Elevance Health Q1 2025: Revenue Growth, Medicare Advantage Expansion, and Carelon Rx Gains
Elevance Health, Inc. reported strong financial results for the first quarter of 2025, with operating revenue reaching $48.8 billion, a 15% increase compared to the same period last year. This growth was driven by premium yield increases within its Health Benefits segment, expansions through recent acquisitions, a rise in Medicare Advantage and Individual ACA plan memberships, and growth in CarelonRx product revenue. Despite membership attrition in Medicaid, the company's overall medical membership rose by approximately 99,000 to 45.8 million, underscoring steady growth in risk-based Medicare Advantage and commercial segments.
The benefit expense ratio rose to 86.4%, reflecting higher Medicaid medical costs, while the operating expense ratio improved to 10.9%, reflecting efficient cost management and expense leverage. Operating cash flow declined by around $1.0 billion due to timing-related working capital effects, with cash and investments at the parent company totaling approximately $1.4 billion at quarter-end.
Elevance Health repurchased 2.2 million shares for $880 million and paid a quarterly dividend of $1.71 per share, with $8.4 billion remaining authorized for share repurchases. Within its segments, Health Benefits recorded $41.4 billion in operating revenue, up 11% year-over-year, with an operating gain of $2.2 billion despite Medicaid cost pressures. Carelon, representing pharmacy and services, increased operating revenue by 38%, totaling $16.7 billion, and achieved a 34% rise in operating gain to $1.1 billion, driven by acquisitions and operational scaling.
The company emphasizes a whole-health model integrating personalized support, digital solutions, and a comprehensive healthcare ecosystem to enhance outcomes and cost efficiency. Management highlighted ongoing strategic initiatives to expand and optimize service offerings, seeking to position Elevance Health as a lifetime trusted health partner. Key factors affecting future performance include healthcare cost trends, regulatory environments, and membership dynamics across diverse insurance products.
Elevance Health serves over 110 million consumers through a broad portfolio encompassing medical, pharmacy, behavioral, clinical, home health, and complex care solutions. The company noted risks related to regulatory compliance, healthcare market shifts, technology integration, and capital management in its forward-looking statements.
The firm will host a webcast and conference call to discuss the quarterly results and outlook, reinforcing transparency with investors. The sustained growth in Medicare Advantage and Carelon services suggests a strategic focus on higher-margin and integrated care solutions amid evolving healthcare delivery models.