Company: ELV
Filing Date: 2025-04-22
Form Type: 10-Q
Source: 0001156039-25-000057
Chunk: 58

Company: Elevance Health, Inc.
Filing Date: 2025-04-22
Form: 10-Q
Item: Item 8
Chunk 58
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$(65)(2.9)%Net income attributable to noncontrolling interests(1)(3)2 NMShareholders’ net income$2,183$2,246$(63)(2.8)%Average diluted shares outstanding227.2234.2(7.0)(3.0)%Diluted shareholders’ earnings per share$9.61$9.59$0.02 0.2 %Effective tax rate21.9 %23.5 %(160) bp3Benefit expense ratio286.4 %85.6 %80 bp3Operating expense ratio410.9 %11.6 %(70) bp3Income before income tax expense as a percentage of total revenues5.7 %6.9 %(120) bp3Shareholders’ net income as a percentage of total revenues4.5 %5.3 %(80) bp3

Certain of the following definitions are also applicable to all other results of operations tables in this discussion:

NM    Not meaningful.

1    Includes interest expense and amortization of other intangible assets.

2    Benefit expense ratio represents benefit expense as a percentage of premium revenue. Premiums for the three months ended March 31, 2025 and 2024 were $40,887 and $35,696, respectively. 

3    bp = basis point; one hundred basis points = 1%.

4    Operating expense ratio represents operating expense as a percentage of total operating revenue.

Three Months Ended March 31, 2025 Compared to the Three Months Ended March 31, 2024 

Total operating revenue increased primarily as a result of premium rate increases in our Health Benefits segment in recognition of medical cost trends, recent acquisitions, growth in Medicare Advantage and Individual ACA membership, and growth in CarelonRx product revenue, partially offset by membership attrition in our Medicaid business.

Net investment income increased primarily due to higher income from alternative investments.

Net losses on financial instruments increased due to losses on other invested assets and equity securities. 

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Benefit expense increased primarily due to higher medical cost trends across all lines of business within our Health Benefits segment. 

Our benefit expense ratio increased primarily as a result of Medicaid rates being inadequate to cover medical cost trends, partially offset by higher Medicaid premium increases to cover out of period premium taxes.

Cost of products sold reflects the cost of pharmaceuticals dispensed by CarelonRx for our unaffiliated pharmacy customers. Cost of products sold