On the company’s second-quarter earnings call on July 17, CFO Mark Kaye said the company is seeing signs of increased utilization in outpatient, home health, radiology and other areas.
Medicaid redeterminations have left Elevance with a higher-acuity Medicaid membership. In 2023, states began the process of disenrolling Medicaid enrollees for the first time since 2020. States were prohibited from disenrolling any Medicaid beneficiaries, regardless of their eligibility, during the COVID-19 public health emergency.
As of July 12, more than 24 million people have been disenrolled through the redetermination process, according to KFF. Those who remain enrolled tend to have more health needs, driving up costs in the program.
According to the company’s second quarter earnings report, Elevance Health’s Medicaid membership dropped 23% from June 2023 to 9 million.
Some Medicaid beneficiaries who know they will soon be ineligible for the program may be seeking care before they lose their benefits, driving up utilization, Mr. Kaye said.
Elevance Health reported a medical loss ratio of 86.3% in the second quarter of 2024, down from 86.4% in 2023. The company expects its full-year medical loss ratio to land at the top end of its projected range, Mr. Kaye said.
Felicia Norwood, president of Elevance’s government benefit business, told investors the company is having “very constructive” conversations with states about Medicaid reimbursements.
“We fully expect our rates to remain actuarially sound, but we acknowledge the potential for a short-term disconnect between the timing of our rates and the emerging acuity in our populations,” Ms. Norwood said.
Other payers have warned redeterminations are shifting margins in the business. Minnetonka, Minn.-based UnitedHealth Group CEO John Rex told investors on a June 16 call that a “timing mismatch” between state payment rates and the shift to a higher-need population is a short-term problem.
Most people disenrolled from Medicaid have lost their benefits for procedural reasons, rather than being determined ineligible for the program on the basis of their income, according to KFF.
Many beneficiaries who lose coverage eventually re-enroll in Medicaid, Elevance Health CEO Gail Boudreaux said.
“We expect disenrolled members to re-enroll throughout the year, albeit on a longer lag than expected when redeterminations resumed last year,” Ms. Boudreaux said. “We are seeing the percentage of returners steadily increase, especially in … states where we offer both commercial and Medicaid health plans.”
