Elevance Preparing to Exit Several Medicaid States
Elevance Health Inc. is pulling out of the Washington, D.C. Medicaid market and plans to exit other states by the end of next year, executives told analysts and investors last week.
Speaking after Indianapolis-based Elevance, which runs the Anthem and Wellpoint insurance brands, reported second-quarter net profits of $1.45 billion on nearly $50.5 billion in total revenues, President and CEO Gail Boudreaux said the moves are part of a broader assessment of Elevance’s portfolio that is focusing on “a path to sustainable performance.”
As of June 30, Elevance plans had Medicaid more than 8.3 million Medicaid members, down from 8.5 million on Dec. 31 and 8.9 million at the end of 2024. Those members generate about $56 billion revenue annually but the business unit loses money: Despite mid-year rate increases in some states, executives are still forecasting that Elevance’s Medicaid operating margin in 2026 will be negative 1.75%.
On a conference call with analysts July 15, Boudreaux and her team would not be drawn on which other states the company might leave in the next 18 months. At the end of 2025, Elevance ran Medicaid plans in 22 states and in Puerto Rico in addition to D.C.
“We’ve been doing the same thing in Medicaid and have made those same kind of decisions,” Boudreaux said of the portfolio review. “So it’s not just about what 2026 or ’27 look like. This is really about the long-term sustainability of those markets.”
“We are not assuming a material improvement in Medicaid trend in the back half of the year,” Kaye said. “So the way I'd summarize it is as follows: elevated but understood trend, improving rate alignment, targeted cost actions underway.”
Shares of Elevance (Ticker: ELV) fell after the earnings report and conference call—despite executives raising their full-year profit outlook—as investors focused on rising medical costs, something that UnitedHealth Group Inc. leaders also pointed to in their report. In trading on the afternoon of July 17, they were changing hands around $370, which was down about 11% from the Friday before. Year to date, the stock is still up slightly, which has grown Elevance’s market capitalization to more than $80 billion.
About the Author
Geert De Lombaerde
A native of Belgium, Geert De Lombaerde has more than two decades of business journalism experience and writes about markets and economic trends for Endeavor Business Media publications Healthcare Innovation, IndustryWeek, FleetOwner, Oil & Gas Journal and T&D World. With a degree in journalism from the University of Missouri, he began his reporting career at the Business Courier in Cincinnati and later was managing editor and editor of the Nashville Business Journal. Most recently, he oversaw the online and print products of the Nashville Post for more than a decade and reported primarily on Middle Tennessee’s finance sector as well as many of its publicly traded companies.