Despite rising costs in its health plans, Elevance Health reported more than $2 billion in first … More
Despite rising costs in its health plans, Elevance Health reported more than $2 billion in first quarter net income thanks to growth across its health plans and Carelon health services business.
Elevance, which operates Anthem brand Blue Cross and Blue Shield plans in 14 states and sells an array of government-subsidized benefits, Tuesday said net income fell nearly 3% to $2.18 billion in the first quarter ended March 31, compared to $2.24 billion in the first quarter of 2024.
Like other health insurance plans, Elevance is seeing rising costs, reporting that its benefit expense ratio, which is the percentage of premium revenue that goes toward medical costs, was 86.4% in the first quarter compared to 85.6% in the first quarter of last year, “reflecting higher Medicaid medical cost trend.” Last week, UnitedHealth Group shocked Wall Street analysts and investors with an earnings report that included rising costs in its Medicare plans.
But Elevance’s earnings were in line with Wall Street’s expectations and were as the company had projected earlier this year.
Elevance said its operating revenue rose 15% to $48.8 billion in the first quarter of 2025, an increase of $6.5 billion compared to the prior year quarter. “This was driven by higher premium yields in our health benefits segment, acquisitions completed in the past year, growth in our Medicare Advantage and individual (Affordable Care Act) membership, and CarelonRx product revenue, partially offset by membership attrition in our Medicaid business,” the company said in its earnings report.
The company is experiencing solid growth in its health plans with total medical membership up 99,000 to 45.8 million as of March 31, 2025 compared to the end of 2024, “driven by growth in Medicare Advantage and commercial risk-based members,” the company said in its report. “This growth was partially offset by a decline in commercial fee-based membership from a known customer transition.”
Elevance president and chief executive officer Gail K. Boudreaux said the company “made measurable progress reimagining the healthcare experience with personalized support, real-time digital solutions, and a whole-health model that improves outcomes and reduces cost.”
“Through Carelon and our broader enterprise, we’re delivering on our strategy to be a lifetime trusted health partner—and elevating health beyond healthcare,” she added.
To be sure, the company’s Carelon business, which includes the medical care providers and the pharmacy benefit management business CarelonRx, reported a 38 percent increase in operating revenue to $16.7 billion in the first quarter. “This was driven by recent acquisitions in home health and pharmacy services, growth in CarelonRx product revenue, and the scaling of innovative risk-based capabilities in Carelon Services,” the company’s report said.