Company: ELV
Filing Date: 2025-07-17
Form Type: 10-Q
Source: 0001156039-25-000114
Chunk: 68

Company: Elevance Health, Inc.
Filing Date: 2025-07-17
Form: 10-Q
Item: Item 8
Chunk 68
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 levels, claim processing patterns, claim submission patterns and operational changes resulting from business combinations.

Favorable Developments by Changes in Key AssumptionsSix Months Ended  June 3020252024Assumed trend factors$1,013 $621 Assumed completion factors52 852 Total$1,065 $1,473 

The favorable development recognized in the six months ended June 30, 2025 resulted from trend factors in late 2024 developing more favorably than originally expected as well as a smaller contribution from faster than expected development of completion factors from the latter part of 2024. The favorable development recognized in the six months ended June 30, 2024 resulted from favorable development in the completion factors resulting from the latter part of 2023 developing faster than expected as well as trend factors in late 2023 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 80.3% and 79.8% for the six months ended June 30, 2025 and 2024, respectively. This ratio serves as an indicator of claims processing speed whereby speed for claims payments was slightly faster during the six months ended June 30, 2025 as compared to the six months ended June 30, 2024.

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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 six months ended June 30, 2025, this metric was 7.3%, which was mainly driven by favorable trend factor development at the end of 2024, with favorable completion factor development from 2024 also contributing. For the six months ended June 30, 2024, this metric was 10.2%, driven by both favorable completion factor development from 2023 and favorable trend factor development at the end of 2023.

We calculate the percentage of prior year redundancies in the current period 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 and the consistency in our methodology. For the six months ended June 30, 2025, this metric was 0.9%, which