By Sneha S K and Sriparna Roy

(Reuters) -Elevance Health ( ELV ) on Tuesday beat Wall Street estimates for third-quarter profit as the health insurer managed to keep medical costs in check, sending its shares 3% higher in premarket trading.

Several insurers such as Elevance, UnitedHealth and Centene have warned of elevated costs across government-backed plans following increased demand for healthcare across the United States over the last two years.

Despite a dynamic healthcare environment, Elevance's results were in line with expectations and reflected the company's disciplined execution across its platforms, CEO Gail Boudreaux said.

"As we plan for 2026, we remain disciplined in managing what we can control."

The company is the first major health insurer to report third-quarter earnings.

Elevance had in July flagged elevated medical costs in its individual plans that conform to the Affordable Care Act, also known as Obamacare, and its Medicaid plans for low-income people.

The costs for the quarter were "elevated, but expected" and higher mainly due to its Medicare business, the company said on Tuesday.

Elevance reported a quarterly medical loss ratio, the percentage of premiums spent on medical care, of 91.3%, higher than 89.5% in the same period last year, but not as bad as analysts' estimates of 91.73%.

"Investors are relieved that the story is not deteriorating further after a disastrous second quarter when guidance cuts at Elevance and other industry players tested investor resolve," said Morningstar analyst Julie Utterback.

Quarterly operating revenue for Carelon, under which Elevance operates its pharmacy benefit management unit, rose about 33% to $18.3 billion, helped by recent acquisitions in home health and pharmacy services.

Elevance also reaffirmed its 2025 adjusted profit forecast of about $30 per share, as well as its medical loss ratio to be at 90%.

The company's quarterly adjusted profit per share of $6.03 beat estimates of $4.93, as per data compiled by LSEG.