Elevance shares tumble on third-quarter results and Medicaid costs

People who rely on Medicaid continue to receive medical care at high rates, and it poses an increasing challenge to the major health insurers that cover them.

On Thursday, Elevance Health announced in its third-quarter earnings results that its medical loss ratio — the amount of premium revenue it spent on medical care — was significantly higher than Wall Street analysts expected, sending its stock price into a tailspin.

Business leaders mainly blamed Medicaid for the disappointing financial performance. Redeterminations, the process of removing Medicaid members who are no longer eligible after a pandemic-era pause, are now largely complete in all states. The members who remain crooked become sicker and require more health care. Elevance leaders said they are working with states to update their payment rates, which are typically set with a one- to two-year lag.