−Removed: At Elevance Health, our purpose – to improve the health of humanity – is central to who we are.
−Removed: It inspires all we do and is the driving force behind our unique approach to health.
−Removed: We know to meaningfully improve health we must take a broader view.
−Removed: That is why our foundational approach looks at whole health and its most critical drivers:
−Removed: social, behavioral and physical.
−Removed: We believe in working together to achieve our mission of improving lives and communities, simplifying healthcare and expecting more.
−Removed: We strive to deliver on our mission by maximizing the power of partnerships, innovating to fuel growth and health equity, and having a high-performance culture.
−Removed: Our strategy is to become a lifetime, trusted health partner through the following four core focus areas:
−Removed: • Whole Health – Partner to address physical, behavioral, social, and pharmacy needs to improve health, affordability, quality, equity, and access for individuals and communities.
−Removed: • Exceptional Experiences – Put the people we serve at the center of all that we do, to exceed expectations and optimize health outcomes.
+Added: Elevance Health and its subsidiaries, referred to throughout this document as “we,” “us,” “our,” the “Company” or “Elevance Health,” is a leading health company bringing together the concepts of elevate and advance, in order to exemplify and follow our bold purpose of improving the health of humanity.
+Added: We serve people across their entire health journey to better address their full range of needs with an integrated whole-health approach.
+Added: Through our broad view, we aim to meaningfully improve the health of the people and communities we serve.
+Added: We strive to deliver on our mission by maximizing the power of partnerships, innovating to fuel growth and health equity, and maintaining a high-performance culture.
+Added: Our strategy is to be a lifetime trusted health partner through the following four core focus areas:
+Added: • Whole Health – Partner to address physical, behavioral and social needs to improve health, affordability, quality, equity, and access for individuals and communities.
+Added: • Exceptional Experiences – Put the consumers we serve at the center of all that we do, personalizing engagement to meet consumers where they are and optimize health outcomes across individuals and populations.
• Care Provider Enablement – Be the easiest payer to work with by supporting care provider partners with data, insights, and tools they need to deliver exceptional care for our consumers.
−Removed: • Digital Platform – Use digital technologies to improve efficiency and experiences, convert data into insights, and create a platform that connects stakeholders from across the health ecosystem.
+Added: • Digital Platform – Use digital technologies such as AI to transform the way we operate our business and interact with consumers by driving improvements in efficiency and experiences and converting data into actionable insights.
With an unyielding commitment to meeting the needs of our diverse customers, we are guided by the following values:
−Removed: • Leadership – Redefine what is possible
−Removed: • Community – Committed, connected, invested
−Removed: • Integrity – Do the right thing, with a spirit of excellence
−Removed: • Agility – Delivery today, transform tomorrow
−Removed: • Diversity – Open our hearts and minds
+Added: • Community – We put people first
+Added: • Diversity – We value our differences
+Added: • Integrity – We build trust
+Added: • Agility – We embrace change
+Added: • Leadership – We lead by example
We are one of the largest health insurers in the United States in terms of medical membership, serving approximately 47 million medical members through our affiliated health plans as of December 31, 2023.
−Removed: We offer a broad spectrum of network-based managed care risk-based plans to Individual, Group, Medicaid and Medicare markets.
−Removed: In addition, we provide a broad array of managed care services to fee-based customers, including claims processing, stop loss insurance, provider network access, medical management, care management and wellness programs, actuarial services and other administrative services.
+Added: We offer a broad spectrum of network-based managed care risk-based plans to Individual, Employer Group, Medicaid and Medicare markets.
+Added: In addition, we provide a broad array of managed care services to fee-based customers, including claims processing, stop loss insurance, provider network access, medical management, care management, wellness programs, actuarial services and other administrative services.
We provide services to the federal government in connection with our Federal Health Products & Services business, which administers the Federal Employees Health Benefits (“FEHB”) Program.
−Removed: We provide an array of specialty services both to customers of our subsidiary health plans and also unaffiliated health plans, including pharmacy benefit management (“PBM”) services and dental, vision, life, disability and supplemental health insurance benefits, as well as integrated health services.
+Added: We provide an array of specialty services both to customers of our subsidiary health plans and also to unaffiliated health plans, including pharmacy services, dental, vision, life, disability and supplemental health insurance benefits, as well as integrated health services.
We are an independent licensee of the Blue Cross and Blue Shield Association (“BCBSA”), an association of independent health benefit plans.
We serve our members as the Blue Cross licensee for California and as the Blue Cross and Blue Shield (“BCBS”) licensee for Colorado, Connecticut, Georgia, Indiana, Kentucky, Maine, Missouri (excluding 30 counties in the Kansas City area), Nevada, New Hampshire, New York (in the New York City metropolitan area and upstate New York), Ohio, Virginia (excluding the Northern Virginia suburbs of Washington, D.C.) and Wisconsin.
−Removed: In a majority of these service areas, we do business as Anthem Blue Cross, Anthem Blue Cross and Blue Shield, and Empire Blue Cross Blue Shield or Empire Blue Cross.
−Removed: In addition, we conduct business through arrangements with other BCBS licensees as well as other strategic partners.
−Removed: Through our subsidiaries, we also serve customers in numerous states as AIM Specialty Health, Amerigroup, Aspire Health, Beacon, CareMore, Freedom Health, HealthLink, HealthSun, MMM, Optimum Healthcare, Simply Healthcare, UniCare and/or Wellpoint.
−Removed: We offer PBM services through our CarelonRx, Inc.
−Removed: (“CarelonRx”) subsidiary, which was named IngenioRx, Inc.
−Removed: prior to January 1, 2023.
+Added: In a majority of these service areas, we do business as Anthem Blue Cross and Anthem Blue Cross and Blue Shield.
+Added: We also conduct business through arrangements with other BCBS licensees, as well as other strategic partners.
+Added: In addition, we serve members in numerous states as Amerigroup, Freedom Health, HealthSun, MMM, Optimum Healthcare, Simply Healthcare and/or Wellpoint.
We are licensed to conduct insurance operations in all 50 states, the District of Columbia and Puerto Rico through our subsidiaries.
−Removed: As part of our name change to Elevance Health, in June 2022, we announced that over the next several years we will organize our brand portfolio into the following core go-to-market brands:
+Added: Through various subsidiaries, we also offer pharmacy services through our CarelonRx business, and other healthcare related services as Carelon Insights, Carelon Health, Carelon Behavioral Health and CareMore.
+Added: As we announced in 2022, we are organizing our brand portfolio into the following core go-to-market brands:
• Anthem Blue Cross/Anthem Blue Cross and Blue Shield — represents our existing Anthem-branded and affiliated Blue Cross and/or Blue Shield licensed plans;
−Removed: • Wellpoint — we intend to unite select non-BCBSA licensed Medicare, Medicaid and Commercial plans under the Wellpoint name;
−Removed: • Carelon — this brand brings together our healthcare-related services and capabilities, including our formerly named Diversified Business Group and IngenioRx businesses, under a single brand name.
−Removed: In 2022, we managed our operations by customer type through four reportable segments:
−Removed: Commercial & Specialty Business, Government Business, CarelonRx (formerly known as IngenioRx) and Other.
