Elevance Health, the giant health insurance conglomerate that operates Blue Cross plans in 14 states under the Anthem brand, reported second-quarter profits yesterday that blew past Wall Street’s expectations. The company reported adjusted earnings per share of $7.45, well above Wall Street financial analysts’ consensus estimate of $6.21. Revenue growth also exceeded expectations and the company raised its full-year 2026 earnings guidance to at least $27 a share.
Despite all that, investors responded by dumping the stock. Shares fell more than 10% in premarket trading, dragging down rival insurers Molina, UnitedHealth, Centene, and Cigna with it. By the end of the day, Elevance’s share price was down to $389.86, almost $37 less than when the market closed on Tuesday. (UnitedHealth, the biggest of the bunch by far, reported its own quarterly results this morning. I’ll write about that after I’ve had a chance to analyze them.)
So what spooked shareholders about a quarter that beat their expectations on every headline number? The answer says a lot about how thin the “good news” in these earnings reports really is — and how Big Insurance is using accounting maneuvers to paper over a business that’s fundamentally weaker than it looks.
One of those weaknesses – at least from investors’ point of view – is the company’s continuing inability to keep many of the 45 million people enrolled in its health plans from getting the care they need. The company’s medical loss ratio – the share of premiums that actually goes to pay medical claims – was significantly higher during the past quarter compared to the same quarter last year.
The company also reported that far fewer people are enrolled in its health plans now than this time last year. In other words, Anthem health plans are shrinking as more and more of their enrollees join the ranks of the uninsured (because they can no longer afford the premiums Anthem charges) and as its Medicare Advantage and Medicaid enrollments plummet. That shrinkage was largely the result of the company taking deliberate actions to dump many enrollees needing expensive care but also from Congressional and Trump administration actions that are pushing millions of Americans out of their ACA marketplace and Medicaid plans.
As a result of Wall Street’s negative reaction yesterday, Elevance’s employer customers and its health plan enrollees – and the health care providers that treat them – can expect more pain in the coming months as the company’s executives do all they can to avoid another bad day on Wall Street when it announces third quarter earnings three months from now.
The Beat Had Nothing to Do with Selling and Managing Health Insurance
Buried in Elevance’s earnings release was this line: Results were “supported by favorable benefit expense performance and an approximately $0.80 per share net below-the-line benefit.”
On the company’s call with financial analysts yesterday morning, Chief Financial Officer Mark Kaye tried to explain what that meant in plainer terms: The money came almost entirely from “valuation adjustments within net investment income” — gains on the company’s investment portfolio, not from the business of insuring people.
One of the many ways big insurance conglomerates make money is by holding on to premium dollars as long as possible and investing that money in various ways.
Elevance Had to Give $342 Million Back to Taxpayers
The payment to CMS is the latest sign of mounting scrutiny over Medicare Advantage billing practices.
Elevance’s “days in claims payable” — a measure of how long the company holds onto money before paying doctors and hospitals — rose to 45.4 days, up 2.9 days from a year earlier. An analyst on the call asked directly whether this reflected any change in how conservatively the company is reserving for claims. Kaye replied by saying that the company’s “reserving posture” remains “consistent and prudent.” What he didn’t say out loud was that by holding claims payable for a few additional days the company had more cash on hand, for longer, before paying providers and patients — a lever that, whether by design or not, can make quarterly cash flow and earnings look stronger than the underlying claims activity alone would suggest.
The numbers bear this out. Elevance’s investment income jumped a whopping 44.9% year-over-year, from $486 million to $704 million. Meanwhile, operating gain — the profit Elevance actually made running its health plans — fell almost 28%, to $1.8 billion from $2.5 billion a year ago. In the company’s core Health Benefits segment, operating gain collapsed 42.6%.
To find those profit numbers, you had to read a lot of words in the news release and get past CEO Gail Boudreaux’s hype and jargon in the second paragraph: “Our second quarter results exceeded our outlook, supported by disciplined execution and improved operating performance across our diversified portfolio. We are raising our adjusted EPS guidance to at least $27 and accelerating targeted investments in the capabilities that matter most: medical cost management, member experience, provider connectivity, operating efficiency, and Carelon’s value-based solutions.” (Carelon is the company’s non-health insurance operations, including its pharmacy benefit manager, CarelonRX.)
