Elevance Health earned a $2.3 billion profit during the second quarter, up 24% from the year-ago period, the insurance company reported Wednesday.
Net income rose as revenue grew 0.5% to $43.9 billion and operating revenue slipped 0.4% to $43.2 billion since the second quarter of 2023. Elevance Health recorded $40.9 billion in expenses, down 0.8%. Investment income increased 22.1% to $508 million, boosting profitability.
Related: Why the Medicaid 'unwinding' dinged insurer finances
The company's medical loss ratio, which measures the share of premiums spent on claims, improved from 86.4% to 86.3% during the second quarter.
Net income and adjusted earnings per share of $10.12 exceeded market expectations.
Elevance Health reaffirmed its projection that earnings would grow 12%, or $37.20 per share, this year. But the company downgraded its longer-term guidance based on cost trends. The insurer now predicts future earnings will grow at least 12%, less than the 12%-15% it announced in the first quarter.
"That's primarily to reflect Medicaid-related attrition that has occurred to date and the impact of the prudent action that we're taking in our 2024 and 2025 Medicare Advantage bids in response to the risk model revisions," Chief Financial Officer Mark Kaye said during a call with investor analysts.
The health insurance industry is still feeling the effects of the Medicaid redeterminations process that has removed more than 24 million enrollees from the program. States suspended regular eligibility checks and allowed beneficiaries to remain on Medicaid during the COVID-19 public health emergency in exchange for enhanced federal funding. But states had to begin unwinding that continuous coverage policy last April.
Elevance Health's Medicaid membership shrank 22.3% to 9 million during the second quarter, driving a 4.6% membership decrease across its segments despite growth in the commercial and individual markets.
The company's Carelon subsidiary recorded $13.3 billion in operating revenue, a 10% improvement that offset poorer performances in other lines of business. Elevance Health partly credited the Carelon growth to its acquisition of infusion provider Paragon Healthcare.
Elevance Health shares opened at $526 on the New York Stock Exchange on Wednesday, down 4.9% from the previous day's close.
