Company: ELV
Filing Date: 2025-02-20
Form Type: 10-K
Source: 0001156039-25-000010
Chunk: 123

Company: Elevance Health, Inc.
Filing Date: 2025-02-20
Form: 10-K
Item: Item 7
Chunk 123
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” may be offset as we establish the estimate of “Net incurred medical claims: Current year”, or as we establish liabilities for premium refunds based upon the minimum medical loss ratio (“MLR”), the relative health risk of members, and other contractual or regulatory requirements. Our reserving practice is to consistently recognize the actuarial best estimate of our ultimate liability for our claims. When we recognize a release of the redundancy, we disclose the amount that is not in the ordinary course of business, if material. 

The ratio of current year medical claims paid as a percent of current year net medical claims incurred was 88.5% for 2024, 88.0% for 2023 and 87.3% for 2022. This ratio serves as an indicator of claims processing speed whereby 2024 claims were processed at a similar speed to 2023 and 2022.

We calculate the percentage of prior year redundancies in the current year as a percent of prior year net incurred claims payable less prior year redundancies in the current year in order to demonstrate the development of the prior year reserves. For the year ended December 31, 2024, this metric was 12.3%, largely driven by favorable completion factor development from 2023 as well as favorable trend factor development at the end of 2023. For the year ended December 31, 2023, this metric was 11.4% and was largely driven by favorable trend factor development at the end of 2022 as well as favorable completion factor development from 2022. For the year ended December 31, 2022, this metric was 7.0% and was largely driven by favorable trend factor development at the end of 2021.

We calculate the percentage of prior year redundancies in the current year as a percent of prior year net incurred medical claims to indicate the percentage of redundancy included in the preceding year calculation of current year net incurred medical claims. We believe this calculation supports the reasonableness of our prior year estimate of incurred medical claims. For the year ended December 31, 2024, this metric was 1.4%, which was calculated using the redundancy of $1,731. This metric was 1.4% for 2023 and 0.9% for 2022. 

The following table shows the variance between total net incurred medical claims as reported in Note 12, “Medical Claims Payable,” of the Notes to Consolidated Financial Statements included in Part II,