Elevance Health Faces Stock Plunge Amid Rising Medicaid Costs

The health insurer's earnings fell short due to elevated medical expenses and declining Medicaid enrollments, prompting a forecast cut.

Elevance Health's shares dropped over 11% following a disappointing third-quarter earnings report, with adjusted EPS of $8.37 missing the $9.66 forecast.
The company attributed the earnings shortfall primarily to increased medical costs in its Medicaid business, which saw a 19% drop in membership due to eligibility redeterminations.
Elevance has revised its full-year profit outlook, lowering its adjusted EPS expectations from $37.20 to $33.00, citing the timing mismatch between Medicaid rates and higher patient acuity.
The broader health insurance sector is grappling with rising medical claims and reduced Medicare and Medicaid payouts, impacting companies like Molina Healthcare and Centene as well.
Despite the current challenges, Elevance's revenue increased by 5.3% to $45.1 billion, driven by higher premiums and growth in its CarelonRx product segment.