In this photo, Elevance President and CEO Health Gail Boudreaux testifies at a House Committee on Energy and Commerce Subcommittee on Health hearing on lowering health care costs at the Capitol, Thursday, Jan. 22, 2026, in Washington. (AP Photo/Allison Robbert)
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Elevance Health reported second quarter net income of $1.45 billion as medical costs fell in some health plans, triggering an improved outlook for the rest of the year.
The health insurer raised its full year earnings outlook to “at least $20.10” per share compared to an earlier forecast of “at least $19.85” per share. The decision to issue a new outlook reflected “strong second quarter operating results,” the company said Wednesday in its report.
Elevance, which is the nation’s second-largest health insurer behind UnitedHealth Group’s UnitedHealthcare, is best known for its operation of Anthem brand Blue Cross and Blue Shield plans in 14 states. In addition, Elevance manages Medicaid via contracts with multiple states and also sells individual coverage under the Affordable Care Act, also known as Obamacare. The company also has a growing Carelon healthcare services business.
Elevance reported a net income of $1.46 billion, or $6.71 per share, which was down 16.6% compared to $1.74 billion, or $7.72 per share. The company said the results “results were supported by favorable benefit expense performance and an approximately $0.80 per share net below-the-line benefit.”
Like many of its rival health insurers, the company has been battling rising medical expenses from customers in its health plans. Wednesday’s results reflected costs that are still up with the company’s benefit expense ratio, which is the percentage of premium revenue that goes toward medical costs, eclipsing 89%.
“The benefit expense ratio of 89.7 percent increased 80 basis points year over year, driven by expected elevated medical cost trend in our Government businesses, partially offset by improved performance in Individual ACA compared to the prior year,” Elevance said in its earnings report. The company’s reference to “individual ACA” is the individual health insurance plans under the Affordable Care Act also known as Obamacare.
Health insurers historically want that benefit expense ratio in the mid to low 80s but that’s been largely unachievable for most plans for the last year or so in part because Americans, particularly older adults in Medicare Advantage plans, have a pent up demand for healthcare following the Covid-19 pandemic when many patients delayed treatment. Costs have continued to surge into this year, insurers have been reporting.
But Elevance chief executive Gail K. Boudreaux said the company’s “second quarter results exceeded” executives outlook and the decision to raise guidance was “supported by disciplined execution and improved operating performance across our diversified portfolio.”
“We are raising our 2026 adjusted (earnings per share) guidance to at least $27.00 and accelerating targeted investments in the capabilities that matter most: medical cost management, member experience, provider connectivity, operating efficiency, and Carelon’s value-based solutions,” Boudreaux said in a statement accompanying the Elevance earnings report. “These actions will strengthen how we operate, improve consistency over time, and reinforce our confidence in returning to at least 12% adjusted EPS growth in 2027 off our 2026 earnings baseline.”
Total revenue was up 1.4% to $50.47 billion in the quarter. “Operating revenue was $49.8 billion in the second quarter of 2026, an increase of $0.4 billion compared to the prior year quarter,” Elevance said in its report. “This was driven by higher premium yields in our health benefits segment and growth in CarelonRx product revenue, partially offset by anticipated declines in our Medicare Advantage, Medicaid, and Employer Group risk membership.”
Elevance ended the quarter with 44.9 million health plan members, which was down 1.5% compared to 45.6 million in the year-ago quarter.