As publicly traded insurers report their third-quarter 2023 financials this fall, two of the Medicare Advantage organizations most impacted by the 2024 Star Ratings recently expressed confidence in their ability to regain higher marks, driven in part by increased adoption of value-based care models.
For the quarter ending Sept. 30, Elevance Health, Inc. beat Wall Street expectations with adjusted earnings per share (EPS) of $8.99, an increase of roughly 20% over the third quarter of 2022, and recorded operating revenue of $42.5 billion, up 7.2% from the prior-year quarter. Its health benefits operating margin of 5.0% was also above consensus, aided by a medical loss ratio of 86.8%, which came in lower (better) than 87.2% reported in the year-ago quarter — fundamentals that Goldman Sachs viewed as “generally favorable” in an Oct. 18 note to investors. The insurer ended the quarter with 47.3 million medical members, a year-over-year increase of 42,000 lives, reflecting growth in its Affordable Care Act, BlueCard and MA businesses. During the quarter, however, membership fell by 664,000, driven by attrition in Medicaid due to eligibility redeterminations and a new entrant into one of the insurer’s state programs in July, explained Chief Financial Officer John Gallina during a conference call held on Oct. 18 to discuss third-quarter 2023 earnings.