Photo: Issarawat Tattong/Getty Images
The pain continues for health insurers as they report revenue and earnings below expectations, driven by high medical costs and a low Medicare Advantage reimbursement rate.
Elevance Health, formerly Anthem, reported Q4 earnings Wednesday, a day after UnitedHealth Group gave its 2025 earnings and 2026 forecast.
On Monday, the Centers for Medicare and Medicaid Services released the Advance Notice on Medicare Advantage payment, a rate UnitedHealthcare CEO Tim Noel called "disappointing."
Elevance reported an adjusted operating loss of $0.2 billion in the fourth quarter of 2025 and an adjusted operating gain of $4.2 billion for the full year. Adjusted operating results in both periods were impacted primarily by higher medical cost trends, the company said.
The managed care insurer reported an increase in the benefit-expense ratio – the proportion of premiums paid out for medical care – by 110 basis points year-over-year to 93.5% during the quarter. This was primarily due to higher medical cost trends, especially for Affordable Care Act health plans.
Elevance Health shares dropped on Wednesday morning after the company projected a drop in its annual revenue for 2026, according to Seeking Alpha.
Elevance reported $49.3 billion in revenue for Q4, with an estimated 10% year-over-year growth, falling short of the consensus by $130 million, the report said, citing Bloomberg data.
Elevance is rated an estimated fourth in the Medicare Advantage market and is heavily invested in Medicaid.
Medical membership totaled approximately 45.2 million as of Dec. 31, 2025, a decrease of 0.5 million, or 1%, driven by attrition in its Medicaid business.
Elevance's Medicaid-led peers Centene and Molina Healthcare also traded lower, according to Seeking Alpha.
"As we enter 2026, our focus is on advancing affordability and making healthcare easier to access and navigate for the members we serve," Elevance CEO Gail Boudreaux said.
Elevance reported operating revenue of $49.3 billion in the fourth quarter of 2025, an increase of $4.3 billion, or 10%, compared with the prior-year quarter.
Total operating revenue for 2025 was $197.6 billion in 2025, an increase of $22.4 billion, or 13%. Elevance said the increases in revenue for the quarter and year were driven by higher premium yields in its Health Benefits segment, contributions from acquisitions, and growth in Medicare Advantage membership, partially offset by membership attrition in its Medicaid business.
Health Benefits is composed of Individual, Employer Group risk-based, Employer Group fee-based, BlueCard, Medicare, Medicaid and Federal Employee Program businesses.
Email the writer: SMorse@himss.org
You must be logged in to post a comment.