−Removed: As we continue our journey to evolve our business from a traditional health insurance company into a lifetime, trusted health partner, we are evaluating and making changes to how we manage our business.
−Removed: This included a review of the products in each of our operating segments, which resulted in restructurings between some of our operating segments.
−Removed: Therefore, our reportable segment presentation in 2023 and its composition will reflect how we began managing our operations and monitoring performance, aligning strategies and allocating resources on January 1, 2023.
−Removed: For additional discussion, see “Reportable Segments” below in this “Business” section and Note 20, “Segment Information,” of the Notes to Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K.
−Removed: We believe healthcare is local and that we have the strong local presence required to understand and meet local customer needs with regard to any product they are enrolled in with us.
+Added: • Wellpoint — we are uniting select non-BCBSA licensed Medicare, Medicaid and commercial plans under the Wellpoint name;
+Added: • Carelon — this brand brings together our healthcare related services and capabilities, including our CarelonRx and Carelon Services businesses, under a single brand name.
+Added: Our branding strategy reflects the evolution of our business from a traditional health insurance company to a lifetime, trusted health partner.
+Added: Given this evolution, we reviewed and modified how we manage our business, monitor our performance and allocate resources, and made changes to our reportable segments beginning in the first quarter of 2023.
+Added: We now report our results of operations in the following four reportable segments:
+Added: Health Benefits (aggregates our previously reported Commercial & Specialty Business and Government Business segments), CarelonRx, Carelon Services (previously included in our Other segment) and Corporate & Other (our businesses that do not individually meet the quantitative thresholds for an operating segment, as well as corporate expenses not allocated to our other reportable segments).
+Added: During the fourth quarter of 2023, we moved our Carelon Global Solutions international businesses from the Corporate & Other reportable segment to the Carelon Services reportable segment.
+Added: All prior period reportable segment information has been reclassified for comparability to conform to the current presentation.
+Added: For additional discussion, see “Reportable Segments” below in this “Business” section and Note 1, “Organization,” and Note 20, “Segment Information,” of the Notes to Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K.
+Added: We believe healthcare is local and that we have the strong local presence required to understand and meet local customer needs with regard to any product customers are enrolled in with us.
Further, we believe we are well-positioned to deliver what customers want:
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For additional information on our networks and provider relations, product pricing and healthcare cost management programs, see “Pricing and Underwriting of Our Products,” “Networks and Provider Relations,” “Medical Management Programs,” “Care Management and Wellness Products and Programs” and “Healthcare Quality Initiatives” below in this “Business” section.
−Removed: Advances in medical technology, including new specialty drugs, the aging population, other demographic characteristics and the COVID-19 pandemic continue to contribute to rising healthcare costs.
−Removed: Our managed care plans and products are designed to encourage providers and members to participate in quality, cost-effective health benefit programs by using the full range of our innovative medical management services, health-outcomes based initiatives and health quality-based
−Removed: financial incentives.
+Added: Advances in medical technology, including new specialty drugs, the aging population and other demographic characteristics continue to contribute to rising healthcare costs.
+Added: Our managed care plans and products are designed to encourage providers and members to participate in quality, cost-effective health benefit programs by using the full range of our innovative medical management services, health-outcomes based initiatives and health quality-based financial incentives.
We believe our market position and high business retention rates will enable us to realize the long-term benefits of investing in preventive and early detection programs.
Our ability to provide cost-effective health benefits products and services is enhanced through a disciplined approach to internal cost containment, prudent management of our risk exposure and successful integration of acquired businesses.
−Removed: In addition, our ability to manage general and administrative costs continues to be a driver of our overall profitability.
−Removed: Our future results of operations will also be impacted by certain external forces and resulting changes in our business model and strategy.
+Added: In addition, our ability to manage operating expenses continues to be a driver of our overall profitability.
+Added: Our future results of operations will be impacted by certain external forces and resulting changes in our business model and strategy.
Changes to our business environment will continue as elected officials at the national and state levels enact, and both elected officials and candidates for election propose, modifications to existing laws and regulations, including changes to taxes and fees.
−Removed: For additional discussion, see “Regulation” below in this “Business” section and Part I, Item 1A “Risk Factors” in this Annual Report on Form 10-K.
−Removed: Our results of operations are also impacted by levels and mix of membership, which can change as a result of the quality and pricing of our health benefits products and services, an aging population, economic conditions, changes in unemployment, the continued and future impact of the COVID-19 pandemic, acquisitions, entry into new markets and expansions in or exits from existing markets.
−Removed: These membership trends could be negatively impacted by various factors that could have a material adverse effect on our future results of operations such as general economic downturns that result in business failures, failure to obtain new customers or retain existing customers, premium increases, benefit changes, membership impacts caused by COVID-19, including how our members access healthcare services, or our exit from a specific market.
+Added: For additional discussion, see “Regulation” below in this “Business” section and Part I, Item 1A “Risk Factors” included in this Annual Report on Form 10-K.
+Added: Our results of operations are also impacted by levels and mix of membership, which can change as a result of the quality and pricing of our health benefits products and services, an aging population, economic conditions, changes in unemployment, the continued and future impact of large-scale emergencies like the COVID-19 pandemic, acquisitions, entry into new markets and expansions in or exits from existing markets.
+Added: These membership trends could be negatively impacted by various factors that could have a material adverse effect on our future results of operations such as general economic downturns that result in business failures, failure to obtain new customers or retain existing customers, premium increases, benefit changes, membership impacts caused by Medicaid redeterminations, changes in how our members access healthcare services, or our exit from a specific market.
See Part I, Item 1A “Risk Factors” and Part II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in this Annual Report on Form 10-K.
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Through our participation in various federal government programs, we generated approximately 29% of our total consolidated revenues from agencies of the U.S.
−Removed: government for each of the years ended December 31, 2022, 2021 and 2020.
−Removed: The majority of these revenues are contained in our Government Business segment as described below.
+Added: government for the year ended December 31, 2023 and 28% for the years ended December 31, 2022 and 2021, respectively.
+Added: The majority of these revenues are contained in our Health Benefits segment as described below.
An immaterial amount of our total consolidated revenues is derived from activities outside of the U.S.
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Reportable Segments
−Removed: We regularly evaluate the appropriateness of our reportable segments, particularly in light of organizational changes, merger and acquisition activity and changing laws and regulations.
−Removed: As discussed in the “General” section above, we are in the process of organizing our brand portfolio into three core go-to-market brands, and are reviewing and modifying how we will manage our businesses in the future.
−Removed: In 2022, we managed our operations by customer type through four reportable segments:
−Removed: Commercial & Specialty Business, Government Business, CarelonRx (formerly known as IngenioRx) and Other.
−Removed: Our Commercial & Specialty Business segment offers plans and services to our Individual, Group risk-based, Group fee-based and BlueCard ® members.
−Removed: The Commercial & Specialty Business segment offers health products on a full-risk basis;
+Added: In 2022, we managed and presented our operations through the following four reportable segments:
+Added: Commercial & Specialty Business, Government Business, CarelonRx and Other.
