Elevance Health Reports Strong Fourth Quarter Results Despite Rising Healthcare Costs
Elevance Health announced on Wednesday that it had achieved a net income of $547 million in the fourth quarter, despite ongoing challenges with rising healthcare costs. The company, which is the second-largest health insurer in the country, has been grappling with increased medical expenses from its customers.
Known for operating Anthem brand Blue Cross and Blue Shield plans in 14 states, Elevance also manages Medicaid contracts with multiple states and sells individual coverage under the Affordable Care Act. Additionally, the company has a growing Carelon healthcare services business.
Like many of its competitors, Elevance has been facing growing medical expenses, with its benefit expense ratio reaching 93.5% in the fourth quarter. This ratio represents the percentage of premium revenue that goes towards medical costs, and the company has been striving to keep it in the mid to low 80s.
Despite the challenges, Elevance saw a 31% increase in net income in the fourth quarter, reaching $547 million, or $2.47 per share. Total revenues also saw a 9.5% increase, reaching $49.7 billion.
The company’s benefit expense ratio has been gradually increasing over the past year, starting at 86.4% in the first quarter and reaching 91.3% in the third quarter. Elevance attributes this rise to elevated medical cost trends, particularly following the Covid-19 pandemic when many patients delayed treatment.
With a focus on advancing affordability and improving access to healthcare, Elevance CEO Gail Boudreaux expressed confidence in the company’s ability to return to at least 12% adjusted earnings per share growth in 2027. The company ended 2025 with 45.2 million health plan members, a 1% decrease from the previous year due to attrition in the Medicaid business.
Despite these challenges, Elevance’s Carelon health services business, including CarelonRx pharmacy benefit management, experienced a 27% increase in operating revenue in the fourth quarter. This growth was driven by the expansion of Carelon services, acquisitions, and increased Medicare Advantage membership.
As Elevance continues to navigate the changing landscape of healthcare, the company remains committed to providing quality care to its members while managing rising costs and driving sustainable growth.
