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As a subscriber you can listen to articles at work, in the car, or while you work out. Subscribe NowElevance Health released fourth-quarter earnings that topped analyst expectations, sending its stock slightly higher in trading Thursday.
Shares of Elevance surged in pre-market trading but have since settled midday to about $399 a share, a gain of more than 2%. The company also reported higher medical expenses, mainly from its Medicaid business.
Indianapolis-based Elevance, which operates Anthem Blue Cross and Blue Shield, reported a profit of of $418 million for the fourth quarter. The company posted adjusted earnings per share of $3.84.
Analysts were expecting $3.80, according to MarketBeat.
For the full year, Elevance reported profit of $5.98 billion, or $25.68 per share.
The company’s fourth-quarter revenue was $45.4 billion, an increase of 6.6% from the same period the year before. For all of 2024, Elevance posted revenue of $177 billion, up 3.3% from 2023.
“These results reflect the immediate actions we took in response to unprecedented cost trends in our Medicaid business,” Elevance CEO Gail K. Boudreaux said in a call with analysts. “We are grateful for the continuous and constructive collaboration of our state partners, while rates today remain insufficient to cover the elevated level of cost trend we are experiencing, we remain confident that rates will ultimately reflect the underlying acuity of our Medicaid membership over time.”
Elevance said the increase in revenue was driven by higher premium yields in its health benefits segment, acquisitions and growth in its CarelonRx pharmacy benefits manager, or PBM, division.
Boudreaux said Elevance’s commercial business performed well in 2024, especially selling to large employers.
“We welcomed 18 new national accounts who chose Elevance health for 2025 including several who selected us as the sole source provider to manage their medical and pharmacy benefits, continuing a trend we have seen the last few years,” Boudreaux said.
The company also increased its quarterly dividend to $1.71 per share, a 5% increase.
The company said those gains were partially offset by membership attrition in its Medicaid business. Elevance reported that its medical loss ratio (the percentage of premium dollars paid out for medical costs) was 92.4% in the fourth quarter, up 3.2% from a year ago.
For the full-year 2025, Elevance said it expected adjusted diluted earnings per share to be $34.15 to $34.85.
In a research note to investors, JP Morgan said Elevance’s guidance and fourth-quarter results fell “into a better-than-feared scenario.”
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And still we wonder why health care costs, including insurance, are amongst the highest in the nation. Hmm, maybe this is a clue.