Elevance Health’s shares took a dip on Thursday as the company reaffirmed its outlook for 2025 and revealed plans to exit certain underperforming Medicare Advantage markets.
Chief Financial Officer Mark Kaye spoke at the Wells Fargo Healthcare Conference this morning, where he announced that the insurer will exit the standalone Part D market as well as certain MA plans and counties that are not meeting expectations. He said that will impact about 150,000 Medicare Advantage members.
Elevance Health is putting a focus on Medicare Advantage HMO and dual-special needs plans (D-SNP), which Kaye said represent strong product lines. In addition, he said that the insurer took a disciplined approach to designing the benefits offerings it plans to make available for 2026.
At the same time, we were also pretty thoughtful about our design for next year as we wanted to emphasize member engagement and retention,” he said.
Shares in Elevance Health were down by about 4% as of 3:30 p.m. ET.
The company also released a Securities and Exchange Commission filing Thursday where it confirmed its outlook for 2025. Elevance expects about $30 in earnings per share for the year, as well as a medical loss ratio of 90%.
Overall, the number of options for individuals looking to purchase standalone prescription drug coverage in Medicare has declined over the past several years, according to a July analysis from KFF. In 2025, the beneficiary on average could choose from 14 different PDP options, down from 30 options in 2021.
A separate KFF report found that Elevance specifically had about 400,000 individuals enrolled in its standalone Part D plans, the sixth-highest tally among national insurance carriers.
Kaye said the decision to exit these markets was “not made lightly,” but allowed the insurer to focus its resources on Medicare Advantage and D-SNP.
“We’re focused on controlling the controllable,” he said.
Other industry peers have taken similar steps in exiting underperforming MA plans and regions, with market leader UnitedHealthcare revealing in Q2 that its departures would impact 600,000 enrollees. The sector broadly has been battered by elevated utilization and regulatory changes that impact the bottom line.
In addition to ongoing headwinds in Medicare Advantage, Kaye highlighted financial pressure in the Affordable Care Act market as well as Medicaid. He said that rate filings for the ACA plans reflect the broader push to normalize margins for 2026.
In Medicaid, he cited “a range of potential outcomes” that is beyond the scope of a normal year, given program changes and budgetary pressures facing states as well as early implementation of changes codified in the One Big Beautiful Bill Act.
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