Coventry Profit Falls 45 Percent
From the Associated Press
Health insurer Coventry Health Care said second-quarter profit fell 45 percent, to $83.2 million (55 cents a share) from $151.3 million (96 cents), as medical costs climbed, particularly in Medicare Advantage plans. Revenue at the Bethesda company rose 28 percent, to $2.98 billion, but the growth was more than offset by a second straight quarter of sharp growth in medical expenses.
Coventry's medical expenses rose 41 percent, to $2.27 billion. Coventry said its medical loss ratio, which measures the amount of premium dollars spent on medical care, rose to 85.8 percent from 79.6 percent. The most rapid cost increases came from Medicare Advantage plans, where the loss ratio jumped to 93.2 percent from 79.3 percent. Coventry's premium revenue grew 31 percent to $2.64 billion, and management services revenue rose 6 percent to $334.2 million.
Coventry maintained its full-year profit forecast of $3.65 to $3.75 per share.
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