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Health insurance group Humana (NYSE:HUM) reported a bump in second-quarter medical costs that was lower than anticipated despite strong demand for surgeries following the COVID-19 pandemic, boosting profit above estimates.

Humana, along with peer UnitedHealth (NYSE:UNH), warned in June that medical expenses would jump in 2023 as more patients go ahead with elective procedures that had been delayed by the pandemic. Staffing shortages and health restrictions meant that many surgeries, particularly those on older adults at greater risk of contracting severe COVID-19, were previously put on hold.

Analysts have also noted that aging in the so-called “baby boomer” generation — the cohort born from 1946 to 1964 – as well as elevated life expectancies are adding pressure on health insurers’ returns.

Humana’s benefit expense ratio – a gauge of how much premium dollars the company’s health plans spend on medical claims – grew to 86.3% in the second quarter, but was still below Bloomberg consensus estimates of 86.8%. The figure stood at 85.8% in the corresponding three-month period in 2022.

Quarterly adjusted earnings per share rose to $8.94, topping forecasts for profit per share of $8.83.

Shares in Humana increased by more than 2% in premarket U.S. trading following the results.