Core Insights - Elevance Health anticipates elevated medical costs in its Medicaid business to continue into next year, with potential subsidence only by 2027 [1][2] - The company's third-quarter profit exceeded expectations, but concerns over Medicaid costs led to a 4% drop in shares [1] Medicaid Business - The Medicaid segment is under pressure due to a churn in enrollment, with healthier members dropping off and those requiring more medical services taking their place [2][3] - Chief Financial Officer Mark Kaye indicated that 2026 will be the low point for Medicaid profitability, with improvements expected through 2027 [2] - Elevated demand for behavioral health services and weight-loss drugs is contributing to increased costs in government-backed plans [3] Financial Performance - Elevance's third-quarter medical loss ratio was reported at 91.3%, slightly better than analysts' expectations of 91.73% [6] - The adjusted profit per share for the third quarter was $6.03, surpassing estimates of $4.93 [6] Future Outlook - The company expects higher costs in the fourth quarter as members utilize benefits ahead of changes in individual plans under the Affordable Care Act [4] - The expiration of additional premium tax credits in 2026 adds uncertainty to patient enrollments [4] - Elevance plans to provide a formal forecast for 2026 in January, while reaffirming its 2025 adjusted profit forecast of approximately $30 per share and a medical loss ratio of 90% [5]

Core Points - UnitedHealth Group announced the unexpected departure of CEO Andrew Witty, leading to a nearly 10% drop in shares during premarket trading [1][3] - The company suspended its 2025 forecast due to rising medical costs affecting new enrollees in private Medicare plans, which have been higher than anticipated [5][6] - Stephen Hemsley, the former CEO, will succeed Witty and has expressed confidence in the company's growth potential, aiming for a return to long-term growth objectives of 13 to 16 percent by 2026 [6][7] Company Overview - Andrew Witty stepped down for "personal reasons" and will serve as a senior advisor to his successor, Stephen Hemsley, who previously led the company from 2006 to 2017 [2][4] - Witty's tenure included significant challenges such as government investigations, a cyberattack, and increased medical costs, which have impacted the entire insurance industry [4][5] - The company experienced its first earnings miss since 2008 in April, resulting in a market capitalization loss of nearly $190 billion [6] Industry Context - Rising medical costs have affected not only UnitedHealth Group but also other insurance companies, with CVS Health, Elevance Health, Humana, and Cigna all experiencing stock declines [3][5] - The increase in medical expenses is attributed to more seniors returning to hospitals for delayed procedures post-COVID-19 pandemic [5]