Investors didn’t buy Boudreaux’s spin. Strip away that investment windfall and you’ll see that the company’s insurance business had a rough quarter. Elevance’s medical loss ratio (MLR) rose to 89.7%, up eight-tenths of a percentage point from a year ago, driven by rising costs in the company’s government-funded plans (Medicare Advantage and Medicaid). As a reminder, investors hate it when insurers spend more money paying claims than expected.
Who's Really Gaming the No Surprises Act?
Health insurers have a new talking point – based on a new “study” by the giant health insurance conglomerate Elevance Health – and it goes something like this: Doctors are exploiting the No Surprises Act’s (NSA) arbitration process to extract outrageous payments, and something must be done before the whole system collapses under the weight of runaway awards.
That one-time investment gain was the subject of some back and forth between CFO Kaye and the financial analysts. What we learned from that exchange is that rather than let that one-time investment gain simply flow to the bottom line, Elevance will plow the entire $0.80 per share into “one-time investments in the second half of the year” — spending on “medical cost management (things like prior authorization, which patients and their doctors despise), member engagement, provider connectivity, and Carelon’s integrated capabilities.” The company did not elaborate on exactly what the company will do in those categories.
Jefferies analyst Dave Windley pressed Kaye directly on what that meant in practice. Would the $0.80 simply come back to earnings next year, or would the spending become part of the company’s ongoing cost base? Kaye’s answer was unambiguous — the money is “one-time” and “not part of 2027.” The company is setting its 2027 growth target off a “baseline” of $26 a share, deliberately excluding the windfall.
In plain English: Elevance had an impressive and unrepeatable gain on its investment portfolio this quarter. Rather than report the windfall as extra profit, the company is spending it now — on capabilities it says will make future earnings look stronger and more consistent. That’s a choice that clearly is designed to accomplish a cleaner-looking growth story heading into 2027, built partly on money that has nothing to do with how the company manages health benefits for millions of American families this year.
Revenue Is Growing but Membership Is Shrinking — Especially in Government Programs
The other numbers Wall Street didn’t like involved enrollment. Despite total revenues increasing from $98.7 billion in the first half of 2025 to $100.7 billion in the first half of this year, Elevance’s total medical membership fell 1.5%, to 44.9 million from 45.6 million a year ago. The decline was concentrated in the very programs meant to serve the most vulnerable people:
Medicare Advantage membership fell 15.9% year-over-year, from 2.3 million to 1.9 million, the result of Elevance deliberately exiting unprofitable markets.
ACA marketplace enrollment fell 7.5% since the first quarter of this year, from 1.35 million to 1.32 million members.
Medicaid membership fell 4.3% year-over-year, from 8.73 million to 8.36 million.
On yesterday’s call with Wall Street analysts, executives said that over the next 12 to 18 months, Elevance will exit a number of Medicaid markets in states “where we do not see a path to sustainable performance” — corporate language for markets where a state’s payment rates don’t deliver the returns the company wants. Elevance recently agreed to exit the District of Columbia’s Medicaid program entirely. The company, which manages several states’ Medicaid programs, didn’t say which states would be next.
Anthem’s New 10% Penalty Targets Hospitals and Doctors
Elevance’s Anthem Blue Cross plans are joining Big Insurance’s latest profit play — cutting payments to hospitals and providers under the pretense of reducing patients’ out-of-pocket costs.
Meanwhile, the company’s Medicaid membership will soon face new federal work-requirement rules taking effect under the One Big Beautiful Bill Act. Company executives called the impact “manageable,” but the requirements are widely expected to push eligible people off the Medicaid rolls through paperwork and verification burdens rather than changes in whether they actually qualify.
To sum up:
Elevance’s core health plan business got measurably less profitable.
The earnings beat depended heavily on investment portfolio gains that have nothing to do with health care.
The company is using that one-time windfall to smooth over next year’s numbers rather than report it as profit now.
Hundreds of thousands of people — disproportionately those on Medicaid, Medicare Advantage, and ACA marketplace plans — lost their Anthem coverage over the past year, and thousands more will lose their coverage as the company exits an untold number of communities in the coming month.
We’ll keep an eye on the actions Elevance and the rest of Big Insurance will be implementing over the next three months to get back into their shareholders’ good graces – actions that almost certainly will mean more enrollment shrinkage and more creative ways to keep the companies’ remaining enrollees from getting the care their doctors say they need.
