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UPDATE 2-Health insurer Anthem raises 2021 profit forecast after upbeat second quarter

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(Adds analyst estimates)

July 21 (Reuters) - Anthem Inc beat Wall Street estimates for second-quarter profit and marginally raised its 2021 earnings target, as the health insurer reported lower-than-expected medical costs despite a rebound in demand for non-COVID healthcare services.

The company said on Wednesday it expected to earn over $25.50 adjusted earnings per share this year, compared to its previous estimate of over $25.10.

Most U.S. health insurers have been conservative in their 2021 outlooks as they anticipate more uncertainty due to the impact of virus variants and new infection outbreaks in some parts of the country, especially in areas with low vaccination rates.

Bigger rival UnitedHealth Group last week raised its 2021 adjusted profit forecast for the second time this year, but stuck to its expectation to record $1.80 per share of hit from COVID-19.

Anthem said its benefit expense ratio - the percentage of premiums paid for medical services - worsened to 86.8% in the second quarter, from 77.9% a year earlier. Analysts on average expected 87.78%, according Refinitiv IBES data.

The increase was driven by a jump in non-COVID and COVID-19 related healthcare costs, including vaccine administration and testing, as compared to relatively depressed levels in the same quarter a year ago, the company said.

Excluding items, Anthem earned $7.03 per share in the quarter ended June 30, ahead of the average analyst estimate of $6.33 per share.

Operating revenue in the company's pharmacy benefits management business jumped 18% to $6.22 billion.

(Reporting by Manojna Maddipatla in Bengaluru; Editing by Sriraj Kalluvila)