Elevance Health reaches $1.9B in profits in strong Q2

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Elevance Health posted a strong second quarter, achieving about $1.9 billion in revenue, good for 13.2% growth over the previous year's $1.6 billion haul, according to the company's latest earnings report.

Revenues also grew 12.7%, hitting $43.7 billion, an increase from the $38.6 billion in revenue posted in Q2 2022.

Elevance also saw double-digit growth in operating earnings, and adjusted earnings per share, the company said.

President and CEO Gail Boudreaux attributed the strong showing to "focused efforts to optimize our mature businesses, invest in high-growth opportunities, and accelerate our growth through Carelon to meet the whole health needs of consumers."

Given the strong performance, the company now expects GAAP net income to be greater than $29.09 per share in 2023, and adjusted net income to be greater than $32.85 per share.

WHAT'S THE IMPACT?

Operating revenue was $43.4 billion in the second quarter of 2023, an increase of $4.9 billion, or 12.7% year-over-year. The increase was primarily driven by premium rate increases in the Health Benefits business and higher premium revenue due to membership growth in Medicaid and Medicare, said Elevance.

Medical membership totaled about 48 million as of June 30, an increase of 938,000, or 2% year-over-year, driven primarily by growth in Medicaid, BlueCard, ACA health plan, and Medicare Advantage members, and partially offset by attrition in the Employer Group risk-based business.

During the second quarter of 2023, medical membership decreased by 135,000, driven by attrition in Medicaid due to the resumption of eligibility redeterminations, Elevance said.

Operating cash flow was about $2 billion, or 1.1 times net income in the second quarter of 2023.

Operating gain in the Health Benefits segment totaled $2.1 billion in the second quarter of 2023, an increase of $367 million from $1.8 billion in the second quarter of 2022, representing growth of approximately 21%. The increase was primarily driven by premium rate adjustments to more accurately reflect cost of care and membership growth in Medicaid, said Elevance – partially offset by a charge associated with a court ruling impacting health plans in a certain state related to prior years' COVID-19 costs.

Operating gain in the Carelon segment was $632 million in the second quarter of 2023, an increase of $40 million from $592 million in Q2 2022.

The company reported an operating loss of $152 million in the Corporate & Other segment for the second quarter of 2023, a decrease of $125 million from an operating loss of $27 million in the second quarter of 2022, driven by an increase in unallocated corporate expenses, Elevance said.

THE LARGER TREND

Elevance Health announced the launch of healthcare services brand Carelon in June 2022. Carelon services range from research to integrated whole-person care delivery, pharmacy, behavioral health and digitally enabled solutions.

Elevance acquired BioPlus, a comprehensive specialty pharmacy, in November. BioPlus provides a range of specialty pharmacy services for patients living with complex and chronic conditions such as cancer, multiple sclerosis, hepatitis C, autoimmune diseases and rheumatology.

Earlier this year, Elevance said it would be pursuing an acquisition of Blue Cross Blue Shield of Louisiana. The two organizations said they're "aligned in a mission" to improve access, quality and affordability for Louisianans.

Twitter: @JELagasse
Email the writer: Jeff.Lagasse@himssmedia.com