Elevance Health plans to exit additional Medicaid markets over the next 12 to 18 months where it doesn’t see a viable path forward, executives said July 15 during the company’s second-quarter earnings call.
The move follows Elevance’s recent mutual agreement to exit the Medicaid managed care program in Washington, D.C. Nationally, the company covered about 8.4 million Medicaid members as of June 30, down 4.3% from a year earlier. Executives did not say which markets were under review for future pullbacks.
The company’s second quarter earnings showed that the Medicaid segment has been the primary drag on Elevance’s government business. CFO Mark Kaye said the company expects a full-year Medicaid operating margin of around -1.75%.
“We view 2026 as a trough for Medicaid margins with improvement over time as rates incorporate more recent experience and our care management actions mature,” he said. Mr. Kaye added that second-half margins should improve, supported by favorable July 1 rate updates from states.
Cost pressures in the Medicaid space remain elevated and are concentrated around behavioral health services, including ABA therapy, emergency department utilization, outpatient surgery and specialty pharmacy.
Executives also addressed HR 1, the federal law that establishes Medicaid work requirements for the program’s expansion population nationwide next year. Elevance members subject to those requirements represent roughly 20% of the company’s overall Medicaid business.
Earlier this month, Centene said it would exit the Arkansas Medicaid expansion program in 2027, citing “current funding challenges.”
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