Elevance shares fell Wednesday following the release of its second-quarter results as it reported an increase in its medical loss ratio, an important measure of how much it spent on care.
Bloomberg reported the drop was the largest intraday decline in two years for Elevance, formerly known as Anthem.
The Indianapolis-based insurer reported a medical loss ratio of 87% compared with 86.8% from the second quarter of 2021. The medical loss ratio compares the amount an insurer collects in premiums to the amount it spends on medical care. Throughout the COVID-19 pandemic, the MLR has served as a signal on whether care has returned after patients put off medical appointments and procedures amid the outbreak.
Elevance said the MLR increase is attributable to a higher mix of members in government-sponsored plans, which tend to have higher MLRs.
Cowen Analyst Gary Taylor said in a Wednesday note that even though Elevance beat analyst expectations in a number of key metrics, the results “fall shy of the high expectations raised by [UnitedHealth Group]” last week.
Jefferies Analyst David Windley said UnitedHealth’s MLR beat was much higher and overshadowed Elevance’s. Windley characterized the sell-off as an “overreaction,” in a Wednesday note.
UnitedHealth Group reported that its insurance arm, UnitedHealthcare, had an MLR of 81.5%, a decrease from 82.5% during the prior-year period.
Patients have tended to delay care during COVID-19 surges, which typically offsets cost increases from infected patients who have sought care.
Increased Medicaid enrollment helped spur overall membership growth for Elevance during the second quarter. Continued pandemic flexibilities have increased Medicaid enrollment for a number of insurers.
Elevance raised its earnings forecast for the year and now expects to adjusted net income to be greater than $28.70 per share.
Shares closed Wednesday at $459.54 down from the prior close of $497.43.