Highmark released its third-quarter earnings report Monday, in which its top brass said the insurer expects to see elevated utilization trends persist into 2026.
The Pittsburgh-based organization, which includes Highmark Health Plans and health system Allegheny Health Network, reported a $69 million net loss and a $204 million operating loss alongside $24.6 billion in revenue through the first nine months of 2025. The bulk of that loss came from the health insurance unit, which is continuing to be pressured by care use.
Carl Daley, chief financial officer and treasurer at Highmark Health, told Fierce Healthcare that the company had expected utilization to normalize over the course of the year and priced plans accordingly. It's made adjustments in its pricing strategy for 2026 to adapt to the expectation that utilization remains high.
"For 2025, we thought the trend would subside and come down just a little bit. They remained elevated throughout the year," Daley said. "Pricing in the first half of the year did not fully contemplate the trends that we’re seeing."
Kate Musler, chief financial officer for Highmark Health Plan, told Fierce that at the high level, areas where they're seeing elevated utilization have been consistent, including GLP-1s and other pharmaceuticals.
She said the insurer is also seeing technology and artificial intelligence emerge that are improving provider coding accuracy, which can ease some of the cost pressures.
The insurance unit posted $18.7 million in revenue and a $211 million operating loss through the first three quarters of the year.
Allegheny Health Network, meanwhile, reported $4.2 billion in revenue and operating income of $79 million. That reflects a $167 million improvement year over year in operating income, according to the announcement.
That growth in net income is backstopped by improvements around volumes. Through Sept. 30, the system saw a 4% increase in patient discharges and observations along with a 6% increase in outpatient registrations. It also reported a 7% increase in physician visits and a 5% rise in emergency room visits.
Brian Devine, chief financial officer at Allegheny Health Network, told Fierce Healthcare that the volume growth doesn't merely reflect the broader trend in elevated utilization but more organic growth as a result of initiatives to drive improvement.
"Since the first quarter, we have really leaned in on service line growth," Devine said.
Highmark's diversified businesses unit posted $2.4 billion in operating revenue through the first nine months of the year, which includes $1.4 billion at United Concordia Dental and $1 billion at HM Insurance Group, which provides stop-loss coverage.