Dive Brief:
- Elevance is consolidating control of its health insurance businesses under Felicia Norwood, its head of government benefits, as the company looks to improve coordination across its Medicaid, Medicare and commercial plans and — hopefully — bolster waning profits.
- Mark Kaye, Elevance’s CFO, will also take on leadership of health services division Carelon as current president Peter Haytaian leaves to spend more time with his family, according to a press release Thursday announcing the executive changes.
- Haytaian will leave the role effective May 4 and stay on as an advisor through the end of the year. The executive first joined Elevance in 2012 through its acquisition of Amerigroup before becoming president of Carelon in 2021.
Dive Insight:
Like its peers, Elevance has struggled with flagging margins in government programs as higher medical utilization is met with what payers argue is inadequate reimbursement in Medicare and Medicaid. Spending is also rising in Affordable Care Act plans, too — a stressor insurers expect to be exacerbated this year after Congress allowed more generous subsidies for Affordable Care Act coverage to expire.
In January, Elevance told investors it expects revenue and profit to fall in 2026. The company’s stock plummeted after its outlook was released, and remains down 10% year to date. Still, despite the pressures, Elevance maintains it should be able to grow earnings in 2027 — in large part thanks to Carelon, which has continued to outperform expectations for revenue and earnings growth.
Elevance has worked to beef up Carelon, especially the division’s capabilities in the lucrative pharmacy space. Elevance added two veterans of the pharmaceutical industry to Elevance’s board last year.
And appointing Norwood as Elevance’s first chief health benefits officer and giving Kaye oversight of Carelon will “support disciplined execution and help us move with greater clarity and coordination as we continue to scale,” Elevance CEO Gail Boudreaux said in a statement Thursday.
An Elevance spokesperson did not respond to a request for comment on when the changes go into effect.