+Added: In the first quarter of 2023, we reorganized our reportable segments as described below.
+Added: Previously reported information in this Annual Report on Form 10-K has been reclassified to conform to the new presentation and reflect changes that occurred in 2023.
+Added: Our Health Benefits segment offers a comprehensive suite of health plans and services to our Individual, Employer Group risk-based, Employer Group fee-based, BlueCard ® , Medicare, Medicaid and FEHB program members.
+Added: Our Health Benefits segment also includes our National Government Services business.
+Added: The Health Benefits segment offers health products on a full-risk basis;
provides a broad array of administrative managed care services to our fee-based customers;
−Removed: and provides a variety of specialty and other insurance products and services such as stop loss, dental, vision, life, disability and supplemental health insurance benefits as described below.
−Removed: Our Government Business segment includes our Medicare and Medicaid businesses, National Government Services (“NGS”) and services provided to the federal government in connection with the FEHB business.
−Removed: Our CarelonRx (formerly IngenioRx) segment includes our PBM business.
−Removed: CarelonRx markets and offers PBM services to our affiliated health plan customers, as well as to external customers outside of the health plans we own.
−Removed: CarelonRx has a comprehensive PBM services portfolio, which includes services such as formulary management, pharmacy networks, a prescription drug database, member services and mail order capabilities.
−Removed: Our Other segment includes our Diversified Business Group, now known as Carelon Services, which is our health services business focused on lowering the cost and improving the quality of healthcare by enabling and creating new care delivery and payment models, with a special emphasis on serving those with complex and chronic conditions.
−Removed: This segment also includes certain intercompany eliminations and corporate expenses not allocated to our other reportable segments.
−Removed: As we continue our journey to evolve our business from a traditional health insurance company into a lifetime, trusted health partner, we are evaluating and making changes to how we manage our business.
−Removed: This included a review of the products in each of our operating segments, which resulted in restructurings between some of our operating segments.
−Removed: Therefore, our reportable segment presentation in 2023 and its composition will reflect how we began managing our operations and monitoring performance, aligning strategies and allocating resources on January 1, 2023.
−Removed: As a result of these changes, beginning with our Quarterly Report on Form 10-Q for the first quarter of 2023, we will report our results in the following four reportable segments:
−Removed: (i) Health Benefits, which will combine our existing Commercial & Specialty Business and Government Business segments;
−Removed: (ii) our existing CarelonRx segment;
−Removed: (iii) Carelon Services (our former Diversified Business Group), which will be carved out from our existing Other segment;
−Removed: and (iv) Corporate and Other, which will include businesses that do not individually meet the quantitative thresholds for an operating segment, as well as corporate expenses not allocated to our other reportable segments.
−Removed: We expect to reclassify previously reported information to conform to the new presentation.
+Added: and provides a variety of specialty and other insurance products and services such as stop loss, dental, vision, life, disability and supplemental health insurance benefits.
+Added: Our CarelonRx segment includes our pharmacy business.
+Added: CarelonRx markets and offers pharmacy services, including pharmacy benefit management (“PBM”) services, to our affiliated health plan customers, as well as to external customers outside of the health plans we own.
+Added: CarelonRx offers a comprehensive pharmacy services portfolio, which includes all core
+Added: pharmacy services, such as home delivery and specialty pharmacies, claims adjudication, formulary management, pharmacy networks, rebate administration, a prescription drug database and member services.
+Added: Our Carelon Services segment integrates physical, behavioral, social and pharmacy services to deliver whole health affordably by creating value through the offering of market-competitive services powered by analytics.
+Added: Carelon Services offers a broad array of healthcare related services and capabilities to internal and external customers including utilization management, behavioral health, integrated care delivery, palliative care, payment integrity services and subrogation services, as well as health and wellness programs.
+Added: At the end of 2023, Carelon Services integrated Carelon Global Solutions into the Carelon family of offerings.
+Added: The companies under Carelon Global Solutions have been providing services related to data management, information technology, and business operations since 2019 and were previously included within our Corporate & Other segment.
+Added: Our Corporate & Other segment includes our businesses that do not individually meet the quantitative threshold for an operating segment, as well as corporate expenses not allocated to our other reportable segments.
For additional information, see Note 20, “Segment Information,” of the Notes to Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K.
−Removed: Our medical membership includes seven different customer types:
−Removed: Individual, Group risk-based, Group fee-based, BlueCard ® , Medicare, Medicaid and FEHB.
+Added: Our medical membership includes the following customer types:
+Added: Individual, Employer Group risk-based, Employer Group fee-based, BlueCard ® , Medicare, Medicaid and FEHB.
In addition, we also serve customers who purchase one or more of our other products or services that are often ancillary to our health business.
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We believe that one of the keys to our success has been our focus on these distinct customer types, which better enables us to develop benefit plans and services that meet our customers’ unique needs.
−Removed: Further, CarelonRx was built to simplify pharmacy care and focus on the whole person, and we expect it will make it easier for our customers to achieve better health outcomes at a lower total cost of care.
−Removed: We market our Individual, Medicare and certain Group products with a smaller employee base through direct marketing activities and an extensive network of independent agents, brokers and retail partnerships.
+Added: Further, CarelonRx was built to simplify pharmacy care and focus on the whole person, and we expect it will make it easier for our customers to achieve better health outcomes at a lower total cost of care while improving consumer experience.
+Added: We market our Individual, Medicare and certain Employer Group products with a smaller employee base through direct marketing activities and an extensive network of independent agents, brokers and retail partnerships.
Products for commercial customers with a larger employee base are generally sold through independent brokers or consultants retained by the customer who work with industry specialists from our in-house sales force.
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Federal subsidies are available for certain members, subject to income and family size, who purchase Public Exchange products.
−Removed: In 2022, we made the decision to expand our participation in the Public Exchange market for 2023 after also expanding in 2022.
−Removed: As a result, for 2023 we are offering Individual Public Exchange products in 138 of the 143 rating regions in which we operate, in comparison to 122 of 143 rating regions in 2022.
−Removed: Our strategy has been, and will continue to be, to only participate in rating regions where we have an appropriate level of confidence that these markets are on a path toward sustainability, including, but not limited to, factors such as expected financial performance, regulatory environment and underlying market characteristics.
−Removed: Being a licensee of the BCBS association of companies, of which there were 34 independent primary licensees including us as of December 31, 2022, provides significant market value, especially when competing for very large multi-state
−Removed: employer groups.
+Added: We made the decision to expand our participation in the Individual state- or federally-facilitated marketplaces for 2024.
+Added: We also expect growth in our Public Exchange membership as Medicaid members who are no longer eligible for Medicaid coverage continue to exit the Medicaid program and seek coverage elsewhere.
+Added: For 2024, we are offering Individual Public Exchange products in 141 of the 143 rating regions in which we operate, in comparison to 138 of the 143 rating regions in 2023.
+Added: See “Regulation” below in this “Business” section for additional discussion about the Public Exchange marketplace.
+Added: Being a licensee of the BCBS association of companies, of which there were 34 independent primary licensees including us as of December 31, 2023, provides significant market value, especially when competing for very large multi-state employer groups.
