Q4 2025 Elevance Health Inc Earnings Call Transcript
Key Points
- Elevance Health Inc (ELV) reported a strong financial performance with adjusted diluted earnings per share of $30.29 for the full year 2025, exceeding expectations due to favorable tax items.
- The company is focused on improving affordability and simplifying healthcare, with strategic investments in Carelon and CarelonRx showing strong growth, particularly in external sales.
- Elevance Health Inc (ELV) has a clear strategy for 2026, emphasizing execution and repositioning to strengthen margins and improve performance consistency.
- The commercial business showed healthy momentum, particularly in national accounts, supported by favorable client retention and new opportunities.
- Elevance Health Inc (ELV) is confident in achieving at least 12% adjusted EPS growth in 2027, driven by multiple independent levers and disciplined execution across its diversified platform.
- Medicaid operating margins are expected to be pressured in 2026, with a forecasted margin of approximately -1.75% due to elevated utilization and misalignment between rates and member acuity.
- Medicare Advantage membership is expected to decline in the high 10s percentage range in 2026, reflecting deliberate portfolio actions and market stability challenges.
- The expiration of enhanced premium subsidies is expected to pressure retention and increase lapse activity in the individual ACA market.
- Elevance Health Inc (ELV) anticipates a low single-digit percentage decline in operating revenue for 2026, driven by a low double-digit percentage decline in risk-based membership.
- The company is facing challenges in maintaining stable benefits and affordability for seniors in the Medicare Advantage program due to flat advanced notice rates that do not keep pace with current medical cost trends.
Ladies and gentleman, thank you for standing by and welcome to the Elevance Health fourth quarter conference call. (Operator Instructions) As a reminder, today's conference is being recorded.
I would now like to turn the conference over to the company's management. Please go ahead.
Good morning and welcome to Elevance Health's fourth quarter 2025 earnings conference call. My name is Nathan Rich, Vice President of Investor Relations. With us on the earnings call are Gail Boudreaux, President and CEO; Mark Kaye, our CFO; Pete Haytaian, President of Carelon; Morgan Kendrick, President of our Commercial Health Benefits business; and Felicia Norwood, President of our Government Health Benefits business.
Gail will begin the call with a discussion of our 4th quarter performance, our 2026 guidance and the progress we continue to make on our strategic priorities. Mark will then discuss our financial results and outlook in greater detail. After our prepared remarks. The team will
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