Elevance Health's Q4 2024: Conflicting Signals on Medicare Advantage Guidance and Cyberattack Impact

Membership and Revenue Trends:
- Elevance Health reported a total of 45.7 million members at the conclusion of 2024, marking a decrease of 1.1 million year-over-year, driven by Medicaid redeterminations and changes in its geographic footprint. However, this was partially offset by growth in employer group fee-based offerings and ACA health plan products.
- The company generated $175.2 billion in total operating revenue for 2024, up approximately 3% from the prior year, reflecting premium rate adjustments and expanding Carelon businesses, despite lower Medicaid membership.
- The revenue growth was supported by acquisitions in pharmacy services and home health, which align with its enterprise growth strategy.

Medicaid and Medicare Cost Trends:
- Medicaid cost trends remained elevated, consistent with the outlook shared in the previous quarter, impacting the benefit expense ratio.
- In the Medicare segment, benefit reductions and market exits in 2024 provided a strong foundation for profitable growth in 2025, with anticipated Medicare Advantage membership growth in the range of 7% to 9%.
- The company's strategy to enhance partnerships with care providers and align data sharing is aimed at improving care quality, efficiency, and administrative burdens.

Commercial Business Growth:
- Elevance Health's commercial businesses performed well in 2024, with the integrated medical and pharmacy offering resonating in the market, leading to 18 new national accounts and strong retention rates.
- The individual exchange business experienced more than 30% growth in 2024, driven by innovative and affordable products.
- This growth is attributed to the company's ability to deliver compelling value in competitive market segments and strong employer group fee-based growth.

Capital Allocation and Shareholder Returns:
- Elevance Health opportunistically repurchased 0.5 million shares for a total of $1.8 billion in the fourth quarter, exceeding its initial forecast, and reported $2.9 billion in full-year repurchases.
- The Board of Directors approved a 5% increase in the quarterly dividend to $1.71 per share, marking the 14th consecutive annual increase.
- The company remains committed to returning capital to shareholders while investing in strategic initiatives, positioning itself for long-term growth and value creation.