For example, each BCBS member company is able to utilize other BCBS licensees’ substantial provider networks and discounts when any BCBS member works or travels outside of the state in which their policy is written.
This program is referred to as BlueCard ® .
−Removed: BlueCard ® host members are generally members who reside in or travel to a state in which an Elevance Health subsidiary is the Blue Cross and/or Blue Shield licensee and who are covered under an employer-sponsored health plan serviced by a non-Elevance Health controlled BCBS licensee, which is the “home” plan.
−Removed: We perform certain administrative functions for BlueCard ® host members, including claims pricing and administration, for which we receive administrative fees from the BlueCard ® members’ home plan.
+Added: BlueCard ® host members are generally members who reside in or travel to a state in which an Elevance Health subsidiary is the Blue Cross and/or Blue Shield licensee and who are covered under an employer-
+Added: sponsored health plan serviced by a non-Elevance Health controlled BCBS licensee, which is the “home” plan.
+Added: We perform certain administrative functions for BlueCard ® host members, including claims pricing and administration, for which we receive service fees from the BlueCard ® members’ home plan.
Other administrative functions, including maintenance of enrollment information and customer services, are performed by the home plan.
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We refer to members in our service areas licensed by the BCBSA as our BCBS-branded, or Anthem BCBS, business.
−Removed: Non-BCBS-branded business refers to members in our non-BCBS-branded, or Wellpoint plans, which include Amerigroup, Freedom Health, HealthSun, MMM, Optimum Healthcare and Simply Healthcare plans, as well as HealthLink and UniCare members.
+Added: Non-BCBS-branded business refers to members in our non-BCBS-branded, or Wellpoint plans, which include Amerigroup, Freedom Health, HealthSun, MMM, Optimum Healthcare and Simply Healthcare plans.
For additional information describing each of our customer types and changes in medical membership over the last three years, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Membership ” included in Part II, Item 7 of this Annual Report on Form 10-K.
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Members are charged periodic, prepaid premiums and generally pay copayments, coinsurance and/or deductibles when they receive services.
−Removed: Commercial & Specialty Business
+Added: Health Benefits
• Commercial Risk-Based Products.
−Removed: Our Commercial & Specialty Business offers employer groups a diversified mix of managed care risk-based products including:
+Added: We offer employer groups a diversified mix of managed care risk-based products including:
Preferred Provider Organization (“PPO”), Health Maintenance Organization (“HMO”), Consumer-Driven Health Plans (“CDHP”), Traditional Indemnity and Point-of-Service (“POS”) plans.
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• Commercial Fee-Based Products.
−Removed: Our Commercial & Specialty Business provides a broad array of managed care services to fee-based groups, including claims processing, provider network access, medical management, care management and wellness programs, actuarial services and other administrative services.
+Added: We provide a broad array of managed care services to fee-based groups, including claims processing, provider network access, medical management, care management and wellness programs, actuarial services and other administrative services.
Fee-based health plans are also able to use our provider networks and to realize savings through our negotiated provider arrangements, while allowing employers the ability to design certain health benefit plans in accordance with their own requirements and objectives.
−Removed: also charge a premium to underwrite stop loss insurance for employers that maintain fee-based plans but want to limit their retained risk.
−Removed: In addition, we perform certain administrative functions for BlueCard ® host members, discussed under “Membership” above, including claims pricing and administration, for which we receive administrative fees from the BlueCard ® members’ home plans.
+Added: We also charge a premium to underwrite stop loss insurance for employers that maintain fee-based plans but want to limit their retained risk.
+Added: In addition, we perform certain administrative functions for BlueCard ® host members, discussed under “Membership” above, including claims pricing and administration, for which we receive service fees from the BlueCard ® members’
Other administrative functions, including maintenance of enrollment information and customer service, are performed by the home plan.
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We offer supplemental health products, including accident, critical illness and hospital indemnity, which provide coverage for specific conditions or circumstances.
−Removed: Government Business
• Medicare Plans.
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Medicare Advantage membership also includes Medicare Advantage members in our Group Retiree Solutions business who are retired members of commercial accounts or groups who are not affiliated with our commercial accounts that have selected a Medicare Advantage product through us.
−Removed: MMP is a demonstration program focused on serving members who are dually eligible for Medicaid and Medicare.
+Added: MMP is focused on serving members who are dually eligible for Medicaid and Medicare.
Medicare Supplement plans typically pay the difference between healthcare costs incurred by a beneficiary and amounts paid by the traditional Medicare Fee-For-Service program.
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Our Medicaid plans also cover certain dual-eligible customers, as previously described above, who also receive Medicare benefits.
−Removed: As of December 31, 2022, we provide Medicaid and
−Removed: other state sponsored services, such as administrative services, in Arkansas, California, Colorado, Florida, Georgia, Indiana, Iowa, Kentucky, Louisiana, Maryland, Minnesota, Missouri, Nebraska, Nevada, New Jersey, New York, North Carolina, Ohio, Puerto Rico, South Carolina, Tennessee, Texas, Virginia, Washington, West Virginia and Wisconsin.
+Added: In 2023, we provided Medicaid and other state sponsored services, such as administrative services, in Arkansas, California, Colorado, District of Columbia, Florida, Georgia, Indiana, Iowa, Kentucky, Louisiana, Maryland, Minnesota, Missouri, Nebraska, Nevada, New Jersey, New York, North Carolina, Ohio, Puerto Rico, South Carolina, Tennessee, Texas, Virginia, Washington, West Virginia and Wisconsin.
• Federal Employees Health Benefits Program.
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Part B of the Medicare program provides coverage for services provided by physicians, physical and occupational therapists and other professional providers, as well as certain durable medical equipment and medical supplies.
−Removed: Our subsidiary CarelonRx markets and offers PBM services to our affiliated health plan customers throughout the country in both our Commercial & Specialty and our Government business segments, as well as to customers outside of the health plans we own.
−Removed: Our comprehensive PBM services portfolio includes features such as formulary management, pharmacy networks, a prescription drug database, member services and mail order capabilities.
−Removed: CarelonRx delegates certain PBM administrative functions, such as claims processing and prescription fulfillment, to CaremarkPCS Health, L.L.C., which is a subsidiary of CVS Health Corporation (“CVS Health”), pursuant to a five-year agreement (the “CVS PBM Agreement”) that is set to terminate on December 31, 2024.
−Removed: With CarelonRx, we retain the responsibilities for clinical and formulary strategy and development, member and employer experiences, operations, sales, marketing, account management and retail network strategy.
−Removed: From December 2009 through December 2019, we delegated certain PBM functions and administrative services to Express Scripts Inc.
−Removed: (“Express Scripts”).
−Removed: We transitioned existing members from Express Scripts to CarelonRx by January 1, 2020.
−Removed: Our Other segment includes our Diversified Business Group, now known as Carelon Services.
−Removed: Business units in Carelon Services offer a broad array of healthcare related services and capabilities to internal and external customers including integrated care delivery, behavioral health, palliative care, utilization management, payment integrity services and subrogation services, as well as health and wellness programs.
