(Reuters) -Molina Healthcare cut annual profit forecast for the second time this month as it expects higher medical care costs to weigh on the health insurer’s results, sending its shares down 7% in extended trading.
Health insurers offering government-backed health plans, including Medicare for older adults and Medicaid for the low-income population, have faced higher-than-expected medical claims over the past two years, increasing their costs.
Molina and larger peer Elevance Health both cut their annual profit forecasts earlier this month, while industry bellwether UnitedHealth suspended its annual forecast due to persistently high medical costs.
The company now expects adjusted full-year profit to be at least $19.00 per share, compared to its previous range of $21.50 to $22.50 per share.
The cut is “disproportionately attributed” to Molina’s marketplace health insurance plans and medical cost trend assumptions for the second half of the year, the company said.
Adjusted profit for the second quarter came in at $5.48 per share, below analsyts’ average estimate of $5.79 per share, according to data compiled by LSEG.
(Reporting by Mariam Sunny in Bengaluru; Editing by Mohammed Safi Shamsi)
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