UPDATED: 1:30 p.m. on Jan. 23
Elevance Health executives told investors on Thursday morning that they're confident in their 7% to 9% growth targets in Medicare Advantage based on early data coming out of the annual enrollment period.
Given the pressures on the MA program — ranging from lowered rates to ongoing elevated utilization — the insurer took a targeted approach as it planned for growth in this market, said Felicia Norwood, executive vice president and president of government health benefits for Elevance.
"We were very focused on our local strategy to ensure we were effectively capturing growth opportunities where they were most favorable for us," she said.
Much of that expected growth for the year is frontloading following the AEP, but Elevance is also expecting to have some enrollees age in to Medicare throughout 2025 and to also capture additional members in the dual special needs segment, Norwood said.
She also noted that Elevance saw greater growth in HMO products compared to PPO plans.
CEO Gail Boudreaux added that Elevance Health also secured a key client for a group Medicare Advantage contract, which is a major factor in its growth outlook. That particular client has been a long-term partner on the commercial side, so there is already significant experience in working together, she said.
She added that Elevance put a focus on a "prudent" approach around MA that accounted for utilization and cost pressures as it built out its plan lineup. She emphasized significant member retention as a critical factor, too.
"We feel very good about and confident in the enrollment guidance we gave for Medicare Advantage," Boudreaux said.
Elevance Health posted $418 million in profit for the fourth quarter of 2024, a figure that surpassed Wall Street's expectations despite decreasing 51% year over year.
By comparison, the company brought in $856 million in profit in the fourth quarter of 2023, according to its earnings report released Thursday. It also earned $45 billion in revenue in the fourth quarter, up 6% from the $42.5 billion it reported for the fourth quarter of 2023.
It's fourth-quarter revenue also beat the Street, according to Zacks Investment Research.
For full-year 2024, Elevance reported $175.2 billion in revenue, an increase of 2.9% over its $170.2 billion haul in 2023. Profits for the full year were also on par with 2023, according to the report, with the company earning $5.98 billion in profit for 2024 compared to $5.987 billion in 2023.
"Our fourth quarter results demonstrate tangible progress in improving our operations in response to the dynamic environment facing the industry," CEO Gail Boudreaux said in a press release. "As we look to 2025, we remain resolute in our goal to simplify the healthcare experience, deepen the impact of Carelon, and deploy innovative care models, positioning us to achieve sustainable growth over the long run.”
The company's health benefits division reported $37.6 billion in revenue for the fourth quarter, up 3% from the fourth quarter of 2023. Elevance attributed this largely to higher premium yields, though it did say that Medicaid attrition partially offset gains made there.
Elevance Health had 45.7 million members across all of its offerings as of Dec. 31, according to the report. That was down by about 1.1 million year over year backed by the Medicaid membership decline, though Elevance said it did make gains in the employer market as well as on the Affordable Care Act's exchanges.
Carelon reported $14.7 billion in revenue for the fourth quarter of 2024, up 19% year over year. The company said this was backed by the closure of key acquisitions as well as growth in Carelon Services' risk-based capabilities.
The company said it expects to make between $34.15 and $34.85 in earnings per share for 2025.