Elevance Health CEO Gail Boudreaux told investors on Wednesday that nearly all of its Medicaid members have been through the redetermination process.
The insurer called out declines in Medicaid enrollment as contributing to its decreased membership overall in the second quarter compared to the prior year quarter. Total membership declined by about 5% or 2.2 million to 45.8 million, according to its earnings report.
Boudreaux said Elevance expects to see disenrolled members rejoin plans over the course of this year, though at a slower clip than was expected at the start of the unwinding. About 70% of those removed from the rolls lost coverage because of administrative factors, and may still be eligible, she said.
"As a result of redeterminations, our Medicaid membership mix has shifted, resulting in increased acuity and we are working actively with our state partners to ensure rates remain actuarially sound," Boudreaux said.
CFO Mark Kaye said that Elevance is continuing to monitor cost trends in Medicaid in the back half of the year, and is expecting to see operating revenue grow as the unwinding processes reaches its end.
He added that the company's full-year outlook does allow for the acuity shift and rise in utilization. They've seen a general trend toward elevated utilization rates in Medicaid, including durable medical equipment, home health, radiology and some elective procedures.
Elevance Health beat the Street on both profit and revenue in the second quarter, according to its earnings report released on Wednesday.
The health insurer posted $2.3 billion in profit as well as $43.9 billion in revenue, both of which surpassed Wall Street's expectations, according to Zacks Investment Research. Profits were up 24% from the prior-year quarter when Elevance reported $1.85 billion in profit.
Revenues grew by under 1% compared to the second quarter of 2023 when Elevance Health posted $43.7 billion.
At mid-year, the company has earned $4.5 billion in profit and brought in $85.5 billion in revenue. By comparison, Elevance Health reported $84.9 billion in revenue and $3.8 billion in profit at the midpoint of 2023.
"Second quarter results reflect the power of our diversified business and thoughtful execution of our strategic initiatives during a dynamic time for our industry, as we remain steadfast in our purpose to improve the health of humanity," said Gail Boudreaux, CEO of Elevance Health, in the press release. "We have prudently maintained our full-year outlook and are confident in the earnings power of our Health Benefits and Carelon businesses, which underpin our long-term targets."
Elevance Health expects to earn at least $37.20 per share this year, according to its reaffirmed outlook.
The company's health benefits segment posted $37.2 billion in operating revenue, according to the earnings report, a decline of about 2% year-over-year as decreases in Medicaid enrollment were not fully offset by premium increases or growth in individual market enrollment.
Total membership at the end of Q2 was 45.8 million, down about 2.2 million or 5% from Q2 2023 due in large part to the Medicaid enrollment losses.
Operating revenue at its Carelon division was $13.3 billion, up 10% compared to the prior-year quarter.
Elevance said this was backed by multiple factors, including the acquisition of Paragon Healthcare, the launch and growth of risk-based medical benefit and behavioral health management programs and growth in product revenue at CarelonRx.