Title: Elevance Health Projects $6 Billion in Profits for 2024 Amidst Soaring Expenses
Elevance Health reported an impressive projected profit of around $6 billion in 2024, with a substantial $418 million earned in the fourth quarter. This health insurance giant, known for operating Blue Cross and Blue Shield plans in 14 states and providing Medicaid benefits, has been grappling with rising medical expenses, much like other health insurers. The surge in patients seeking medical treatment is causing a spike in claims, according to executive statements. Specifically, Elevance is dealing with an influx of sick patients covered by Medicaid.
In the fourth quarter, Elevance's benefit expense ratio skyrocketed to 92.4%, marking a significant increase of 320 basis points compared to the previous year. For the full year, this ratio rose to 88.5%, an uptick of 150 basis points year over year. Consequently, fourth-quarter net income was nearly cut in half, dropping from $856 million to $418 million. Nevertheless, the full-year 2024 net income remained almost stable at $5.98 billion. Total revenue for the fourth quarter and full year increased by 6.6% and 3.3%, respectively.
The health insurer ended the year with a decrease in health plan members, primarily due to a decline in Medicaid customers. The closure of the U.S. Public Health Emergency in May 2023after three years of the COVID-19 pandemic had an impact on Elevance, which has a significant stake in Medicaid coverage administration for states. Consequently, the company faced Medicaid redeterminations, where people must demonstrate their eligibility for coverage.
Elevance's medical membership dropped by 2%, or 1.1 million, to 45.7 million by December 31, 2024. Growth in Employer Group fee-based and Affordable Care Act health plan membership partially offset this attrition.
In her statement accompanying the earnings report, Elevance Health CEO Gail Boudreaux emphasized the company's commitment to providing simple, affordable, and accessible care to its members and care providers. The fourth-quarter results showed progress towards improving operations in response to the industry's dynamic environment. Looking forward to 2025, Elevance remains committed to simplifying the healthcare experience, deepening the impact of Carelon, and deploying innovative care models for sustainable growth.
While Elevance Health's Carelon business reported a 19% increase in operating revenue in the fourth quarter of 2024, the overall increase for the year was 12%, attributed to the launch and growth of risk-based capabilities in Carelon Services and acquisitions made in 2024.
Elevance Health's strategic partner, Carelon, contributed significantly to the company's fourth-quarter revenue, showing a 19% increase. Additionally, Blue Cross and Blue Shield, subsidiaries of Elevance Health, continued their expansive operations in 14 states, providing insurance coverage and Medicaid benefits.
Despite facing challenges with rising medical expenses and Medicaid redeterminations, Blue Cross and Blue Shield, part of Elevance Health, maintained a strong relationship with Carelon, as shown by the steady growth in their risk-based capabilities, resulting in a 12% increase in revenue for the year.
