Company: ELV
Filing Date: 2025-04-22
Form Type: 10-Q
Source: 0001156039-25-000057
Chunk: 62

Company: Elevance Health, Inc.
Filing Date: 2025-04-22
Form: 10-Q
Item: Item 8
Chunk 62
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 31, 2025, our critical accounting policies and estimates related to medical claims payable have not changed from those described in our 2024 Annual Report on Form 10-K. For a reconciliation of the beginning and ending balance for medical claims payable for the three months ended March 31, 2025 and 2024, see Note 9, “Medical Claims Payable,” of the Notes to Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

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The following table provides a summary of the two key assumptions having the most significant impact on our incurred but not paid liability estimates for the three months ended March 31, 2025 and 2024, which are the trend and completion factors. These two key assumptions can be influenced by utilization levels, unit costs, mix of business, benefit plan designs, provider reimbursement levels, processing system conversions and changes, claim inventory levels, claim processing patterns, claim submission patterns and operational changes resulting from business combinations.

Favorable Developments by Changes in Key AssumptionsThree Months Ended  March 3120252024Assumed trend factors$164 $571 Assumed completion factors861 634 Total$1,025 $1,205 

The favorable development recognized in the three months ended March 31, 2025 resulted from favorable development in the completion factors resulting from the latter part of 2024 developing faster than expected as well as trend factors in late 2024 developing more favorably than originally expected.

The ratio of current year medical claims paid as a percent of current year net medical claims incurred was 66.2% and 63.8% for the three months ended March 31, 2025 and 2024, respectively. This ratio serves as an indicator of claims processing speed whereby speed for claims payments was slightly faster during the three months ended March 31, 2025 as compared to the three months ended March 31, 2024.

We calculate the percentage of prior year redundancies in the current period as a percent of prior year net medical claims payable less prior year redundancies in the current period in order to demonstrate the development of prior year reserves. For the three months ended March 31, 2025, this metric was 7.1%, mainly driven by both favorable completion factor development from 2024 and favorable trend factor development at the end of 2024. For the three months ended March 31