+Added: Our subsidiary CarelonRx markets and offers pharmacy services to our affiliated health plan customers throughout the country in our Health Benefits segment, as well as to customers outside of the health plans we own.
+Added: Our comprehensive pharmacy services portfolio includes all core pharmacy services, such as home delivery and specialty pharmacies, claims adjudication, formulary management, pharmacy networks, rebate administration, a prescription drug database and member services.
+Added: CarelonRx delegates certain core pharmacy services to CaremarkPCS Health, L.L.C., which is a subsidiary of CVS Health Corporation (“CVS”), pursuant to an agreement that is set to terminate on December 31, 2025 (the “CVS Agreement”).
+Added: Carelon Services
+Added: Business units in Carelon Services offer a broad array of healthcare related services and capabilities to internal and external customers, including utilization management, behavioral health, integrated care delivery, palliative care, payment integrity services and subrogation services, health and wellness programs, information technology services and global business process support.
Key services offered include:
+Added: • Advanced Analytics and Services.
+Added: We leverage data, analytics, and insights to help improve outcomes and lower the cost of care, by ensuring that our members receive safe, appropriate, high-quality, cost-effective care and that our providers are reimbursed accurately and timely.
• Behavioral Health.
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Additionally, we provide non-hospice, community-based palliative care to deliver an extra layer of personalized support and whole-person care.
−Removed: • Advanced Analytics and Services.
−Removed: We leverage data, analytics, and insights to help improve outcomes and lower the cost of care, by working to ensure that our members receive safe, appropriate, high-quality, cost-effective care and that our providers are reimbursed accurately and timely.
The managed care industry is highly competitive, both nationally and in our local markets.
Competition continues to be intense due to aggressive marketing, pricing, bid activity for government-sponsored programs, business consolidations, new strategic alliances, new competitors in the market, a proliferation of new products, technological advancements, the impact of legislative reform, increased quality awareness and price sensitivity among customers and changing market practices, such as increased usage of telehealth.
−Removed: We believe that participants in the managed care industry compete for customers based on quality of service, price, access to provider networks, access to care management and wellness programs (including health information), innovation, effective use of digital technology, breadth and flexibility of products and benefits, expertise and reputation (including National Committee on Quality Assurance (“NCQA”) accreditation status as well as CMS Star ratings), brand recognition and financial stability.
+Added: We believe that participants in the managed care industry compete for customers based on quality of service, price, access to provider networks, access to care management and wellness programs (including health information), innovation, effective use of digital technology, breadth and flexibility of products and benefits, expertise and reputation (including National Committee on Quality Assurance (“NCQA”) accreditation status as well as CMS Star ratings), brand recognition
+Added: and financial stability.
Our ability to attract and retain customers is substantially tied to our ability to distinguish ourselves from our competitors in these areas.
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We believe that we have good relationships with our agents and brokers, and that our products, support services and commission structure compare favorably to those of our competitors in all of our markets.
−Removed: In addition, the PBM industry is highly competitive, and CarelonRx is subject to competition from national, regional and local PBMs, insurers, health plans, large retail pharmacy chains, large retail stores, supermarkets, mail order pharmacies, web pharmacies and specialty pharmacies.
−Removed: Strong competition within the PBM industry has generated greater demand for lower product and service pricing, increased revenue sharing and enhanced product and service offerings.
+Added: In addition, the pharmacy industry is highly competitive, and CarelonRx is subject to competition from national, regional and local pharmacy service providers, insurers, health plans, large retail pharmacy chains, large retail stores, supermarkets, mail order pharmacies, web pharmacies and specialty pharmacies.
+Added: Strong competition within the pharmacy industry has generated greater demand for lower product and service pricing, increased revenue sharing and enhanced product and service offerings.
Pricing and Underwriting of Our Products
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For our risk-based business, any deviation, favorable or unfavorable, from the medical costs assumed in determining the premium is our responsibility.
−Removed: Some of our larger groups employ retrospective rating reviews, where positive experience is partially refunded to the group, and negative experience is charged against a rate stabilization fund established from the group’s favorable experience or charged against future favorable
+Added: Some of our larger groups employ retrospective rating reviews, where positive experience is partially refunded to the group, and negative experience is charged against a rate stabilization fund established from the group’s favorable experience or charged against future favorable experience.
In addition, our ACA and government risk-based contracts may include minimum medical loss ratio, risk adjustment, or risk corridor arrangements, which also stabilize premiums based upon claims experience.
−Removed: Our pharmacy pricing through CarelonRx is presented to market via discounts off the average wholesale price for drugs dispensed through the retail, mail and specialty channels as well as through rebate projections.
+Added: Our pharmacy services pricing through CarelonRx is presented to market via discounts off the average wholesale price for drugs dispensed through the retail, mail and specialty channels as well as through rebate projections.
We utilize group-specific script data, formulary, network and clinical care program selection combined with administrative expense, risk and profit guidance to set market competitive pricing discounts and rebate projections.
−Removed: Pharmacy pricing guidelines guide the underwriting process and undergo an annual external review process to ensure market competitiveness.
+Added: Pharmacy services pricing guidelines guide the underwriting process and undergo an annual external review process to ensure market competitiveness.
Networks and Provider Relations
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A small percentage of hospitals, primarily rural, sole community hospitals, are reimbursed on a discount from approved charge basis for covered services.
−Removed: Our “per-case” reimbursement
−Removed: methods utilize many of the same attributes contained in Medicare’s Diagnosis Related Groups methodology.
+Added: Our “per-case” reimbursement methods utilize many of the same attributes contained in Medicare’s Diagnosis Related Groups methodology.
Hospital outpatient services are reimbursed by fixed case rates, fee schedules or percent of approved charges.
−Removed: Our hospital contracts recognize unique hospital attributes, such as academic medical centers or community hospitals, and the volume of care performed for our members.
+Added: Our hospital contracts recognize unique hospital attributes, such as academic medical centers or community hospitals, and the volume of care
+Added: performed for our members.
To improve predictability of expected costs, we frequently use a multi-year contracting approach with providers.
In addition, the majority of our hospital contracts include a pay-for-performance component where reimbursement levels are linked to improved clinical performance, patient safety and medical error reduction.
−Removed: We experience seasonality in our Commercial & Specialty Business and Government Business segments.
+Added: We experience seasonality in our Health Benefits segment.
While our premium revenues are not seasonal, our benefit costs typically increase during the year as our risk-based members pay their contractual portion of claims responsibility under annual deductibles and reach their out-of-pocket maximum limits.
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Our 24/7 NurseLine offers access to qualified, registered nurses to allow our members to make informed decisions about the appropriate level of care and avoid unnecessary worry.
−Removed: Our CareMore subsidiary specializes in whole-person care for members with complex and chronic conditions to improve clinical outcomes and patient wellbeing.
+Added: Our CareMore subsidiary specializes in whole-person care for members with complex and chronic conditions to improve clinical outcomes and patient well-being.
Our Aspire Health subsidiary engages with members near end of life and/or requiring palliative care to manage serious illnesses and improve quality of life during a difficult time.
