Agilon Health's Q2 2025: Key Contradictions in Growth Strategy, Risk Assessment, and Cost Management

2026 growth strategy, risk adjustment and burden of illness assessment, cost trends and risk adjustment, Part D risk management strategy, and medical cost trends are the key contradictions discussed in Agilon Health's latest 2025Q2 earnings call.



Revenue and Financial Performance:
- Agilon Health reported total revenue for Q2 2025 as $1.4 billion, compared to $1.48 billion in Q2 2024, reflecting a $40 million decrease.
- The decrease was primarily due to lower risk adjustment in 2024 and 2025 and unfavorable development in Part D costs.
- The lower risk adjustment was attributed to inconsistencies between the expected and received 2024 payer data, along with increased Part D costs from a payer carving out their Part D obligations.

Medicare Advantage Membership and Market Exits:
- The company's Medicare Advantage membership at the end of Q2 2025 was 498,000 members, compared to 513,000 members in Q2 2024, indicating a 14,000 member decrease.
- This was due to a measured approach to membership growth and recent market exits as part of a strategic focus on profitability.

Risk Adjustment and Cost Trends:
- Agilon Health experienced a $48 million reduction in revenue due to a trued up risk adjustment for the 72% of their membership on the enhanced data platform.
- The adjustment was necessary due to the lower-than-expected risk scores for 2024 and 2025, partly influenced by the lower 2024 risk baseline and enhanced data visibility.
- The adjustments are attributed to revisions in the company's data model and a more accurate understanding of member-level risk scores.

Operational and Strategic Initiatives:
- Agilon is aggressively aligning talent and execution to improve performance, focusing on enhancing contract economics, reducing risk, and optimizing cost structures.
- The company is leveraging an enhanced data platform and AI to improve operational efficiency and financial forecasting, while also working to broaden quality initiatives with payers.
- These efforts are aimed at improving results and positioning Agilon for favorable market conditions in 2026.