Elevance stock tumbles on 3Q results, Medicaid costs

People who rely on Medicaid continue to get medical care at high rates, and it’s presenting a growing challenge for the major health insurers who cover them. 

On Thursday, Elevance Health disclosed in its third quarter earnings release that its medical loss ratio — the amount of premium revenue it spent on medical care — was markedly higher than Wall Street analysts expected, sending its stock price into a tailspin.

Company leaders primarily blamed Medicaid for the underwhelming financial performance. Redeterminations, the process of culling members from Medicaid who are no longer eligible following a pandemic-era pause, are now mostly complete across all states. The members who remain skew sicker and require more health care services. Elevance leaders said they’re working with states to update their payment rates, which tend to be set at a one- to two-year lag.