Elevance reports 17% gain in profits, hitting $1.2 billion in Q3

Elevance Health reported strong financial performance during the third quarter of this year. 

The company posted year-over-year double-digit increases in both revenue and profit.

The insurer logged $1.2 billion in profit in Q3 2025, a 17% year-over-year increase, and about $1 billion in revenue for Q3. 

Revenues increased 12.4%, hitting $50.7 billion in the quarter, up from the $45.1 billion posted in Q3 2024.

The performance brings profit for the year up to $5.1 billion through the first nine months. That's an 8% dip from the first three quarters of 2024.

Revenues for 2025 now sit at $149.4 billion, a 13% year-over-year increase.

WHAT'S THE IMPACT 

Elevance Health traded higher after posting better-than-expected Q3 financials, according to Seeking Alpha. Not only Elevance, but its health insurance peers also traded higher, the report said.

Elevance is the first major health insurer to report financials during the current earnings season, with UnitedHealth Group, CVS Health and Cigna scheduled to release earnings next week.

Elevance’s benefit expense ratio, a key industry benchmark that indicates the share of premiums spent on healthcare costs, stood at 91.3% for the quarter compared to 89.5% in the prior year. This reflects an elevated cost trend in the company’s Medicare business.

Medicare Advantage membership growth helped expand revenue despite ongoing losses in Medicaid membership due to eligibility reviews.

The operating expense ratio was 10.5%, an improvement of 130 basis points. The adjusted operating expense ratio was 10.4%, an increase of 100 basis points, largely driven by targeted investments to scale Carelon's capabilities. 

Carelon comprises CarelonRx and Carelon Services. Operating revenue for Carelon was $18.3 billion in the third quarter of 2025, an increase of $4.5 billion, or 33%, compared to the prior year quarter. 

This, said Elevance, was driven by recent acquisitions in home health and pharmacy services, growth in CarelonRx product revenue and the scaling of Carelon Services risk-based solutions.

Operating revenue for the health benefits segment was $42.2 billion in the third quarter of 2025, an increase of $4 billion, or 10%, compared to the prior year quarter. This, said Elevance, was driven primarily by higher premium yields, recently closed acquisitions and growth in Medicare Advantage membership.

THE LARGER TREND 

In August, Elevance Health’s lawsuit against the Centers for Medicare and Medicaid Services over its Medicare Advantage star ratings scores was shot down by a judge in the Northern District of Texas.

The insurer sued CMS in November and asked the court to order the Department of Health and Human Services to recalculate its 3.75 score for a specific contract to a 4-star rating. At the time, Elevance said CMS’ calculations were "fraught with statistical variance, which can cause improper impacts on a Medicare Advantage Organization’s (MAO's) overall star rating."

CMS has cost Elevance $375 million, according to the original complaint. Star ratings represent billions of dollars in quality bonus payments, much of which are used to increase member benefits, the insurer said.

In the decision, the court said CMS did not act arbitrarily, and that the court lacks the ability to question the agency’s data collection and scoring methodology, saying it’s “not one which a federal court is well suited to second guess.”