Elevance Health is bullish about health insurance exchange enrollment as it confronts challenges in Medicare and Medicaid, Chief Financial Officer Mark Kaye said during the UBS Global Healthcare Conference on Tuesday.
The for-profit Blue Cross and Blue Shield licensee expects significant growth in its individual market line for 2025 and is striving to constrain spending in Medicare Advantage and Medicaid, Kaye said at the event in Rancho Palos Verdes, California.
Related: How Highmark, Alignment earned top Medicare Advantage star ratings
Health insurers including Elevance Health, UnitedHealth Group, Humana, Centene and Molina Healthcare have reported high utilization and costs in their Medicare Advantage and Medicaid books as member costs have escalated.
The health insurance exchanges and specialty pharmacy appear to be bright spots for Elevance Health as it struggles to revive its Medicare and Medicaid margins.
“I'm really excited about the growth potential associated with our ongoing expansion of our [Affordable Care Act of 2010] health plan business,” Kaye said. “It has certainly created a promising white space for long-term growth.”
- Exchanges: Marketplace sign-ups have risen 30% to 1.3 million so far this year, Kaye said. Elevance Health expects those gains to mount during open enrollment for 2025, which started Nov. 1 and ends Jan. 15 in most states, in part because the company entered three more states, he said. The insurer is "committed to growth in the ACA marketplace regardless" whether Congress renews the enhanced subsidies set to expire at the end of 2025, he said.
- Medicare Advantage: Given its relatively stable benefit offerings compared with rivals, Elevance Health anticipates individual Medicare Advantage membership will grow slightly above market and expects strong enrollment in its Medicare Advantage group plans, Kaye said. The company expects to miss its long-term Medicare Advantage 3%-5% target margin this year and next year, he said. Kaye said Elevance Health has terminated broker commissions for new sign-ups into “select” Medicare Advantage plans, a tactic CVS Health subsidiary Aetna and Cigna also have employed to avoid attracting costly beneficiaries.
- Medicaid: State capitation payments to Medicaid managed care contractors have not kept pace with rising expenses, and that mismatch will persist, Kaye said. "The timeline is not yet clear when rates will fully reflect the cost of our members,” he said. Elevance Health is seeing higher spending on behavioral health, inpatient care, outpatient services, home healthcare and durable medical equipment among its Medicaid members, he said.
Elevance Health reported a 22.5% decline in net earnings to $1 billion on a 5.3% increase in revenue to $45.1 billion during the third quarter. Membership fell 3.3% to 45.8 million, driven by Medicaid rolls contracting as result of eligibility redeterminations.
