Dive Brief:
- Elevance Health increased its operating revenue by nearly 11% year over year to reach $42 billion in the first quarter of 2023 as it focused on recapturing members coming off of Medicaid after redeterminations resumed in early April.
- The payer posted a medical loss ratio of 85.8% and boosted its earnings guidance for the full year as it beat Wall Street expectations on earnings and revenue.
- Elevance, formerly known as Anthem, said it was pleased with the recent CMS decision to phase in risk adjustment changes to the Medicare Advantage program that would allow it to "smooth the impact" to beneficiaries and providers.
Dive Insight:
Elevance's health services segment, Carelon, had an operating gain of more than 20%, and SVB Securities analysts noted that the insurer "continues to find success penetrating its own captive health plan business."
CEO Gail Boudreaux, in a conference call with investors Wednesday morning, said payment cycles were “more reasonable” than during the COVID-19 pandemic due to premium rate adjustments.
Gains in individual and Medicaid membership drove total membership up nearly 3% year-over-year to 48 million.
Profit was up 11% year over year at $2 billion, as COVID-19 costs were lower than estimated and the U.S. experienced a relatively mild flu season.
States have recently been allowed to resume Medicaid enrollment redeterminations put on hold during the pandemic, which could result in as many as 15 million people losing coverage.
Elevance executives said Wednesday that they are meeting with state partners weekly to work on outreach to beneficiaries through programs like mobile initiatives and “are pleased to see the engagement” as they try to transition members to commercial programs.
In February, Elevance announced it had closed a deal to acquire specialty pharmacy BioPlus for an undisclosed sum, adding to the the pharmacy benefit management segment CarelonRx, which sits under Carelon.
In November, Boudreaux said at an industry conference that the payer will “aggressively” pursue more M&A deals into adjacent care services.
Elevance is the second health insurer to report first-quarter earnings. UnitedHealth Group last week posted record revenue in the quarter of nearly $92 billion off its payer arm UnitedHealthcare and its health services segment Optum.