Elevance Health(US:ELV)2026-02-06 19:57Revenue Sources - Approximately 32% of total consolidated revenues were generated from U.S. government agencies for the years ended December 31, 2025, 2024, and 2023, respectively [25]. - The Medicaid business includes managed care alternatives through public-funded healthcare programs, covering various services in 17 states and Puerto Rico [41]. - Approximately 53.5% of premium revenue and 18.7% of medical membership were subject to minimum MLR regulations for the year ended December 31, 2025 [99]. - 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 [99]. Health Benefits and Services - The Health Benefits segment offers a comprehensive suite of health plans and services, with key drivers including membership levels, premium pricing, and medical cost trends [27]. - CarelonRx, which includes pharmacy services, was enhanced by the acquisition of Paragon Healthcare, Inc. in March 2024, contributing to affordability and outcomes for members [27]. - The Carelon Services segment integrates physical, behavioral, pharmacy, and social-care capabilities, targeting chronic and complex populations [28]. - Carelon integrates services to deliver whole health affordably, powered by analytics [38]. - Carelon Health provides value-based solutions and comprehensive care management services, including home health and behavioral health management [47]. - A comprehensive behavioral health case management program supports members with various conditions, promoting access to appropriate treatment and community resources [71]. - The company has implemented a "Food as Medicine" strategy across multiple business lines to address food and nutrition insecurity among its members [73]. - The company focuses on care coordination based on nationally recognized criteria to improve inpatient and outpatient care, aiming to reduce preventable hospital admissions [75]. - The company has developed partnerships with network physicians and hospitals to enhance healthcare quality and social impact services, recognized by NCQA accreditation [76]. - The company utilizes HEDIS measures to improve care for chronic diseases and reduce healthcare disparities, including diabetes and heart disease management [77]. Market Position and Competition - The managed care industry is highly competitive, with intense competition driven by aggressive marketing, pricing, and new strategic alliances [43]. - The company leverages its BCBS brand for greater recognition and competitive positioning, being the largest participant in its branded markets [45]. - Pricing strategies are based on predictive modeling and proprietary research, aiming for growth through market expansions and regulatory changes [46]. - CarelonRx pricing is competitive, utilizing discounts off average wholesale prices and rebate projections to maintain market competitiveness [54]. Regulatory Environment - The Consolidated Appropriations Act of 2023 allows states to begin removing ineligible beneficiaries from Medicaid programs, impacting enrollment dynamics [86]. - The Inflation Reduction Act of 2022 includes provisions that may increase Public Exchange coverage premiums after enhanced PTCs expire on December 31, 2025 [88]. - The ACA has introduced new risks and regulatory challenges, significantly impacting the company's business model and product administration [96]. - The company anticipates ongoing regulatory guidance from CMS regarding Medicare ratings and quality bonus payments, which could affect financial recoveries [97]. - The company is required to comply with various BCBSA license agreements, including maintaining at least 80% of annual combined local net revenue under the BCBS names and marks [80]. Financial Performance - Net cash provided by operating activities decreased to $4,290 million in 2025 from $5,808 million in 2024, a decline of $1,518 million [371]. - Total sources of cash fell to $6,458 million in 2025, down from $12,815 million in 2024, a decrease of $6,357 million [371]. - Issuances of short- and long-term debt decreased significantly to $629 million in 2025 from $6,200 million in 2024, a drop of $5,571 million [371]. - The company repurchased and retired $2,605 million of common stock in 2025, compared to $2,900 million in 2024, a reduction of $295 million [371]. - Cash dividends paid increased slightly to $1,529 million in 2025 from $1,508 million in 2024 [371]. - The net increase in cash and cash equivalents was $1,203 million in 2025, compared to an increase of $1,828 million in 2024 [371]. - The company reported a total of $69 million from sales, maturities, calls, and redemptions of investments in 2025, down from $586 million in 2024 [371]. - The company had no purchases of investments in 2025, while it had $2,700 million in 2024 [371]. - Other sources of cash, net, amounted to $1,391 million in 2025, with no contributions in 2024 [371]. - The effect of foreign exchange rates on cash and cash equivalents was a decrease of $5 million in 2025 [371]. - As of December 31, 2025, consolidated cash, cash equivalents, and investments totaled $37,236 million, an increase of $1,520 million from December 31, 2024 [374]. - The debt-to-capital ratio was 42.1% as of December 31, 2025, down from 43.0% in 2024, indicating improved leverage [378]. - The company expects to receive approximately $2,100 million in dividends from subsidiaries during 2026, compared to $2,543 million received in 2025 [386]. - Future debt and estimated interest payments total $54,160 million, with $2,490 million due within the next twelve months [395]. - The company has a remaining Board authorization of $6,695 million for common stock repurchases as of December 31, 2025 [392]. - The 5-Year Facility was amended to increase available credit from $4,000 million to $5,000 million and extend the maturity date to September 2030 [381]. - Cash disbursements are primarily driven by claims payments, administrative expenses, and capital expenditures, with adequate liquidity expected from cash on hand and credit facilities [388]. - The company maintains a commercial paper program of up to $5,000 million, with no amounts outstanding as of December 31, 2025 [384]. - Future estimated payments for operating leases are $743 million, with $159 million due within the next twelve months [395]. - The company is in compliance with all debt covenants under the 5-Year Facility as of December 31, 2025 [382]. Employee and Culture - The company invested an average of approximately 26 hours of training and development per associate in 2025 [125]. - The company’s employee population consisted of approximately 97,100 individuals as of December 31, 2025, with 99% employed full-time [118]. - The company completed a gender and race pay equity review in 2025, finding female associates earn more than 99 cents for every dollar earned by similarly situated male associates [124]. - The company’s culture and engagement initiatives include over 20% of the U.S. workforce participating in Business Resource Groups in 2025 [122]. Transparency and Compliance - The Health Plan Transparency Rule requires the company to disclose detailed pricing information on a monthly basis, starting from July 2022 [114].