+Added: Beginning in 2024, Aspire Health and CareMore have rebranded and now operate under the new name, Carelon Health.
With our integrated information systems and sophisticated data analytics, we help our members improve their compliance with evidence-based care guidelines, provide personal care notes that alert members to potential gaps in care, enable more prudent healthcare choices and assist in the realization of member out-of-pocket cost savings.
Our employee assistance programs provide 24/7 telephonic support for personal and crisis events and provide resources such as counseling and referral assistance with childcare, health and wellness, financial issues, legal issues, adoption and daily living.
−Removed: We have a comprehensive behavioral health case
−Removed: management program supporting a wide range of members who are impacted by their behavioral health condition, including specialty areas such as eating disorders, anxiety, depression and substance abuse.
−Removed: The program assists members and their families with obtaining appropriate behavioral health treatment, offering community resources, providing education and telephonic support, and promoting provider collaboration.
+Added: We have a comprehensive behavioral health case management program supporting a wide range of members who are impacted by their behavioral health conditions, including specialty areas such as eating disorders, anxiety, depression and substance abuse.
+Added: The program assists members and their
+Added: families with obtaining appropriate behavioral health treatment, offering community resources, providing education and telephonic support, and promoting provider collaboration.
Healthcare Quality Initiatives
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HEDIS ® measures range from preventive services, such as screening mammography and pediatric immunization, to elements of care, including decreasing the complications of diabetes, improving treatment for patients with heart disease, integration of behavioral health, and racial and ethnic stratification measurement to help close healthcare disparities.
−Removed: Through our AIM Specialty Health (“AIM”) subsidiary, we promote appropriate, safe and affordable member care in the areas of imaging, sleep disorders, cardiac testing, oncology drugs and musculoskeletal procedures.
−Removed: These expanded specialty benefit management solutions leverage clinical expertise and technology to engage provider communities and members in the more effective and efficient use of outpatient services and to promote the most appropriate use of clinical services to improve the quality of overall healthcare delivered to our members and members of other health plans that are covered under AIM’s programs.
−Removed: Through our myNEXUS, Inc.
−Removed: (“myNEXUS”) subsidiary, we perform management review for home health services provided to Medicare members, with the goal of ensuring they receive appropriate, high-quality care and supporting their transition back into the home.
+Added: Through our Carelon Medical Benefits Management, Inc.
+Added: subsidiary, formerly known as AIM Specialty Health, we promote appropriate, safe and affordable member care in areas including imaging, sleep disorders, cardiac testing, oncology drugs and musculoskeletal procedures.
+Added: These expanded specialty benefit management solutions leverage clinical expertise and technology to engage provider communities and members in the more effective and efficient use of outpatient services and to promote the most appropriate use of clinical services to improve the quality of care.
+Added: Through our Carelon Post Acute Solutions, Inc.
+Added: subsidiary, formerly known as myNEXUS, Inc., we perform management review for home health and post-acute institutional services provided to Medicare members, with the goal of ensuring they receive appropriate, high-quality care and supporting their transition back into the home.
Effective management of these services can help reduce preventable hospital admissions and readmissions, thereby improving healthcare outcomes for patients.
−Removed: Additionally, myNEXUS has developed programs to address healthcare quality by identifying social determinants of health needs of our members and seeking to close gaps in care through an in-home assessment.
−Removed: Both AIM and myNEXUS programs are examples of how we facilitate improvements in the quality of care provided to our members and promote cost-effective medical care.
+Added: Additionally, Carelon Post Acute Solutions, Inc.
+Added: has developed programs to address healthcare quality by identifying and closing care gaps.
+Added: A social determinants of health program screens our members for social needs and connects members to appropriate community resources to encourage better care outcomes.
+Added: Both medical benefits management and post acute solutions programs are examples of how we facilitate improvements in the quality of care provided to our members and promote cost-effective medical care.
The physical aspects of health have been traditionally the focus and the priority for healthcare.
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Harnessing data gives a more complete picture of each individual and their health needs and can help make healthcare more personalized and equitable.
−Removed: Strengthening communities has a positive effect on health therefore we value and nurture our local ties which are a key component of our whole-health approach and drive us to work closely with community organizations that create support networks.
+Added: Strengthening communities has a positive effect on health;
+Added: therefore, we value and nurture our local ties, which are a key component of our whole-health approach and drive us to work closely with community organizations that create support networks.
Using our data, we also identify the resources needed to support local residents, including the people who we serve, to ensure those resources can better meet local needs.
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BCBSA is a national association of independent Blue Cross and Blue Shield companies, the primary function of which is to promote and preserve the integrity of the BCBS names and marks, as well as provide certain coordination among the member companies.
−Removed: Each BCBSA licensee
−Removed: is an independent legal organization and is not responsible for obligations of other BCBSA member organizations.
−Removed: Although previously we did not have a right to sell products and services using the BCBS names and marks outside of the states in which we are licensed to sell BCBS products, under the terms of the subscriber settlement agreement and release (“Subscriber Settlement Agreement”) among the class of plaintiffs, BCBSA and Blue Cross and/or Blue Shield licensees, including us (the “Blue plans”), some large national employers with self-funded plans (specifically identified in the Subscriber Settlement Agreement) have a right to request a second Blue plan bid in addition to a bid from the local Blue plan.
+Added: Each BCBSA licensee is an independent legal organization and is not responsible for obligations of other BCBSA member organizations.
+Added: previously we did not have a right to sell products and services using the BCBS names and marks outside of the states in which we are licensed to sell BCBS products, under the terms of the subscriber settlement agreement and release (“Subscriber Settlement Agreement”) among the class of plaintiffs, BCBSA and Blue Cross and/or Blue Shield licensees, including us (the “Blue plans”) and some large national employers with self-funded plans (specifically identified in the Subscriber Settlement Agreement), have a right to request a second Blue plan bid in addition to a bid from the local Blue plan.
The Subscriber Settlement Agreement received final approval in August 2022.
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In addition, there are numerous proposed healthcare laws and regulations at the federal and state levels, including single payer, Medicare for All and public option proposals, some of which could materially adversely affect our businesses if they were to be enacted.
−Removed: Supervisory agencies, including federal and state regulators and departments of health, insurance and corporation, have broad authority to:
+Added: Supervisory agencies, including federal and state regulators, departments of health and insurance and secretaries of state, have broad authority to:
• grant, suspend and revoke licenses to transact business;
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• monitor our solvency and reserve adequacy;
−Removed: • audit, and recovery of audit discrepancies, including risk adjustment data validation (“RADV”) audits;
+Added: • audit, and recover audit discrepancies, including risk adjustment data validation (“RADV”) audits;
• scrutinize our investment activities on the basis of quality, diversification and other quantitative criteria;
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To carry out these tasks, these government entities periodically examine our operations and accounts.
−Removed: The health benefits business also may be adversely impacted by court and regulatory decisions that expand or invalidate the interpretations of existing statutes and regulations.
+Added: The health benefits business, pharmacy services, and related healthcare products and services businesses also may be adversely impacted by court and regulatory decisions that expand or invalidate the interpretations of existing statutes and regulations.