Today in HEALTH CARE un-covered, Wendell Potter writes:
"One of those weaknesses – at least from investors’ point of view – is the company’s continuing inability to keep many of the 45 million people enrolled in its health plans from getting the care they need. The company’s medical loss ratio – the share of premiums that actually goes to pay medical claims – was significantly higher during the past quarter compared to the same quarter last year.”
The shareholder model is the very reason patients cannot access the medical care they need. Denial of Care Harm-for-Profit is the business model.
Elevance’s shareholders are either will-fully or naively ignorant regarding the role they each play in the company’s continuing choice to keep our premium-paying fellow American citizens who are enrolled in its investment bank float scam from accessing the medical care they need.
Elevance’s crime rap sheet is long.
On June 1st, Arizona Attorney General Kris Mayes filed a major lawsuit accusing the “healthcare pricing” grifter MultiPlan and eight of the nation's largest commercial health insurance investment banks of working together to artificially slash what doctors and hospitals get paid for out-of-network care. That is not a victimless crime.
Attorney General Mayes announced the legal action against MultiPlan and the largest commercial health insurance investment banks including Aetna, Cigna, UnitedHealthcare, Humana, Elevance, Molina, Centene, and Health Care Service Corporation during a press conference standing side-by-side with physicians who articulated the harm the long-running crime imposed on their patients and practices.
The complaint filed in Maricopa County Superior Court alleges the companies spent years building and operating a system that used a shared algorithm to determine reimbursement rates. This is a collusion and price-fixing crime architected to obstruct and impede medical care.
The ethics and morals bar is now so low for commercial health insurance investment bank executives and shareholders, they purport to believe they are investing in providing medical care, when in fact, they are investing in securities, real estate, bonds, private equity and other investments.
This premise—that shareholders are “punishing” a company by dumping—is next level Pollyannaism. We must change this enabling dialogue. We must stop perpetuating and rationalizing Denial of Care Harm-for-Profit as a business model. We must expect better from one another.
It is time to disempower commercial health insurance investment banks (and their greedy shareholders) by honestly speaking out about how they operate and how much preventable harm and death they cause.
In fact, it is time to “punish” shareholders who have generated personal wealth from the Denial of Care Harm-for-Profit business model. It is time to pass Senate Bill 1506/HR 3069—Single Payer Universal Healthcare / National Improved Medicare for All.
Since the Potter post above does mention both the ACA on-exchange cuts (that already happened) and the ACA expanded Medicaid cuts that are mostly ahead of us, after the midterms at the start of next year, I guess I will put up my latest summary of the coverage-dropping numbers, as well as the very substantial propaganda effort to cover up the damage.
Note this is similar to a post yesterday, which covered the same information, but re-ordered.
I will run through a pair of Washington Post editorials from Jeff. One from just two days ago 7/14/26, the other 7/10/26. They are both vacuous but effective as propaganda in the way vacuous things can be effective as propaganda.
There are other new things as well. The "Let Them Eat Pancakes" initiative. Other stuff. Let me lay them out.
1) THE 7/14/26 WASHINGTON POST EDITORIAL
entitled
“Medicaid Fraud Control Units aren’t doing enough to control fraud Indictments and convictions are down, despite a surge in funding.”
and is here:
https://www.washingtonpost.com/opinions/2026/07/14/medicaid-fraud-control-units-arent-doing-enough-control-fraud/ .
The editorial continues in the logically vacuous style of the prior one, apparently attempting to have people just see “ACA—FRAUD—BAD—STUPID DEMOCRATS WHO LET EVERYONE CHEAT”, which a certain class of minds take as equivalent to airtight reasoning.
So, that approach seems to be most evident at the very end, with, in the last paragraph:
“Targeting waste and abuse is necessary but not sufficient to save Medicaid, whose costs have ballooned in unsustainable ways because of the Affordable Care Act.”
This may need an explainer—as to why Medicaid costs have gone up—”ballooned in unsustainable ways” is, of course, wording chosen for the benefit of those who get mixed up between words and actual content):
Medicaid costs have gone up quite a bit with the Affordable Care Act, because a new part of Medicaid was added, expanded Medicaid.
