Elevance Health Reports Third Quarter 2024 Results

Indianapolis, IN - October 17, 2024 - Elevance Health, Inc. (NYSE: ELV) reported third quarter 2024 results.

"We remain confident in the long-term earnings potential of our diverse businesses as we navigate a dynamic operating environment and unprecedented challenges in the Medicaid business. We expect Medicaid rates will align with the needs of our members in time, and are taking proactive actions to enhance operational efficiencies that will ensure we emerge from this period even stronger."

Gail K. Boudreaux
President and Chief Executive Officer

Given third quarter results and the timing mismatch between Medicaid rates and acuity, Elevance Health now expects 2024 GAAP net income per diluted share to be approximately $26.50 and adjusted net income per diluted share to be approximately $33.00.

*Refer to GAAP reconciliation tables.
**Earnings per diluted share ("EPS")

Consolidated Enterprise Highlights

Operating revenue was $44.7 billion in the third quarter of 2024, an increase of $2.2 billion compared to the prior year quarter. This was driven by higher premium yields in our Health Benefits segment and growth in CarelonRx product revenue, partially offset by membership attrition in our Medicaid business.

The benefit expense ratio was 89.5 percent, an increase of 270 basis points, driven primarily by the timing mismatch between Medicaid rates and the higher acuity of our members. Days in Claims Payable was 42.8 days as of September 30, 2024, a decrease of 2.5 days from June 30, 2024, and a decrease of 5.8 days compared to September 30, 2023 due to increases in average benefit expense per day.

The operating expense ratio was 11.8 percent, an improvement of 110 basis points. Excluding adjustment items, the operating expense ratio was 9.6 percent, an improvement of 150 basis points, reflecting disciplined cost management to enhance operating efficiency.

Cash Flow & Balance Sheet

Operating cash flow was $2.7 billion in the quarter, an increase of approximately $0.1 billion year-over-year. As of September 30, 2024, cash and investments at the parent company totaled approximately $2.6 billion.

During the third quarter of 2024, the Company repurchased 0.1 million shares of its common stock for $60 million, at a weighted average price of $511.01, and paid a quarterly dividend of $1.63 per share, representing a distribution of cash totaling $378 million. As of September 30, 2024, the Company had approximately $3.1 billion of Board approved share repurchase authorization remaining. On October 15, 2024, our Audit Committee, pursuant to authorization granted by the Board of Directors, authorized an $8.0 billion increase to the common stock repurchase program. The Company intends to utilize this authorization over a multi-year period, subject to market and industry conditions.

Reportable Segment Highlights

Health Benefits is comprised of Individual, Employer Group risk-based, Employer Group fee-based, BlueCard® , Medicare, Medicaid, and Federal Health Products & Services businesses.

Health Benefits segment operating revenue was $38.3 billion in the third quarter of 2024, an increase of $1.5 billion compared to the prior year quarter, driven primarily by higher premium yields, partially offset by membership attrition in our Medicaid business.

Operating gain totaled $1.6 billion, impacted primarily by the unfavorable mix shift in Medicaid membership related to eligibility redeterminations, partially offset by premium rate increases, focused medical management, and the proactive actions we are taking to enhance operating efficiency.

Medical membership totaled approximately 45.8 million as of September 30, 2024, a decrease of 1.5 million, or 3 percent, driven by attrition in our Medicaid business associated with eligibility redeterminations and footprint adjustments in certain Medicaid states. These losses were partially offset by growth in Employer Group fee-based and Affordable Care Act health plan membership.

Carelon is comprised of CarelonRx and Carelon Services.

Operating revenue for Carelon was $13.8 billion in the third quarter of 2024, an increase of $1.8 billion, or 15 percent compared to the prior year quarter. This was driven by the launch and growth of risk-based capabilities in Carelon Services and growth in CarelonRx product revenue, related to the acquisition of Paragon Healthcare in the first quarter and increases in external members served.

Operating gain for Carelon totaled $0.8 billion, an increase of $134 million, or 20 percent, primarily driven by growth in product revenue and a one-time favorable intra-year true up in CarelonRx, partially offset by results in our Carelon Health businesses.

Quarterly Dividend

On October 15, 2024, the Audit Committee of the Company's Board of Directors declared a fourth quarter 2024 dividend to shareholders of $1.63 per share. The fourth quarter dividend is payable on December 20, 2024, to shareholders of record at the close of business on December 5, 2024.

About Elevance Health

Elevance Health is a lifetime, trusted health partner whose purpose is to improve the health of humanity. The company supports consumers, families, and communities across the entire healthcare journey - connecting them to the care, support, and resources they need to lead better lives. Elevance Health's companies serve approximately 113 million consumers through a diverse portfolio of industry-leading medical, pharmacy, behavioral, clinical, and complex care solutions. For more information, please visit www.elevancehealth.com or follow us @ElevanceHealth on X and Elevance Health on LinkedIn.

Conference Call and Webcast

Management will host a conference call and webcast today at 8:30 a.m. Eastern Daylight Time ("EDT") to discuss the company's third quarter results and outlook. The conference call should be accessed at least 15 minutes prior to the start of the call with the following numbers:

• 888-947-9963 (Domestic)
• 866-510-4837 (Domestic Replay)
• 312-470-0178 (International)
• 203-369-1943 (International Replay)

The access code for today's conference call is 3972058. There is no access code for the replay. The replay will be available from 11:30 a.m. EDT today, until the end of the day on November 15, 2024. The call will also be available through a live webcast at www.elevancehealth.com under the "Investors" link. A webcast replay will be available following the call.

Basis of Presentation

1. Operating revenue and operating gain/loss are the key measures used by management to evaluate performance in each of its reporting segments, allocate resources, set incentive compensation targets and to forecast future operating performance. Operating gain/loss is calculated as total operating revenue less benefit expense, cost of products sold and operating expense. It does not include net investment income, net gains/losses on financial instruments, interest expense, amortization of other intangible assets, gains/losses on extinguishment of debt or income taxes, as these items are managed in a corporate shared service environment and are not the responsibility of operating segment management. Refer to the GAAP reconciliation tables.

2. Operating margin is defined as operating gain divided by operating revenue.

Elevance Health Contacts

Investor Relations:
Stephen Tanal
[email protected]

Media Contact:
Leslie Porras
[email protected]

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