(Reuters)—Health insurers WellPoint Inc. and Aetna Inc. posted quarterly profits above Wall Street targets and raised their full-year forecasts Wednesday, but WellPoint warned costs for its Medicare plans for seniors were higher than it expected this year.

Administrative cost cuts helped WellPoint, the No. 2 health insurer by market value, offset higher medical claim costs for its Medicare business.

The company wants to increase its presence in Medicare plans to capitalize on the post-war "baby-boom" population becoming eligible for the program, but WellPoint said its Medicare Advantage plans had enrolled many sicker seniors who use more services and therefore have higher costs.

The company said it would change its strategy for its Medicare Advantage plans for next year. But in the quarter, profit in its business that include Medicare plans tumbled 41.3%.

Overall, WellPoint's second-quarter profit, excluding items, topped analysts' average estimate by 3 cents, amounting to a 2% beat. Its new higher forecast for 2011 profit was nonetheless below Wall Street's target.

By contrast, Aetna, the No. 3 U.S. health insurer, exceeded expectations by about 25% in the quarter and raised its forecast above the average estimate of analysts.

WellPoint shares fell 4.9% in premarket trading, while Aetna shares rose 2.6%.

Health insurers have benefited this year from Americans postponing doctor visits and medical procedures during the weak economy. Moderated use of healthcare services has lowered medical claims, leading to stronger-than-expected financial performances.

The results, combined with greater investor comfort in the fallout of the U.S. health care overhaul, has spurred strong stock price gains this year. Through Tuesday, Aetna shares had risen about 40% and WellPoint has climbed nearly 30%, while the S&P 500 index is up only about 6%.

Last week, UnitedHealth Group Inc., the industry's largest company by market value, reported better-than-expected second-quarter results although it raised its forecast only to a level in line with analyst estimates.

WellPoint's second-quarter net income was $701.6 million, or $1.89 per share, compared with $722.4 million, or $1.71 per share, a year earlier, when the company had more shares outstanding.

Excluding items, earnings of $1.83 per share were 3 cents ahead of the analysts' average estimate, according to Thomson Reuters I/B/E/S.

Revenue rose 4.8% to $14.88 billion.

WellPoint projected a full-year profit in a range of $6.90 to $7.10 per share, or $6.75 to $6.95 per share excluding net investment gains. It previously projected full-year profit of "at least" $6.60 per share excluding investment gains.

Analysts have been looking for $7.12 for the year.

Aetna's second-quarter net income rose to $536.7 million, or $1.39 per share, from $491 million, or $1.14 per share, a year earlier.

Excluding items, earnings of $1.35 per share topped the average estimate of analysts by 27 cents, according to Thomson Reuters I/B/E/S.

Revenue slipped 2% to $8.32 billion.

Aetna raised its full-year forecast to a range of $4.60 to $4.70 per share, up from $4.20 to $4.30 previously. Analysts are looking for $4.39.

Both WellPoint and Aetna reported first-quarter profits that easily exceeded Wall Street estimates and raised their respective earnings forecasts for the year.