Elevance Health has filed a lawsuit against the Department of Health and Human Services over its Medicare Advantage star ratings, seeking to have its 3.75 score adjusted to a 4-star rating. The insurer claims that the current rating system, influenced by statistical variances and a single secret shopper call, has cost it $375 million and negatively impacted member benefits. Elevance, which operates in 22 states and Puerto Rico, previously succeeded in a similar lawsuit regarding the 2024 ratings.
Elevance Health plans to acquire CareBridge for approximately $2.7 billion, aiming to enhance its Carelon home health business. CEO Gail Boudreaux emphasized that this acquisition will accelerate growth and improve healthcare spending management, while also integrating technology for long-term care services. Despite a recent decline in quarterly net income, Elevance is focused on investing in AI-driven solutions to enhance member and provider experiences.
Elevance Health is set to acquire CareBridge, a home health company, for $2.7 billion. CEO Gail Boudreaux highlighted that CareBridge will be integral to Carelon's home health business, enhancing services for individuals with complex and chronic conditions. Founded in 2019, CareBridge operates in 17 states and the District of Columbia.
Elevance Health is laying off 123 employees in California, with 64 at a Carelon office in Cerritos and 59 at Anthem Blue Cross in Woodland Hills, as part of permanent job cuts linked to declining Medicare Advantage Star Ratings and a 22.5% drop in Q3 net income. The layoffs follow a challenging earnings call where CEO Gail Boudreaux discussed the impact of lower ratings on the company's performance. Additionally, UnitedHealth Group's Optum announced 524 layoffs across California, primarily affecting urgent care facilities.
Elevance Health's CEO, Gail Boudreaux, announced the company is exploring options following a decline in its Medicare Advantage Star Ratings for 2025, which affects member enrollment in higher-rated plans. Despite improvements in nearly 60% of measures for 2026, a narrow miss on a key contract led to significant rating impacts. The situation reflects broader industry challenges, with other insurers like UnitedHealthcare and Humana also contesting their ratings amid increased cut points.
Elevance Health reported a 22.5% decrease in third-quarter net income to $1 billion, despite a year-to-date increase to $5.5 billion. Shares fell 12% after the company lowered its full-year earnings forecast, citing higher medical expenses and challenges in the Medicaid sector. CEO Gail Boudreaux expressed confidence in long-term growth while addressing operational efficiencies amid a dynamic environment.
Elevance Health reported a $1 billion profit in Q3, falling short of expectations due to rising medical costs and a medical loss ratio of 89.5%. Despite a year-over-year profit decline of 21.2%, the company saw revenue growth to $44.7 billion, driven by its health benefits segment, although Medicaid membership dropped by 1.5 million. The firm has adjusted its earnings guidance for the year down to $33 per share.
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