On January 24, 2024, Elevance Health Inc (ELV, Financial) released its 8-K filing, detailing the financial results for the fourth quarter and the full year of 2023. The company, a leading health insurer in the U.S., has reported a year of strong performance, with a significant increase in operating revenue and a resilient operating gain despite strategic investments for future growth.
Financial Performance and Strategic Investments
Elevance Health Inc's operating revenue saw a substantial increase to $42.5 billion in Q4 2023, marking a 7% rise compared to Q4 2022. The full-year operating revenue reached $170.2 billion, a 9% increase from the previous year. This growth was attributed to higher premium revenue in the Health Benefits segment and growth in pharmacy product revenue in CarelonRx. The operating gain remained stable at $1.3 billion for Q4 and increased slightly to $8.5 billion for the full year, compared to $8.3 billion in 2022.
The company's operating margin for the year stood at 5.0%, a slight decrease from 5.3% in the previous year. The benefit expense ratio improved by 60 basis points year-over-year to 87.0%, reflecting premium rate adjustments to cover medical cost trends. However, the operating expense ratio increased by 40 basis points year-over-year to 11.8%, due to business optimization charges recorded in 2023.
Membership Dynamics and Shareholder Returns
Medical membership experienced a decrease of 570 thousand, or 1%, year-over-year, mainly due to Medicaid attrition associated with eligibility redeterminations and declines in the Employer Group risk-based business. Nonetheless, this was partially offset by growth in BlueCard, Affordable Care Act health plans, and Medicare Advantage.
In terms of shareholder returns, Elevance Health Inc repurchased 5.8 million shares of its common stock for $2.7 billion throughout 2023 and paid a quarterly dividend of $1.48 per share in the fourth quarter, amounting to a distribution of $346 million. The company ended the year with approximately $4.2 billion of Board-approved share repurchase authorization remaining.
Looking Ahead
President and CEO Gail K. Boudreaux expressed confidence in the company's outlook for 2024, citing a focus on customer experience, affordability, and continued investments in growth and innovation. The balance and resilience of the business, along with the execution of its enterprise strategy, are expected to support sustained growth over the long term.
“We are pleased to have delivered another year of strong performance in 2023, enabled by our relentless focus on customer experience and affordability, and continued investments in growth and innovation. The balance and resilience of our business coupled with the focused execution of our enterprise strategy supports our confidence in our outlook for 2024, as we continue to optimize the foundation, and scale our flywheel for sustained growth of the enterprise over the long term.” - Gail K. Boudreaux, President and CEO
Elevance Health Inc remains committed to its role as a lifetime, trusted health partner, supporting over 115 million people through its comprehensive portfolio of medical, digital, pharmacy, behavioral, clinical, and complex care solutions. With a strong financial foundation and strategic focus, ELV is poised for continued success in the dynamic healthcare landscape.
Explore the complete 8-K earnings release (here) from Elevance Health Inc for further details.