By Sriparna Roy and Unnamalai L

(Reuters) - Centene beat Wall Street estimates for third-quarter earnings on strength in its commercial health insurance plans and maintained its annual profit forecast, easing investor fears after dour targets from rivals last week.

Shares of the health insurer jumped more than 12% to $69.32 in premarket trading on Friday. They fell 16% since last week after rivals Elevance and UnitedHealth warned of high costs in government-backed insurance plans.

Costs for insurers providing Medicaid plans have been elevated after a federal policy that required insurers to keep low-income Americans enrolled in health plans during the COVID-19 pandemic ended last year, and left the insurers with more sick patients.

The quarter was "much better than expected", said Baird analyst Michael Ha, adding that it was a "surprise" after peers reported "unprecedented levels" of Medicaid pressure last week.

Costs related to Medicare plans for those aged 65 and older have also been higher, due to an increase in demand for healthcare services as older people catch up on procedures delayed during the pandemic.

Centene reported a medical loss ratio — the percentage of premiums spent on medical care — of 89.2% for the quarter ended Sept. 30, compared with analysts' estimate of 88.03%, according to data compiled by LSEG.

For the full year, it expects the ratio, a key metric to track medical costs, between 88.3% and 88.5%. Analysts expect a ratio of 87.93%.

Despite estimated higher costs, the company maintained its annual profit forecast of greater than $6.80 per share, compared with analysts' expectation of $6.73.

Investors had been preparing for a potential cut to Centene forecast, said Stephens analyst Scott Fidel.

On an adjusted basis, the health insurer earned $1.62 per share in the third quarter, compared with analysts' average estimate of $1.33.

(Reporting by Amina Niasse in New York City, Sriparna Roy and Unnamalai L in Bengaluru; Editing by Shilpi Majumdar and Shinjini Ganguli)