Company: ELV
Filing Date: 2025-02-20
Form Type: 10-K
Source: 0001156039-25-000010
Chunk: 24

Company: Elevance Health, Inc.
Filing Date: 2025-02-20
Form: 10-K
Item: Item 1
Chunk 24
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 5.0 Stars to Medicare Advantage plans based on performance in several categories, including quality of care and customer service. The Star Ratings are used by CMS to award quality-based bonus payments to plans that receive a rating of 4.0 or higher. The methodology and measures included in the Star Ratings system can be modified by CMS annually. Our 2024 Star Ratings, which are 

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used for payment year 2025, reflect that 53% of our Medicare Advantage members are enrolled in plans rated at least 4.0 Stars or higher. This was an increase over the original 2024 Star Rating of 34% that were released in October 2023 and were subsequently recalculated by CMS. CMS released our 2025 Star Ratings in October 2024, which will be used to determine our Medicare Advantage bonus payments in 2026. Our 2025 Star Ratings reflect that 38% of our Medicare Advantage members are enrolled in plans rated at least 4.0 Stars or higher. We expect this will result in a reduction to our 2026 operating revenue of approximately $183 million, net of offsets from contracting provisions. Further, we expect to mitigate the financial impact to our 2026 operating gain and net income per share through various strategies such as contract diversification, operating expense efficiencies, capital deployment alternatives and network enhancements.

•The implementation of a Medicare Advantage payment formula, which prevents reimbursement rates from increasing as much as otherwise would be expected. 

 We continue to participate in the Public Exchange in nearly all of our Anthem Blue Cross and Anthem Blue Cross and Blue Shield service areas. We anticipate growth in our Public Exchange membership as former Medicaid members, no longer eligible for Medicaid coverage, continue to seek alternative coverage options. Additionally, we are entering select service areas in Florida, Maryland, and Texas in 2025, using our Simply Healthcare and Wellpoint brands, and we are actively evaluating expansion opportunities in additional marketplaces beyond 2025. Any variation from our expectations regarding acuity, enrollment levels, adverse selection, or other assumptions utilized in setting premium rates could have a material adverse effect on our results of operations, financial position, and cash flows, and may require further adjustments to our rates and participation going forward. Changes to our business environment are likely to continue as elected officials at the national and state levels continue to enact significant modifications to existing laws and regulations, including changes to available subsidies, taxes and fees. 

Pharmacy Services and Drug Benefit Regulation

Pharmacy services, including pharmacy benefit managers, are