(Reuters) -Humana beat Wall Street estimates for third-quarter profit on Wednesday, buoyed by strength in its government-backed Medicare Advantage insurance business for older adults.
The health insurer relies heavily on Medicare Advantage plans, through which the U.S. government pays private insurers a fixed rate to manage healthcare for people aged 65 and older or those with disabilities.
Humana reported a medical cost ratio of 89.9%, up from 86.6% a year earlier. This ratio, which tracks costs, represents the percentage of premiums spent on medical care.
Analysts had expected the medical cost ratio to be 89.94% for the quarter.
On an adjusted basis, the company reported a profit of $4.16 per share, higher than the average analyst estimate of $3.40, according to data polled by LSEG.
The Louisville, Kentucky-based company reported a quarterly adjusted revenue of $29.3 billion beating estimates of $28.67 billion.
(Reporting by Sriparna Roy in Bengaluru; Editing by Shinjini Ganguli and Tasim Zahid)
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