It is uncertain whether we could recoup, through higher premiums or other measures, the increased costs of mandated benefits or other increased costs caused by potential legislation, regulation or court rulings.
See Part I, Item 1A “Risk Factors” in this Annual Report on Form 10-K.
−Removed: With the declaration of COVID-19 as a public health emergency (“PHE”), the federal and state governments have enacted, and may continue to enact, legislation and regulations in response to the COVID-19 pandemic that have had, and we expect will continue to have, a significant impact on health benefits, consumer eligibility for public programs and our cash flows for all lines of business, and which have introduced increased uncertainty around our cost structure.
−Removed: These actions, which are or have been in effect for various durations, provide, among other things:
−Removed: mandates to waive cost-sharing for COVID-19 testing, vaccines and related services;
−Removed: financial support to healthcare providers;
−Removed: and mandates related to prior authorizations, payment levels to providers, consumer enrollment windows and telehealth services.
−Removed: The Biden administration renewed the PHE on January 11, 2023 and has indicated that they intend for the PHE to expire on May 11, 2023.
−Removed: Under the Consolidated Appropriations Act of 2023 (the “2023 Appropriations Act”), Congress decoupled Medicaid eligibility recertification from the PHE.
−Removed: As a result, states may begin removing ineligible beneficiaries from their Medicaid programs starting April 1, 2023.
−Removed: When recertifications resume, we expect a decline in our Medicaid membership.
−Removed: At the same time, we expect growth in our Commercial risk-based and fee-based plans and Medicare, including through the Public Exchanges, as members exiting Medicaid in our 14 Commercial states seek coverage elsewhere.
+Added: The Consolidation Appropriations Act of 2023
+Added: Under the Consolidated Appropriations Act of 2023, Congress decoupled Medicaid eligibility redetermination from the Public Health Emergency initially declared in January 2020 relating to COVID-19 (the “PHE”).
+Added: As a result, states were permitted to begin removing ineligible beneficiaries from their Medicaid programs starting April 1, 2023, and the majority of our Medicaid markets began doing so as of June 30, 2023.
+Added: This process is anticipated to take up to 14 months to complete, although most states are expected to complete the redetermination process by June 30, 2024.
+Added: As redeterminations have resumed, we have experienced a decline in our Medicaid membership.
+Added: We have seen, and we expect to continue to see, growth in our commercial plans, including through the Public Exchanges, and Medicare as members who are no longer eligible for Medicaid coverage in our 14 commercial states seek coverage elsewhere.
+Added: On May 11, 2023, the PHE ended in accordance with the Biden Administration’s January 30, 2023 announcement.
The Inflation Reduction Act of 2022
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and delaying the implementation of the Trump Administration Medicare drug rebate rule to 2032.
−Removed: The extension of the enhanced PTC will likely allow for growth in Individual exchange market enrollment as Medicaid eligibility recertifications resume, supporting continuity of coverage for more people.
+Added: The extension of the enhanced PTC has allowed for growth in Individual Public Exchange enrollment as Medicaid eligibility redeterminations have resumed, supporting continuity of coverage for more people.
The Consolidated Appropriations Act of 2021
−Removed: The Consolidated Appropriations Act of 2021 (the “2021 Appropriations Act”) has impacted us since passage and in the future may have a material effect upon our business, including procedures and coverage requirements related to surprise medical bills and new mandates for continuity of care for certain patients, price comparison tools, disclosure of broker compensation, mental health parity reporting, and reporting on pharmacy benefits and drug costs.
−Removed: The requirements of the 2021 Appropriations Act applicable to us have varying effective dates, some of which were effective in December 2021 and during 2022, and others of which have been extended into 2023 since the enactment of the 2021 Appropriations Act.
+Added: The Consolidated Appropriations Act of 2021 (the “2021 Appropriations Act”) has impacted us since its passage and in the future may have a material effect upon our business, including procedures and coverage requirements related to surprise medical bills and new mandates for continuity of care for certain patients, price comparison tools, disclosure of broker compensation, mental health parity reporting, and reporting on pharmacy benefits and drug costs.
+Added: The requirements of the 2021 Appropriations Act applicable to us have varying effective dates, some of which were effective in December 2021 and during 2022, and others that were extended into 2023 since the enactment of the 2021 Appropriations Act.
State Regulation of Insurance Companies and HMOs
Our insurance and HMO subsidiaries must obtain a certificate of authority and maintain that license in the jurisdictions in which they conduct business.
−Removed: The National Association of Insurance Commissioners (“NAIC”) has adopted model regulations that, where adopted by states, require expanded governance practices, risk and solvency assessment reporting and
−Removed: the filing of periodic financial and operating reports.
+Added: The National Association of Insurance Commissioners (“NAIC”) has adopted model regulations that, where adopted by states, require expanded governance practices, risk and solvency assessment reporting and the filing of periodic financial and operating reports.
Most states have adopted these or similar measures to expand the scope of regulations relating to corporate governance and internal control activities of HMOs and insurance companies.
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Approximately 52.3% and 18.0% of our premium revenue and medical membership, respectively, were subject to the minimum MLR regulations as of and for the year ended December 31, 2023.
−Removed: Approximately 53.6% and 18.4%
−Removed: of our premium revenue and medical membership, respectively, were subject to the minimum MLR regulations as of and for the year ended December 31, 2021.
+Added: Approximately 52.3% and 17.5% of our premium revenue and medical membership, respectively, were subject to the minimum MLR regulations as of and for the year ended December 31, 2022.
• The creation of an incentive payment program for Medicare Advantage plans.
−Removed: CMS developed the Medicare Advantage Star ratings system, which awards between 1.0 and 5.0 Stars to Medicare Advantage plans based on performance in several categories, including quality of care and customer service.
+Added: CMS developed the Medicare Advantage Star ratings system, which awards between 1.0 and 5.0 Stars to Medicare Advantage plans based on
+Added: 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.
−Removed: For payment year 2023, we expect to have approximately 73% of our Medicare Advantage members in 4.0 or higher rated plans.
+Added: CMS released our 2024 Star ratings in October 2023, which will be used to determine our Medicare Advantage plans’ Star quality bonus payments beginning in 2025.
+Added: Based on our membership at September 1, 2023, 34% of our Medicare Advantage members were in plans with 2024 Star ratings of at least 4.0 Stars, compared to 64% of our Medicare Advantage members being in plans with 2023 Star ratings of at least 4.0 Stars based on our membership at September 1, 2022.
+Added: This change in our 2024 Star ratings is expected to impact our Star quality bonus payments and plan level rebates beginning in 2025.
+Added: We expect a reduction to our 2025 operating revenue of approximately $500 million, net of offsets from contracting provisions.
+Added: Further, we expect to partially mitigate the financial impact to our 2025 operating gain and net income 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 evaluate our experience in the Public Exchange markets.
−Removed: Based on the viability of the Public Exchanges and availability of federal subsidies, we have made adjustments to our premium rates and geographic participation, including a modest expansion in the Public Exchange markets in 2022 and further expansion into a limited number of additional counties in 2023.
