What drove the sharp decline in net profit for ELV in late 2024?

The decline in net profit for Elevance Health (ELV) in late 2024 can be attributed to several key factors:

1. **Membership Attrition in Medicaid Business**: Elevance Health experienced a 2% decrease in medical membership, primarily due to attrition in its Medicaid business. This decline in membership contributed to the overall decrease in net profit.
2. **Increase in Benefit Expense Ratio**: The benefit expense ratio for Elevance Health increased to 92.4% in Q4, up by 320 basis points from the previous year. This increase was primarily driven by higher Medicaid medical cost trends, which partially offset the growth in operating revenue.
3. **Operating Margin Decline**: There was a notable decline in operating margin, which decreased to 1.5% in Q4 2024 from 3.0% in the prior year quarter. This decline indicates less efficiency in operations, which directly impacts the net profit.
4. **Comparison with Previous Year**: Elevance Health's net profit in Q4 2024 was significantly lower than in the same period of the previous year. For instance, the diluted EPS was $1.81 in Q4 2024, compared to $3.63 in Q4 2023. This indicates a sharp decline in profitability over the same period.

In summary, the decline in net profit for Elevance Health in late 2024 is primarily due to membership attrition in its Medicaid business, increase in benefit expense ratio, operating margin decline and comparison with the previous year. These factors combined to create a challenging financial environment for the company during this period.