Elevance Health(ELV) - 2025 Q1 - Quarterly Report

Membership and Growth - As of March 31, 2025, Elevance Health serves approximately 45.8 million medical members through its affiliated health plans [152]. - The company anticipates continued growth in Public Exchange membership and has expanded into select service areas in Florida, Maryland, and Texas in 2025 [156]. - Total medical membership as of March 31, 2025, was 45,833 thousand, a decline of 216 thousand or 0.5% from March 31, 2024 [187]. - Medicare Advantage membership increased by 238 thousand or 11.8% to 2,255 thousand as of March 31, 2025 [187]. - 53% of Elevance Health's Medicare Advantage members were enrolled in plans rated at least 4.0 Stars or higher for the 2024 Star Ratings [169]. Financial Performance - Total operating revenue for the three months ended March 31, 2025, was $48,765 million, an increase of$ 6,492 million or 15.4% from the same period in 2024 [182]. - Net income for the three months ended March 31, 2025, was $2,184 million, a decrease of$ 65 million or 2.9% compared to the same period in 2024 [183]. - Health Benefits operating revenue increased by $4,173 million or 11.2% to$ 41,431 million, driven by higher premium yields and growth in Medicare Advantage and Individual ACA membership [203]. - CarelonRx operating revenue rose by $2,049 million or 25.4% to$ 10,116 million, primarily due to higher prescription volume and revenue from recent acquisitions [205]. - Carelon Services operating revenue increased by $2,527 million or 63.0% to$ 6,536 million, attributed to the acquisition of CareBridge and expansion of risk-based capabilities [206]. - Total operating gain for the three months ended March 31, 2025, was $3,170 million, a$ 154 million or 5.1% increase from $3,016 million in 2024 [202]. - The operating margin decreased to 6.5% in 2025 from 7.1% in 2024, reflecting a decline of 60 basis points [202]. Cash Flow and Liquidity - Operating cash flow for the three months ended March 31, 2025, was$ 1,017 million, down from $1,978 million in the same period in 2024 [185]. - Net cash provided by operating activities decreased by$ 961 million to $1,017 million in 2025, compared to$ 1,978 million in 2024 [221]. - Total sources of cash for the three months ended March 31, 2025, were $2,196 million, down$ 1,229 million from $3,425 million in 2024 [221]. - Total uses of cash decreased by$ 740 million to $2,985 million in 2025, compared to$ 3,725 million in 2024 [221]. - Cash, cash equivalents, and investments in fixed maturity and equity securities totaled $34,712 million as of March 31, 2025, a decrease of$ 1,004 million since December 31, 2024 [223]. - The company believes cash on hand and available credit will be adequate to fund expected cash disbursements over the next twelve months [235]. Debt and Capital Structure - The consolidated debt-to-capital ratio was 41.3% as of March 31, 2025, down from 43.0% as of December 31, 2024 [228]. - The company has a senior revolving credit facility of up to $4,000, maturing in April 2027, with no amounts outstanding as of March 31, 2025 [231]. - The company has an authorized commercial paper program of up to$ 4,000, with no commercial paper outstanding as of March 31, 2025 [232]. - Short-term borrowings from Federal Home Loan Banks were $250 as of March 31, 2025, down from$ 365 as of December 31, 2024 [233]. - The company intends to maintain its senior debt investment grade ratings, currently rated "A" by S&P and "BBB+" by Fitch [229]. - The company is in compliance with all debt covenants under the 5-Year Facility as of March 31, 2025 [231]. Acquisitions and Investments - Elevance Health completed the acquisition of Centers Plan for Healthy Living LLC and Centers for Specialty Care Group IPA, LLC on December 31, 2024, enhancing its Health Benefits segment [171]. - The acquisition of RSV QOZB LTSS, Inc. (CareBridge) on December 10, 2024, aligns with Carelon Services' strategy for home care management [172]. - The company made an equity investment of $2,580 in Augusta Topco Holdings, L.P. (Mosaic Health), acquiring approximately 35% ownership [173]. - Elevance Health completed the acquisition of Paragon Healthcare, Inc. on March 11, 2024, which provides infusion services and aligns with its care management vision [174]. - The sale of life and disability businesses to StanCorp Financial Group, Inc. on April 1, 2024, resulted in a gain on sale of$ 201 million [175]. Legal and Regulatory Matters - The company is involved in ongoing litigation related to antitrust claims against the BCBSA and Blue plans, with a settlement agreement amounting to $604 million approved in June 2024 [178]. - The company recognized an estimated payment obligation of$ 666 million under the Provider Settlement Agreement in September 2024 [179]. - The regulated subsidiaries exceeded all applicable mandatory risk-based capital requirements as of December 31, 2024 [234]. - There have been no material changes to long-term liquidity requirements since December 31, 2024 [236]. Tax and Expense Ratios - The benefit expense ratio increased to 86.4% for the three months ended March 31, 2025, compared to 85.6% for the same period in 2024 [190]. - The effective tax rate decreased to 21.9% for the three months ended March 31, 2025, from 23.5% in the same period in 2024 [190]. - Net investment income increased by $125 million or 26.9% to$ 590 million for the three months ended March 31, 2025 [190]. - CarelonRx Quarterly Adjusted Scripts increased by 6.9 million or 9.0% to 83.9 million for the three months ended March 31, 2025 [187].