Large group health looks good in Q2: Elevance

Executives from Elevance Health seem to be happy with the recent performance of their group health business.

Elevance, the Indianapolis-based company formerly known as Anthem, is the parent of 14 Blue Cross and Blue Shield companies. The companies provide or administer major medical coverage for 46 million people, or 14% of the U.S. population.

The company held a conference call to go over second-quarter results Wednesday. Executives spent most of their time talking about their worries about their Medicare plans and state Medicaid contracts, but they also touched, briefly, on the commercial insurance business.

Morgan Kendrick, president of the commercial health benefits business, said Elevance is renewing about 25% of its large, fully insured group health plan accounts this month and likes what it’s seeing.

“We feel really good about how we’re positioned for continued growth and expansion in that business,” Kendrick said.

Earlier this year, Elevance reported having some problems with loss of large-group business.

Now, “we’re seeing persistency up a bit,” Kendrick said.

Premiums also seem to be increasing enough to improve profit margins, Kendrick added.

Sales to new large-group customers are also strong, and existing employer group clients have been giving Elevance a bigger share of their benefit plan business, according to Elevance Chief Executive Officer Gail Boudreaux.

What it means

Both UnitedHealth and Elevance seem to be more comfortable with their group health operations now than with their government plan operations.

Related: UnitedHealth reports strong earnings, despite Change cyberattack

That might not help much with pricing but could help stability in plan and network options.

The earnings

Elevance as a whole is reporting $2.3 billion in net income for the second quarter on $44 billion in revenue, up from $1.9 billion on $44 billion in revenue for the second quarter of 2023.

The health benefits business, which includes the Elevance group health operations along with individual commercial health insurance and Medicaid plans, posted a $2.1 billion operating gain on $37 billion in operating revenue, compared with an operating gain of $2.1 billion on $38 billion in operating revenue for the year-earlier quarter.

Group health numbers

Enrollment in employer-sponsored health plans insured or administered by Elevance increased increased 0.8% between the second quarter of 2023 and the latest quarter, to 32.5 million.

Here’s how enrollment changed for four types of group health coverage, year-over-year:

• Self-insured plans administered by Elevance: 20.5 million (up 1.9%)
• Big, national employers with “BlueCard” program plans: 6.7 million (down 0.4%
• Fully insured group health: 3.6 million (down 3.1%)
• Federal Employees Health Benefits: 1.7 million (up 1.6%)

Because overall enrollment fell 4.6%, the share of all Elevance major medical coverage users in employer-sponsored plans increased to 71%, from 67% a year earlier.