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CVS Health profit falls 6.5% on higher medical costs

(Reuters) -CVS Health Corp reported a 6.5% fall in quarterly profit on Wednesday, hit by higher costs at its health insurance unit as demand for non-COVID healthcare services normalized.

Health insurers saw lower medical costs during the initial phase of the pandemic, as people deferred elective medical procedures, however, widespread vaccinations have led to demand for non-COVID healthcare services normalizing.

CVS Health said its medical benefit ratio (MBR), the percentage of premiums paid for medical services, rose to 84.1% from 70.3% last year. A lower MBR is better for health insurers as it signals a tight rein on medical costs.

Net income attributable to the company fell to $2.78 billion, or $2.10 per share, in the second quarter ended June 30, from $2.98 billion, or $2.26 per share, a year earlier.

The company raised its adjusted profit per share outlook to $7.70 to $7.80, from $7.56 to $7.68 after it reported a 11.1% increase in quarterly revenue to $72.6 billion.

(Reporting by Amruta Khandekar and Manojna Maddipatla in Bengaluru; Editing by Shounak Dasgupta)


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