Elevance Health reported profit of nearly $6 billion in 2024, including $413 million in the fourth … (+)
Elevance Health reported nearly $6 billion in profits in 2024, including $418 million in the fourth quarter as the health insurer worked to overcome rising medical spending by patients in its Medicaid plans.
Elevance, which manages Blue Cross and Blue Shield health plans in 14 states as well as government-subsidized Medicaid benefits for the poor and Medicare Advantage plans for seniors, was in difficulty like other health insurers control costs in the face of an influx of patients seeking medical treatment. Health insurers are seeing an increase in claims submitted by patient executives, which executives say is due in part to pent-up demand for medical care postponed during the Covid-19 pandemic. In Elevance’s case, the company is experiencing an influx of sick patients insured by Medicaid.
Elevance’s benefit-to-expense ratio, which is the percentage of premium revenue spent on medical costs, has increased dramatically. The health insurer’s benefit expense ratio was “92.4 percent in the fourth quarter, an increase of 320 basis points from the prior year period, and 88.5 percent for for the full year, an increase of 150 basis points year-on-year,” the company said. in its earnings report released Thursday.
Those rising costs helped cut fourth-quarter net income in half, to $418 million, or $1.81 per share, from $856 million, or $3.63 per share. For full-year 2024, net income was largely flat at $5.98 billion, or $25.68 per share, compared with $5.987 billion, or $25.22 per share in 2023. Total revenue increased 6.6% to $45.4 billion in the fourth quarter and 3.3% to $177. billion for all of last year.
Elevance Health ended the year with fewer health plan members, largely due to a decline in Medicaid customers.
The end of the public health emergency in the United States in May 2023, after three years of the COVID-19 pandemic, has impacted health insurers who have significant activity in administering Medicaid coverage for States, which have made what are called “Medicaid redeterminations.” Medicaid redetermination, also described as Medicaid renewal or Medicaid recertification, essentially involves asking people to prove that they are qualified for such coverage.
Elevance’s medical memberships decreased 2%, or 1.1 million, to 45.7 million as of December 31, 2024, “due to attrition in our Medicaid business, partially offset by growth in paid and paid activities of employer groups. Enrollment in the Affordable Care Act health plan.
“As part of our commitment to elevating total health and advancing health beyond healthcare, we deliver value to the members and healthcare providers we serve by ensuring care is simple, affordable and accessible said Gail Boudreaux, CEO of Elevance Health, in a statement accompanying her report. income report. “Our fourth quarter results demonstrate tangible progress in improving our operations in response to the dynamic environment the industry is facing. As we look toward 2025, we remain steadfast in our goal to simplify the healthcare experience, deepen Carelon’s impact, and deploy innovative care models, positioning us to achieve sustainable growth across the long term.
To be sure, the company’s Carelon business, which includes medical providers and pharmacy benefit management business CarelonRx, reported a 19% increase in operating revenue to $14.7 billion as of fourth quarter 2024.
“Operating revenue was $53.9 billion in 2024, an increase of $5.9 billion, or 12 percent,” the company said of Carelon. “The increases for the quarter and year are due to the launch and growth of risk-based capabilities at Carelon Services. and acquisitions finalized in 2024.”