Elevance Health, the parent of Blue Cross and Blue Shield health insurance plans in 14 states, ... [+]
Elevance Health reported a first quarter profit of $2.2 billion as strong growth in sales of commercial health insurance and healthcare services offset a big decrease in Medicaid enrollment.
Elevance, which sells government and commercial health insurance including Blue Cross and Blue Shield plans in 14 states, Thursday reported first quarter net income jumped 12.2% to $2.2 billion compared to $2 billion in the year-ago quarter.
Total revenue rose 1% to $42.6 billion as growth in other health benefits businesses made up for most of the loss in Medicaid members and the company’s Carelon health services business performed well. Elevance’s membership fell by 1.9 million, or 4%, to 46.2 million as of March 31, 2024 compared to a year ago due largely to the end of a COVID-19 pandemic-era coverage provision that kept people covered by Medicaid.
The end of the U.S. Public Health Emergency in May after three years of the COVID-19 pandemic is impacting health insurers that have a significant business administering Medicaid coverage for states, which are conducting so-called “Medicaid redeterminations.” Medicaid redetermination, also described as Medicaid renewal or Medicaid recertification, is essentially when people are asked to show they are qualified for such coverage.
In Elevance’s case, Medicaid enrollment dropped 21.5% to 9.3 million in the first quarter compared to a 11.9 million in the year-ago period due to what Elevance’s earnings report described as “attrition in our Medicaid business associated with eligibility redeterminations and expected footprint adjustments.”
“These membership losses were partially offset by growth in our commercial employer group fee-based, Affordable Care Act and BlueCard membership,” Elevance said.
Still, Elevance’s profits and continued growth are figured in the company’s forecast for increased profits with diluted earnings per share now forecast for $34.05 and adjusted net income now expected to be $37.20 per share.
“First quarter results reflect disciplined execution of our strategic initiatives during a dynamic time for our industry,” said Gail K. Boudreaux, Elevance Health’s chief executive officer. “We are making significant progress expanding Carelon’s capabilities.”
To be sure, Carelon, which include’s the company’s pharmacy benefit management company (PBM) CarelonRx and other health services, reported an “operating gain” of $800 million in the first quarter, “an increase of $72 million, or 10 percent, primarily driven by improved performance on certain risk-based arrangements and Carelon services. Earlier this week, Elevance Health announced a deal with the private equity firm Clayton, Dubilier & Rice to “advance primary care delivery.”
