This health insurer's revenue grew 1.4% year-over-year to $50.47 billion.
Elevance Health posted second-quarter revenue growth and raised its full-year profit forecast.
Key Points
Elevance Health disclosed that its health insurance membership fell by 1% sequentially at the end of June, dropping to 44.9 million people.
The company's reported shrinkage in second-quarter membership highlights the operational pressures facing major insurers. To counter rising government healthcare spending, insurers continue to raise premiums for products tied to the Affordable Care Act.
The stock fell 7.8% in pre-market trading to $393.50.
The health insurer stated on Wednesday that its total health plan membership decreased by 469,000 people by the end of June, a 1% drop, bringing the total to 44.9 million; this metric also fell 1.5% year-over-year.
The company attributed the membership decline primarily to adjustments in its commercial, fully-insured customer business, as well as attrition in its Affordable Care Act and Medicaid membership.
Membership in Medicare Advantage plans fell by 15.9%, leaving just 1.9 million members.
Medicaid membership decreased by 4.3%, to 8.4 million.
This year, premiums for many Affordable Care Act plans have risen by double-digit percentages, with insurers planning further significant hikes for next year. Insurers state that higher current medical costs and reduced federal subsidies are putting pressure on operations.
It has been reported that Elevance raised premiums by up to 24% in some states and has already requested permission for premium increases of up to 17% for 2027.
The company's fiscal second quarter ended in June, with net income for the period at $1.46 billion, or $6.71 per share; net income for the same period last year was $1.74 billion, or $7.72 per share.
Excluding one-time gains and losses, adjusted earnings per share were $7.45, surpassing the $6.21 expected by analysts surveyed by FactSet.
Total revenue increased 1.4% year-over-year to $50.47 billion, exceeding Wall Street expectations of $48.844 billion; operating revenue, which excludes net investment income and gains/losses on financial instruments, rose slightly by less than 1% to $49.83 billion.
Revenue was driven by improved premium yields in the company's Health Benefits segment, but growth was tempered by membership declines in Medicare Advantage, Medicaid, and Employer Group risk-based plans.
The industry's key core metric, the benefit expense ratio (medical costs as a percentage of premium revenue), rose to 89.7% from 88.9% a year ago.
Elevance indicated that the increase in the benefit expense ratio was primarily due to improved performance in its individual Affordable Care Act business compared to last year; this benefit was partially offset by an expected rise in medical costs for its government healthcare business.
The Indianapolis-based company raised its full-year guidance, now expecting full-year adjusted earnings per share of at least $27, compared to the current analyst consensus estimate of $26.87.
The company also plans to increase investments in medical cost management, member service experience, and provider network systems.
CEO Gail Boudreaux stated that the latest results and guidance update demonstrate management's confidence in achieving its goal: growing adjusted earnings per share by at least 12% in 2027 compared to 2026.
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