Despite rising Medicare Advantage (MA) utilization, Elevance Health has come out of Q1 2025 unscathed.
The company reported adjusted diluted earnings per share of $11.97 and stuck to its prediction of $34.15 to $34.85 adjusted earnings per share for 2025. This contrasts with peer UnitedHealth Group, which lowered its earnings predictions for the year in its call last week following a disappointing quarter. (Elevance released a preview of its earnings in a Form 8-K on April 17, hours after UnitedHealth detailed its surprisingly bad quarter, to reassure investors.)
“We’re staying focused on what we can control, delivering operational results, engaging proactively with partners, and advancing our long-term strategy,” President and CEO Gail Boudreaux said in Elevance’s April 22 earnings call.
United attributed its struggle to surprisingly high MA utilization and unexpected expenses from Optum, the company’s healthcare services business, Healthcare Brew previously reported.
Like other insurers recently, Elevance says member utilization is up—the company reported an 86.4% benefit expense ratio compared to 85.6% a year ago—but the company had planned for an increase, CFO Mark Kaye said.
The high utilization costs were primarily from Medicaid, according to the earnings report, in contrast with United, which was caught off guard by sky-high MA utilization contributing to an 84.8% medical care ratio.
Growth mindset. MA currently makes up a small amount of Elevance’s membership—2.3 million of its nearly 46 million members—though it hopes to change that.
During the call, leaders doubled down on plans to grow MA membership 7%–9% by the end of the year, even as other payers take steps to encourage member turnover amid high utilization expenses. Most of the growth was expected in Q1 following enrollment.
MA membership has grown by 238,000, or 11.8%, from 2.1 million a year ago, according to the company’s earnings report.
The insurer is working to get new MA members to the doctor’s office for wellness visits ASAP in order to record diagnoses, which affect the amount the Centers for Medicare and Medicaid Services reimburses under its risk-adjustment model, Felicia Norwood, EVP and president of government health benefits, added.
“We are carefully managing that new volume [of MA members], and we are delivering targeted growth across specific populations, products, and geographies,” Kaye said.
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