Agilon Health's Q4 2024: Contradictions in Part D Management, Membership Repricing, and Cost Trends

These are the key contradictions discussed in Agilon Health's latest 2024Q4 earnings call, specifically including: Part D risk management, membership repricing, CMS cost trend expectations, and contract renegotiations:



Membership and Revenue Growth:
- Agilon Health saw a 36% increase in Medicare Advantage (MA) membership to 527,000 members year-over-year in Q4 2024.
- Total revenue grew 44% in Q4 to $1.52 billion and 40% year-over-year to $6.06 billion.
- Growth was primarily driven by the expansion of the 2024 partner class and organic growth in existing classes.

Medical Margin and Cost Trends:
- Medical margin for Q4 was $1 million, with a full-year margin of $205 million, impacted by higher Medicare Part D costs and unfavorable prior year development.
- The company recorded a gross medical cost trend of 6.8% for 2024, with plans for 5.3% net trend in 2025 due to payor bid adjustments and cost sharing reduction.

Strategic Actions and Cost Management:
- Agilon reduced Medicare Part-D exposure to less than 30% of its membership for 2025, focusing on managed growth and measured expansion.
- The company exited 2 unprofitable partnerships and introduced tighter attribution management, enhancing cost discipline and risk reduction strategies.

Quality and Clinical Programs:
- Agilon's managed care programs achieved 130 million in gross savings, beating the national cost trend by approximately 280 basis points.
- The company emphasized its ability to manage cost trends relative to benchmarks and deliver top-tier quality performance, reflected in readings, hospital admissions, and ER visits rates 20-30% better than the local fee-for-service benchmark.