping analysts’ estimates of $3.09.

The company raised its annual 2020 adjusted profit forecast to $16.50 to $16.75 per share from a previous range of $16.25 to $16.55 per share.

Reporting by Manojna Maddipatla in Bengaluru and Caroline Humer in New York; Editing by Vinay Dwivedi and Bill Berkrot