Anthem’s quarterly profit beat Wall Street predictions on Wednesday, driven by lower medical costs as people delayed non-essential procedures during the COVID-19 outbreak.
Shares of the second largest health insurer in the US rose more than 6%, according to a Reuters report.
Patients began to reschedule delayed surgeries as states reopened, the newswire reported. Healthcare utilization reached about 90% of pre-COVID-19 levels in June, after falling 40% below expectations in April, according to Anthem.
“We have seen an increase in procedures such as joint replacement surgeries,” Anthem CEO John Gallina said on a conference call. “Some things can only be delayed so long until the pain or the severity is so significant that the person is going to go in and actually get the procedure.”
Anthem expects to have to pay out more for medical services in the second half of the year due to this increase, Reuters reported.
For the second quarter, the percentage of premiums collected that went to medical expenses improved to 77.9% from 86.7% in Q2 2019. Anthem maintained its full-year adjusted profit outlook of more than $22.30 per share, according to Reuters. However, it did not provide any other forecasts, citing pandemic-related uncertainty.