Elevance Health Reduces Medicare Footprint, Exits Standalone Part D Plans for Profitability

Elevance Health Inc. (NYSE:ELV) is one of the best inexpensive stocks to buy according to hedge funds. On September 4, Elevance’s CFO, Mark Kaye, announced at the Wells Fargo Healthcare Conference in Boston that the company is reducing its Medicare footprint. The decision is being made to improve the business’s profitability, especially in its Medicare Advantage/MA and standalone Medicare Part D prescription drug plans.

Kaye stated that these moves are intended to help Elevance achieve a firmer financial footing by the end of 2025. Elevance will be exiting certain Medicare Advantage plans where the long-term economics are not sustainable. This will affect ~150K of Elevance’s 2.3 million total individual and group MA members.

Elevance, the fourth-largest MA payer in the US, is also prioritizing plans with narrower networks, such as Health Maintenance Organizations/HMOs, to give members more control over their costs. Additionally, Elevance is fully exiting the standalone Medicare Part D plan market. The company, which is the sixth-biggest standalone Part D provider with 400K members, is making this change to focus more resources on its Medicare Advantage and dual special needs plans (D-SNPs), which are considered to have high-margin potential.

Elevance Health Inc. (NYSE:ELV) is a health benefits company in the US. It has 4 segments: Health Benefits, CarelonRx, Carelon Services, and Corporate & Other.

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Disclosure: None. This article is originally published at Insider Monkey.