Elevance Health(ELV)2025-02-20 20:58Revenue Sources - Approximately 31%, 29%, and 28% of total consolidated revenues were generated from U.S. government agencies for the years ended December 31, 2024, 2023, and 2022, respectively[24]. - The company’s Medicaid plans cover various state-sponsored programs and provided services in multiple states, including California, Florida, and Texas in 2024[37]. - The company anticipates growth in Public Exchange membership as former Medicaid members seek alternative coverage options, with plans to enter select service areas in Florida, Maryland, and Texas in 2025[31]. - The Consolidated Appropriations Act of 2023 has led to a decline in Medicaid membership, with expectations for growth in commercial plans as members seek alternative coverage[80]. - The Inflation Reduction Act of 2022 has extended enhanced Premium Tax Credits through 2025, supporting growth in Individual Public Exchange enrollment[81]. Health Services and Products - The Health Benefits segment offers a comprehensive suite of health plans and services, including risk-based and fee-based products, catering to various customer types such as Individual, Employer Group, Medicare, and Medicaid members[26]. - CarelonRx, the pharmacy services segment, includes a comprehensive portfolio of pharmacy services and recently expanded through the acquisition of Paragon Healthcare, Inc. in March 2024[26]. - Carelon Services aims to deliver whole health affordably by integrating physical, behavioral, pharmacy, and social services[41]. - Carelon Health provides value-based whole health solutions, managing home health and post-acute care costs, and has completed the acquisition of CareBridge to enhance virtual care for complex Medicaid and Medicare patients[42]. - The company’s product development emphasizes the unique needs of different customer types, aiming to provide value while achieving profitability[29]. Digital and Technological Advancements - The company continues to enhance customer interactions through digital technology, improving service quality and optimizing administrative costs[23]. - The digital engagement platform, Sydney Health, provides members with personalized health resources and virtual care services[66]. - Carelon's pricing strategy is based on predictive modeling and proprietary research, positioning the company for growth opportunities in new and existing markets[46]. Quality and Compliance - Carelon was awarded the NCQA 2023-2024 Innovation Award for advancements in maternal and neonatal outcomes, highlighting its commitment to quality healthcare[67]. - The company has incorporated several quality healthcare measures, including HEDIS, into its accreditation processes to improve care quality[68]. - Carelon Medical Benefits Management, Inc. aims to promote appropriate and affordable member care, focusing on areas such as maternity care and oncology drugs[68]. - The company has developed programs to address healthcare quality by identifying and closing care gaps, including a social determinants of health program[70]. - The company has implemented a "Food as Medicine" strategy to address food and nutrition insecurity among its members[71]. Financial Performance and Cash Flow - The net cash provided by operating activities decreased to $5,808 million in 2024 from $8,061 million in 2023, a decline of $2,253 million[353]. - Total sources of cash increased to $12,815 million in 2024, up from $8,839 million in 2023, reflecting a change of $3,976 million[353]. - The company issued $6,200 million in short- and long-term debt in 2024, a significant increase from $626 million in 2023[353]. - Cash dividends paid increased to $1,508 million in 2024 from $1,395 million in 2023, an increase of $113 million[353]. - The company reported a net increase in cash and cash equivalents of $1,828 million in 2024, compared to a decrease of $861 million in 2023[353]. Debt and Liquidity - The company's consolidated debt-to-capital ratio increased to 43.0% as of December 31, 2024, compared to 38.9% in 2023[360]. - Future debt and estimated interest payments total $52,073 million, with $2,855 million due within the next twelve months[376]. - The company has a common stock repurchase program authorized for up to $9,300 million, with no specified duration[374]. - The company has a senior revolving credit facility providing up to $4,000 million, maturing in April 2027, with a current debt-to-capital ratio of 43.0%[363]. - The company is in compliance with all debt covenants under its 5-Year Facility as of December 31, 2024[364]. Employee Engagement and Development - Employee population as of December 31, 2024, consisted of approximately 104,200 individuals, with 99% employed full-time[107]. - Company conducts annual internal associate engagement surveys to gather feedback and improve policies[111]. - Company achieved a pay equity analysis showing that pay for women is 99.2% of men and pay for people of color is 99.8% of white associates[113]. - In 2024, the company invested an average of approximately 27 hours of training and development per associate to enhance talent development and retention[114]. Market Competition - The managed care industry is highly competitive, with intense competition driven by aggressive marketing, pricing, and technological advancements[43]. - Carelon's provider networks offer competitive unit cost positions, allowing for a broad range of affordable health benefit products[47]. - The company employs a multi-year contracting strategy with providers to limit exposure to medical cost inflation and improve cost predictability[56]. - Carelon's medical management programs are designed to improve care quality and promote cost-effective medical care, administered by physicians and nurses[62]. Regulatory Environment - The company is subject to comprehensive state, federal, and international regulations that impact its operations and may lead to increased costs[76]. - The company’s insurance and HMO subsidiaries must comply with statutory risk-based capital requirements, which they have exceeded as of December 31, 2024[88]. - The ACA continues to introduce new risks and regulatory challenges that impact the company’s business model and strategy[89]. - The company is required to pay an annual license fee to the BCBSA based on enrollment and must comply with various operational requirements[73]. - Approximately 54.2% of premium revenue and 18.4% of medical membership were subject to minimum MLR regulations for the year ended December 31, 2024[90]. Medicare Advantage - 53% of Medicare Advantage members are enrolled in plans rated at least 4.0 Stars or higher, an increase from 34% in the original 2024 Star Rating[91]. - Expected reduction in 2026 operating revenue of approximately $183 million due to changes in Medicare Advantage Star Ratings[91]. - Anticipated growth in Public Exchange membership as former Medicaid members seek alternative coverage options[91]. - Company is entering select service areas in Florida, Maryland, and Texas in 2025, evaluating further expansion opportunities[91].