By Rob Curran
Elevance Health's second-quarter earnings fell and the health insurer slashed its 2025 profit projection, citing industry-wide cost increases in the Affordable Care Act and Medicaid insurance lines.
The health insurer formerly known as Anthem logged second-quarter earnings of $1.74 billion, or $7.72 a share, down from $2.3 billion, or $9.85 a share, a year earlier. That compared with the average analyst estimate of $8.74 a share, according to a FactSet survey.
Stripping out certain one-off items, Elevance posted adjusted earnings of $8.84 a share, compared with the mean analyst estimate of cash earnings of $8.91 a share.
Second-quarter revenue rose 13% to $49.78 billion, surpassing the average analyst estimate of $48.19 billion, as per FactSet.
The medical-loss ratio, a closely watched metric that compares health costs to premium revenue, rose to 88.9% from 86.3% a year earlier, reflecting higher medical costs in its Medicaid and Affordable Care Act health plans. Elevance and other insurers have struggled with recent increases in the use of medical services.
Medical membership, a tally of enrollees in its insurance plans, fell 0.5% to 45.6 million.
The Indianapolis company reduced its 2025 earnings target to $24.10 a share from a prior estimated range between $28.30 and $29 a share. On an adjusted basis, Elevance cut its projection to $30 a share from a previous estimate of $34.15-to-$34.85 a share.
Health insurers' business models have been the subject of intense debate in the public square since the shooting of a UnitedHealth Group executive late last year. The economics of the industry have also deteriorated. During the second quarter, UnitedHealth ousted its chief executive and withdrew its outlook, blaming higher costs in Medicare Advantage. More recently, Centene pulled its growth targets, citing a sicker-than-expected population on plans under the Affordable Care Act, or Obamacare. Another Elevance rival, Molina Healthcare recently cut its profit forecast, citing cost pressure across all its government plans, including Medicaid.
Write to Rob Curran at rob.curran@dowjones.com
(END) Dow Jones Newswires
07-17-25 0643ET
