Aetna Inc, the third-largest U.S. health insurer by membership, raised its 2015 forecast for operating earnings after enrollment increased 6 percent last year.
The company said it expected full-year operating earnings of at least $7.00 per share, up from its previous forecast of $6.90.
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Aetna also reported an improved medical benefit ratio of 83 percent for the fourth quarter, compared with 83.9 percent a year earlier. The ratio is the amount an insurer spends on medical claims compared with its income from premiums.
The company said the medical benefit ratio for commercial plans, its largest business, deteriorated to 82 percent from 81.7 percent, due to higher-than-expected medical costs in small businesses and expenses associated with the new hepatitis C treatments.
Aetna's top competitors UnitedHealth Group Inc and Anthem Inc <A NTM.N>, formerly known as WellPoint Inc, said they were preparing for a small rise in medical spending in 2015.
Aetna said its membership rose to 23.5 million at the end of 2014 from 22.2 million a year earlier.
The company reported operating earnings of $1.22 per share for the quarter ended Dec. 31, largely in line with average analyst estimates, according to Thomson Reuters I/B/E/S.
Revenue of $14.77 billion beat the average estimate of $14.60 billion.
Net profit fell to $232 million, or 65 cents per share, in the quarter, from $368.9 million, or $1.00 per share, a year earlier.
Net income includes charges of 57 cents per share.
Operating expenses rose to $3.07 billion from $2.51 billion a year earlier.
The company's shares, which closed at $92.22 on the New York Stock Exchange on Monday, were marginally up before the bell on Tuesday. (Reporting by Caroline Humer in New York and Amrutha Penumudi in Bengaluru; Editing by Don Sebastian)