The payer saw "encouraging" signs that Medicaid members losing coverage are transitioning into Affordable Care Act (ACA) exchange plans.
Elevance Health charged forward in the second quarter by positing $1.9 billion in profits, despite dealing with a drain in Medicaid membership due to the redeterminations process.
In the company's second quarter earnings report, the payer said it lost 135,000 Medicaid beneficiaries, but managed a net income increase of 13.2% on revenue growth of 12.7% year-over-year to $43.4 billion.
As a whole, Elevance's medical membership increased 938,000 year-over-year to 48 million, driven largely by growth in Medicaid, BlueCard, ACA health plans, and Medicare Advantage members.
"Our solid execution and continued progress of our strategy to become a lifetime trusted health partner resulted in strong second quarter and first half results," Elevance president and CEO Gail Boudreaux said in a press release. "Our focused efforts to optimize our mature businesses, invest in high-growth opportunities, and accelerate our growth through Carelon to meet the whole health needs of consumers positions us well for the rest of 2023 and beyond."
To tackle Medicaid eligibility redeterminations, Boudreaux said in an earnings call that the payer has contacted more than 1.5 million of its Medicaid members to help them renew their coverage or enroll in forms of coverage.
One of those forms of coverage is ACA plans, which Boudreaux identified as a landing point for many members shifting from Medicaid.
"Transitions of coverage are not typically immediate, but emerging data points suggest consumers using Medicaid are starting to transition onto ACA exchange plans," Boudreaux said on the call. "It's still early in the process, and our expectations for coverage transitions remain unchanged. Our deep local roots and diversified product portfolio positions us uniquely well to meet consumers' needs, regardless of age or socioeconomic status."
John Gallina, Elevance executive vice president and CFO, stated on the earnings call that the company expects 40% to 45% of new Medicaid beneficiaries added during the public health emergency will stay on Medicaid by the end of the initial redetermination cycle. Meanwhile, 20% to 25% are expected to end up on employer-sponsored plans, with another 20% to 25% ending up in an individual ACA plan.
Jay Asser is the contributing editor for strategy at HealthLeaders.
KEY TAKEAWAYS
A loss of 135,000 Medicaid members in the second quarter didn't stop Elevance Health from experiencing 13.2% net income increase year-over-year, resulting in $1.9 billion in profits.
President and CEO Gail Boudreaux said members transitioning out of Medicaid are going into Affordable Care Act exchange plans.