UPDATED: 2 p.m. ET
Elevance Health's top brass told investors Wednesday that the insurer is on pace to end the second quarter of 2026 with about 1.2 million members in its individual market plans.
CEO Gail Boudreaux said on the company's earnings call that the company saw "moderately stronger retention" in the Affordable Care Act segment through Q1, and that it was one of the contributing factors to its better-than-expected results in the quarter.
The membership growth in the individual market plans reflected a shift toward bronze tier coverage following the expiration of enhanced premium tax credits at the beginning of this year, said Chief Financial Officer Mark Kaye. Part of why this trend contributed to lower medical costs is that utilization in these plans is frequently backloaded, he said.
It's not much of a surprise that consumers who are sticking with ACA exchange plans are shifting to bronze coverage, as these plans generally carry lower premiums. This can alleviate the sticker shock for people who previously received the enhanced tax credits, though bronze plans often trade lower premiums for higher deductibles and out-of-pocket costs.
Kaye said that the company feels good about its position in the ACA market, and the shift to bronze tier plans has been positive in certain markets. However, the company is still taking a prudent approach to forecasting around the ACA market.
"However, given the unique market dynamics this year and a significant shift in product mix, it is still early to revise our full year outlook," Kaye said.
PUBLISHED: 7:33 a.m. ET
Elevance Health is raising its guidance for 2026 even as its Q1 profits declined year-over-year.
The company reported $1.8 billion in the first quarter of 2026, down 19.2% from $2.2 billion in the prior-year quarter. The results did exceed Wall Street analysts' expectations, per Zacks Investment Research.
Revenue in the quarter was $50.2 billion, up 2.6% from Q1 2025, where Elevance reported $48.9 billion in revenue. The revenue figure also beat the Street, according to Zacks.
In addition, Elevance Health said in the earnings report that its medical loss ratio for the quarter was 86.8%, up slightly compared to Q1 2025 and reflecting a higher cost trend in the Medicaid business. Cost pressures in Medicaid were partially offset by improved Medicare performance, per the report.
Based on these results, the company boosted its guidance and now expects to earn at least $26.75 in earnings per share for the full year. Its previous outlook anticipated at least $25.50 in EPS.
"Our first quarter results exceeded expectations, reflecting underlying business strength and improving claims experience," CEO Gail Boudreaux said in the press release. "We are raising our full-year adjusted EPS guidance, supported by greater visibility into the balance of the year."
"Our actions are driving more consistent performance and position Elevance Health for continued improvement over time," she said.
In its health benefits segment, Q1 revenues were $42.5 billion, the company said, reflecting increased premium yields.
The insurer had 45.4 million members in Q1, up by about 186,000 compared to the end of 2025. This reflects growth in its commercial fee-based plans, but that increase was partially offset by declines in Medicare Advantage and group employer risk-based plans as a result of efforts to "reposition" those businesses amid ongoing cost pressures.
Revenues at Carelon, meanwhile, grew 7.9% year-over-year to $18 billion, according to the earnings report. The company said the growth was supported by revenue at CarelonRx and the ongoing scaling of its Carelon Services unit, which offers solutions to support risk-based models.