Revised Earnings Guidance: Elevance Health updated its full-year 2025 adjusted EPS guidance to approximately $30, down from previous expectations, largely due to elevated medical cost trends in its ACA business and slower Medicaid rate alignment. This revision indicates the company is not expecting a near-term recovery and reflects pressures similar to those experienced across the sector.

Membership Changes: The company reported a decline in membership, with a total of 45.6 million medical members, down approximately 200,000 sequentially, primarily driven by a reduction in Medicaid membership and lower ACA effectuation rates. Despite these challenges, membership stability is forecasted for the remainder of 2025.

Cost Trends and Utilization Pressure: There has been a significant market-wide increase in morbidity, with several cost categories showing heightened utilization, especially in emergency room visits and behavioral health services. Elevated medical cost trends in both the ACA and Medicaid segments are expected to persist into the second half of the year, leading to margin recovery challenges.