(Adds company comment from conference call, updates shares)
July 15 (Reuters) - UnitedHealth Group Inc on Wednesday warned of rising costs later this year as Americans catch up on less urgent surgeries delayed by the coronavirus pandemic but stuck to its full-year forecast after posting a near 102% surge in quarterly profit.
Shares of UnitedHealth, the first U.S. health insurer to report second quarter results, fell as much as 2.7%.
Hospitals rescheduled elective surgeries to reduce the burden on the healthcare system as coronavirus cases surged, while some patients canceled appointments to avoid the potential of contracting the respiratory illness caused by the virus.
As a result, the company’s medical loss ratio - the percentage of premiums paid out for medical services - plunged to 70.2% in the quarter ended June 30, compared with Refinitiv IBES estimates of 78.38%.
UnitedHealth, however, maintained its full-year adjusted profit forecast, saying demand for healthcare began to recover in May and approached more typical levels by quarter-end.
Inpatient care, inclusive of COVID-19 related care, recovered to nearly 95% in June, the company said, with outpatient and physician services tracking at 90% of normal levels towards the end of June.
“These national trends have continued thus far in July, even as certain states are seeing short-term deferral of services where there are elevated levels of infection,” Chief Financial Officer John Rex said during a post-earnings call.
UnitedHealth said results are expected to be weighed by assistance measures already taken, like the $1.5 billion in premium credits and other discounts given to some members.
The company said growth in its core business that sells health insurance plans was hurt by a decline in the number of people who subscribed to its employer-sponsored health plans due to job losses during the pandemic.
The drop, however, is lower than the unemployment data might suggest as many employers continued benefits coverage for furloughed employees, Rex said.
Reporting by Manojna Maddipatla in Bengaluru and Caroline Humer in New York; Editing by Sriraj Kalluvila and Chris Reese
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