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INDIANAPOLIS (AP) — A growing Medicaid business helped Elevance Health’s profit jump 11% as the health insurer turned in a better-than-expected first quarter.
But company shares tumbled at the start of trading Wednesday after Elevance also announced an updated 2023 forecast that fell short of Wall Street expectations.
In the first quarter, the Blue Cross-Blue Shield insurer saw enrollment in Medicaid programs it manages for states jumped 9% to 11.9 million people. The company’s total membership grew 3% to top 48 million.
The state-and-federally funded Medicaid program provides coverage to people with low incomes. Medicaid enrollment swelled nationally during the COVID-19 pandemic, when states were prevented from cutting people who no longer qualified for coverage. But that is expected to start changing this year as states resume removing ineligible people.
Insurers like Elevance will try to shift customers no longer eligible for Medicaid to their individual insurance plans.
Overall, Indianapolis-based Elevance earned $1.99 billion in the quarter. Earnings, adjusted for one-time gains and costs, were $9.46 per share.
Operating revenue, which excludes investment income, grew more than 10% to $41.9 billion.
The results beat Wall Street expectations. The average estimate of 16 analysts surveyed by Zacks Investment Research was for earnings of $9.26 per share.
Analysts also expected $40.89 billion in revenue.
Aside from Medicaid growth, Elevance Health also added customers to its Medicare Advantage plans. Those are privately run versions of the federal government’s Medicare program mostly for people age 65 and older.
Elevance raised its 2023 earnings expectations by a dime compared to the forecast it laid out in late January. The insurer said Wednesday that it now expects adjusted earnings to top $32.70 per share this year.
Analysts forecast $32.79 per share, according to FactSet.
Shares of Elevance Health Inc. fell 5% to $457.17 after markets opened Wednesday. Broader indexes fell slightly at the start of trading.
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Elements of this story were generated by Automated Insights (http://automatedinsights.com/ap) using data from Zacks Investment Research. Access a Zacks stock report on ELV at https://www.zacks.com/ap/ELV