Elevance Health has expanded into select service areas in Florida, Maryland, and Texas in 2025, using their Simply Healthcare and Wellpoint brands. They are also actively evaluating expansion opportunities in additional marketplaces beyond 2025.

On December 31, 2024, Elevance Health completed the acquisition of Centers Plan for Healthy Living LLC and Centers for Specialty Care Group IPA, LLC. This acquisition aligns with their strategic plan to grow the Health Benefits segment and leverage industry-leading expertise while serving Medicaid and dual-eligible populations.

The 2023-2024 Business Efficiency Program was finalized as of December 31, 2024, except as to cash outlays related to personnel-related costs associated with this program, which are expected to be paid through 2025. This program aims to enhance operating efficiency, refine the focus of investments, and optimize the physical footprint.

Total medical membership declined by 0.5% primarily driven by attrition in Medicaid membership and decreases in Commercial Fee-Based business. These decreases were partially offset by increases in Medicare Advantage and Individual ACA businesses.

Operating cash flow decreased to $1,017 million from $1,978 million in the prior year. The decrease in net cash provided by operating activities was primarily due to timing related changes in working capital.

CMS released the 2025 Star Ratings in October 2024, which will be used to determine the Medicare Advantage bonus payments in 2026. The 2025 Star Ratings reflect that 38% of Medicare Advantage members were enrolled in plans rated at least 4.0 Stars or higher.

States were permitted to begin removing ineligible beneficiaries from their Medicaid programs starting April 1, 2023, and the majority of our Medicaid markets began doing so as of June 30, 2023. CMS has provided that states have until December 31, 2025 to complete these eligibility redeterminations.

The Tri-Agencies issued final regulations related to mental health parity that will require health plans to make administrative and operational changes to comply. Litigation has been filed challenging these final regulations.

The U.S. Department of Justice filed a civil lawsuit against Elevance Health, Inc. alleging that we falsely certified the accuracy of the diagnosis data we submitted to CMS for risk-adjustment purposes under Medicare Part C and knowingly failed to delete inaccurate diagnosis codes.

The company acknowledges competitive pressures and the ability to adapt to changes in the industry and develop and implement strategic growth opportunities as a risk factor.

The company highlights its ability to contract with providers on cost-effective and competitive terms as a key factor influencing its financial performance.

CMS released 2025 Star Ratings in October 2024, which will be used to determine our Medicare Advantage bonus payments in 2026. Our 2025 Star Ratings reflect that 38% of our Medicare Advantage members were enrolled in plans rated at least 4.0 Stars or higher. We expect this change will result in a reduction to our 2026 operating revenue of approximately $183 million.

Management implemented the “2023-2024 Business Efficiency Program” to enhance operating efficiency, refine the focus of investments and optimize the physical footprint.

The operating expense ratio decreased from 11.6% to 10.9%, indicating improved efficiency in managing operating costs. This decrease is primarily due to operating expense leverage associated with growth in operating revenue and ongoing cost management.

The ratio of current year medical claims paid as a percent of current year net medical claims incurred was 66.2% and 63.8% for the three months ended March 31, 2025 and 2024, respectively. This ratio serves as an indicator of claims processing speed whereby speed for claims payments was slightly faster during the three months ended March 31, 2025 as compared to the three months ended March 31, 2024.

The company acknowledges the risk of failure to effectively maintain and modernize our information systems as a risk factor.

Carelon Services integrates physical, behavioral, pharmacy, and social services with the aim of delivering whole health affordably by offering a broad array of healthcare related services and capabilities to internal and external customers through our Carelon Health and Carelon Insights businesses.

If the Provider Settlement Agreement is approved, it will contain certain non-monetary terms including various technological enhancements to the BlueCard program.

The company repurchased 2,222,201 shares at an aggregate cost of $880 million under the common stock repurchase program. The Board of Directors has authorized our common stock repurchase program since 2003.

On April 16, 2025, our Audit Committee declared a second quarter 2025 dividend to shareholders of $1.71 per share, payable on June 25, 2025.

The company made an equity investment of $2,580 million that resulted in our minority interest ownership of approximately 35% of Augusta Topco Holdings, L.P. (“Mosaic Health”), a joint venture with Clayton, Dubilier & Rice.

The company is making administrative and operational changes to comply with final regulations related to mental health parity.

The company acknowledges the impact of cyber-attacks or other privacy or data security incidents or our failure to comply with any privacy, data or security laws or regulations as a risk factor.

The company states that various laws and provisions in our governing documents may prevent or discourage takeovers and business combinations.

The Inflation Reduction Act of 2022 contains a variety of provisions that have impacted, and continue to impact our business including by extending the American Rescue Plan Act of 2021's enhanced Premium Tax Credits (“PTC”) through 2025.

Changes to our business environment are likely to continue as elected officials at the national and state levels continue to enact significant modifications to existing laws and regulations, including changes to available Individual premium subsidies and insurer taxes and fees.

The company acknowledges competitive pressures and our ability to adapt to changes in the industry and develop and implement strategic growth opportunities as a risk factor.