Expanded Medicaid is part of the ACA, and covers about 20 million people now. It is the way people without other health coverage, such as from an employer, who are below 138% of the Federal Poverty Level (FPL), get coverage. (There is no asset test—people below 138% of FPL get it regardless of assets—done to make the system airtight and leave no one out.) So, they get expanded Medicaid. (Without the expanded Medicaid, they would not have coverage unless they dropped down to being dirt poor in BOTH income and assets to qualify for traditional, pre-ACA Medicaid, which still exists.) The expanded Medicaid people cannot get subsidized on-exchange coverage, as the ACA structure prohibits them from doing that. This provision of the ACA was done as a cost-saving measure, to keep the lower-income group getting services paid for by the government at the lower Medicaid reimbursement rates.)
Beyond the “fraud” and “ballooned in unsustainable ways” wording to manipulate the less-analytically-discerning, which is the apparent purpose of the editorial,
NOTE THESE:
BIG ONE, in the quoted text: “but not sufficient”!!!
More fully: “Targeting waste and abuse is necessary but not sufficient”.
Do you see that? Thinking caps, the logically capable. Those cuts from OBBB. (Not in effect yet. They go into effect right after the midterms. Coming. Sure to bring chaos and uninsurance to many.)
Begging the question here on “not sufficient” (in the old fashioned logic meaning—not the newer “raises the question” sense.)
Also:
We don’t see much in dollar amounts of the fraud. Keeping dollar amounts out of perspective is a repeated technique of these guys. A millions, a billion, a trillion—what’s the difference—they all rhyme, after all?
So, note total federal spending on health care is about $1.9 trillion a year. That would be 1,900 billion. (From https://www.kff.org/medicaid/what-does-the-federal-government-spend-on-health-care/ )
Meanwhile, I don’t see any dollar amounts in this thing: https://thefga.org/research/americas-medicaid-fraud-control-units-are-failing-their-mission/ that the Wa Po editorial refrenced from this “Foundation for Government Accountability” think tank that they reference.
They also seem to have left off a comparator, that tax evasion in the U.S. is about $700 billion a year https://siepr.stanford.edu/news/mapping-maze-where-irs-could-find-billions-unpaid-taxes
and I don’t have a dollar number on tax loopholes, which would be separate. And I wonder how much the administration is doing about that. (It would be Scott Bessant, not Dr. Oz.)
2) The 7/10/26 Washington Post Editorial, which I find so problematic I have a full POST on it. It has a $5.898 number from the "Paragon Health Institute" in it which I am proud to say I was able to trace the origin of quickly owing to my work on a graph (which I'm pretty sure is wildly off or intentionally deceptive) from same Paragon entity, used to justify the non-extension of the ACA expanded subsidies 8 months ago.
My post on that 7/10/26 editorial, where I found a problem or two, and a vacuousness, here
https://normspier828307.substack.com/p/washington-post-editorial-71026-i , and, from there,
you can get back to the Paragon graph of 8 months ago-- which was on the exact same data--if you are interested in that.)
3) The “phantoms” in both CMS and Paragon Health Institute reports taken to questionably indicate massive "fraud"; they had to switch to “ghosts” because they may have figured too many of those targeted didn’t know what the word “phantom” means, explored here:
https://substack.com/@normspier828307/note/c-288953391
4) Then you’ve got Dr. Oz, with his four wild deceptions, on the National Mall, as part of the new “Let Them Eat Pancakes” campaign:
https://substack.com/@normspier828307/note/c-289373653
5) Then you’ve got the huge and increasing coverage number drops are supposed to all be from stopping the fraud. This is a place with the "phantoms" term. (Baloney:
https://normspier828307.substack.com/p/the-administrations-claim-in-the
based on the same CMS report as the Jonathan Cohn post as the one that included the Trump Death Panels:
https://www.thebulwark.com/p/donald-trump-is-bringing-back-death-panels (note this one behind a Bulwark Substack paywall)
6) Then you’ve got the earlier leak from CMS that the false due-to-fraud explanation was coming
https://normspier828307.substack.com/p/loss-of-aca-coverage-after-republicans
kind of similar in content to the Jonathan Cohn Post on phantoms:
https://www.thebulwark.com/p/obamacare-phantom-menace-aca-fraud-trump-oz-insurance-coverage (again, behind a Bulwark Substack Paywall)