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Elevance Tops Q3, Flags 2026 Medicaid Margin Hit and Keeps 2025 Outlook

Management signaled a 2026 trough in Medicaid profitability, with formal guidance coming in January.

Overview

  • Elevance reported third‑quarter revenue of about $50.1 billion, net income near $1.2 billion, and adjusted EPS of $6.03, beating estimates.
  • The insurer said Medicaid margins are expected to decline by at least 125 basis points in 2026 due to higher acuity and utilization following eligibility reverifications.
  • Leadership plans to invest several hundred million dollars in Carelon, artificial intelligence capabilities, and Medicare Advantage star‑rating initiatives.
  • Carelon revenue rose roughly 33% to about $18.3 billion with operating income around $800 million, as the health services unit continues to scale.
  • The company reaffirmed 2025 guidance of roughly $30 adjusted EPS and a ~90% benefit expense ratio, reported a 91.3% quarterly MLR, held medical membership at 45.4 million, and saw shares turn lower after the call as investors focused on 2026 pressures.