Health Insurer Elevance's Q4 Earnings: Dividend Increase, Drop In Medicaid Enrollment, Upbeat 2024 Outlook

Elevance Health Inc ELV posted fourth-quarter 2023 revenues of $42.45 billion, up nearly 7% Y/Y, beating the consensus of $42.09 billion. 

The increase was driven by higher premium revenue in the Health Benefits segment and growth in pharmacy product revenue in CarelonRx.

Profit declined slightly year-over-year. In the fourth quarter of 2022, Elevance Health reported $856 million in profit, down 1% Y/Y.

The insurer reported adjusted EPS of $5.62, up 15.2% Y/Y, and slightly missing the consensus of $5.64.

The benefit expense ratio was 89.2% in the fourth quarter, an improvement of 50 basis points compared to the fourth quarter of 2022, and 87% for the full year, an improvement of 60 basis points year-over-year.

Elevance’s membership fell by 570,000, or 1%, to around 46.96 million as of December 31, 2023, compared to a year ago. 

Medicaid enrollment was down more than 1 million, or 9%, to 10.5 million at the end of the fourth quarter compared to 11.57 million in the fourth quarter of 2022.

“This was driven by attrition in our Medicaid business associated with the resumption of eligibility redeterminations in the second quarter of 2023 and declines in our employer group risk-based business,” Elevance Health said Wednesday in its fourth quarter and full-year 2023 earnings report. “These membership losses were partially offset by growth in BlueCard, Affordable Care Act health plans, and Medicare Advantage.”

In Q4, the company lost 364,000 members because of the Medicaid eligibility rulings, partially offset by commercial segment growth.

Operating revenue at Carelon was $12.4 billion in Q4 and $48 billion for the full-year 2023.

Dividend: Elevance Health increased its quarterly dividend by 10.1% to $1.63 per share

Guidance: Elevance Health forecasts 2024 operating revenue growth of flat-to-low-single digits over 2023 sales of $170.2 billion compared to the consensus of $173.92 billion.

The company sees adjusted EPS of greater than $37.10 versus consensus of $37.05.

Elevance Health sees 2024 year-end medical enrollment of 45.8 million-46.6 million versus 47 million in 2023.

Read Next: Cigna’s Medicare Business Sale: Health Care Service Could Scoop The Business.

Price Action: ELV shares are up 2.53% at $484.13 on the last check Wednesday.

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