+Added: Based on the viability of the Public Exchanges and availability of federal subsidies, we have made a decision to expand our participation in the Individual state, or federally-facilitated, marketplaces for 2024.
+Added: We also expect continued growth in our Public Exchange membership as Medicaid members who are no longer eligible for Medicaid coverage continue to exit the Medicaid program and seek coverage elsewhere.
+Added: For 2024, we are offering Individual Public Exchange products in 141 of the 143 rating regions in which we operate, in comparison to 138 of the 143 rating regions in 2023.
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.
−Removed: As a result, for 2023 we are offering Individual Public Exchange products in 138 of the 143 rating regions in which we operate, in comparison to 122 of 143 rating regions in 2022.
−Removed: Our strategy has been, and will continue to be, to only participate in rating regions where we have an appropriate level of confidence that these markets are on a path toward sustainability, including, but not limited to, factors such as expected financial performance, regulatory environment and underlying market characteristics.
−Removed: Drug Benefit and Pharmacy Benefit Manager Regulation
−Removed: Pharmacy benefit managers are regulated at both the federal and state levels and must comply with federal and state statutes and regulations governing labeling, packaging, advertising and adulteration of prescription drugs, dispensing of controlled substances and licensing.
−Removed: In recent years the federal government has banned certain business practices, including “gag clauses,” which prohibited pharmacists from informing patients when a lower cost drug was available as a substitute, and “clawbacks,” which occurred when pharmacy benefit managers sought to recoup the difference between the reimbursed cost of the drug and the patient’s copay when the drug itself was less expensive than the copay paid by the patient.
−Removed: Regulation in the states varies dramatically and ranges from licensure of PBMs as third-party administrators, licensure specifically as a pharmacy benefit manager, and licensure accompanied by additional disclosures and limitations of business practices to varying degrees.
−Removed: The NAIC finalized a PBM model law that, if adopted widely, could result in a more standardized approach to PBM regulation in the states in the future.
−Removed: Additionally, in December 2020, the U.S.
−Removed: Supreme Court let stand an Arkansas law regulating PBMs, which could be a precursor to greater state regulation of PBMs in the future.
−Removed: In June 2021, the NAIC announced a proposed white paper addressing PBMs and examining the impact of this Supreme Court case on its model law, which could result in expansion of the NAIC model law and additional regulatory oversight, which could materially affect current industry practices and our PBM business.
−Removed: A number of proposals are being considered at the federal and state levels that would increase regulation of drug benefits and pharmacy benefit managers.
−Removed: Such proposals under consideration include (1) regulation of rebates from drug manufacturers that would require rebate dollars to be applied at the point-of-sale, (2) federal policy changes to set the prices for a subset of drugs covered under the Medicare program, (3) reforms to the Medicare drug benefit, such as beneficiary cost-sharing changes that aim to lower consumer costs, (4) attempts at both the federal and state levels to prohibit the use of spread pricing contracts in both the Commercial and Medicaid markets, and (5) electronic prior authorizations of drugs.
−Removed: These reforms have the potential to have broad impacts on our PBM business and could materially adversely affect our business if they are enacted.
+Added: Changes to our business environment are likely to continue as elected officials at the federal and state levels continue to enact, and both elected officials and candidates for election continue to propose, significant modifications to existing laws and regulations, including changes to taxes and fees.
+Added: Pharmacy Services and Drug Benefit Regulation
+Added: Pharmacy services, including PBMs, are regulated at both the federal and state levels and must comply with federal and state statutes and regulations governing a PBM's business, including, but not limited to pharmacy network restrictions and configurations, formulary management, affiliate pharmacy reimbursement, anti-steering to affiliated pharmacies, pharmacy effective rates, guarantees and reconciliations, reimbursement pricing type mandates, purchase discount and/or rebate arrangements with drug manufacturers, advertising and licensing.
+Added: For example, in recent years the state and federal governments have banned certain PBM business practices, including “gag clauses,” which prohibit pharmacists from informing patients when a lower cost drug was available as a substitute, and “clawbacks,” which occurred when PBMs sought to recoup the difference between the reimbursed cost of the drug and the patient’s copay when the drug itself was less expensive than the copay paid by the patient.
+Added: Regulation in the states varies dramatically and ranges from licensure of PBMs as third-party administrators, licensure specifically as a PBM, and licensure accompanied by additional disclosures and limitations of business practices to varying degrees.
+Added: PBMs are also subject to continued changes in public policy, legislation, laws, and regulations relating to drug benefits and pharmacy services, which include, but are not limited to (1) regulation of rebates from drug manufacturers that would require rebate dollars to be applied at the point-of-sale, (2) federal policy changes to set the prices for a subset of drugs covered under the Medicare program, (3) reforms to the Medicare drug benefit, such as beneficiary cost-sharing changes that aim to lower consumer costs, (4) attempts at both the federal and state levels to prohibit the use of spread pricing contracts in both the commercial and Medicaid markets, (5) prior authorizations of drugs, (6) transparency and public disclosure of costs and profits, (7) prohibiting exclusive specialty and mail pharmacy networks, (8) limiting accreditation and credentialing requirements, and (9) consumer choice/any willing provider requirements.
+Added: These changes in public policy, legislation, laws, and regulations have the potential to have broad impacts on our pharmacy benefit management services and could materially adversely affect our business.
+Added: Our pharmacy services business include home delivery and specialty pharmacies, as well as clinic-based pharmacies, which must be licensed as pharmacies in the states in which they are located.
+Added: Certain pharmacies must also register with the U.S.
+Added: Drug Enforcement Agency (“DEA”) and individual state-controlled substance authorities to dispense controlled
+Added: In addition to adhering to the laws and regulations in the states where our pharmacies are located, we may also be required to comply with certain laws and regulations in certain states into which one of our pharmacies delivers prescription drugs, including those requiring us to register with Boards of Pharmacy as a non-resident pharmacy.
+Added: These non-resident states generally expect our pharmacies to follow the laws of the state in which the pharmacies are located, but some non-resident states also require us to comply with certain of their pharmacy regulations as well.
+Added: Additionally, pharmacies that participate in Medicare or Medicaid pharmacy networks are required to comply with applicable Medicare and Medicaid provider rules and regulations.
Privacy, Confidentiality and Data Standards Regulation
−Removed: The federal Health Insurance Portability and Accountability Act of 1996 (“HIPAA”) and the administrative simplification provisions of HIPAA impose a number of requirements on covered entities (including insurers, HMOs, group health plans, providers and clearinghouses) and their business associates relating to the use, disclosure and safeguarding of
−Removed: protected health information.
+Added: The federal Health Insurance Portability and Accountability Act of 1996 (“HIPAA”) and the administrative simplification provisions of HIPAA impose a number of requirements on covered entities (including insurers, HMOs, group health plans, providers and clearinghouses) and their business associates relating to the use, disclosure and safeguarding of protected health information.
These requirements include uniform standards of common electronic healthcare transactions;
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The Cybersecurity Information Sharing Act of 2015 encourages organizations to share cyber threat indicators with the federal government and, among other things, directed HHS to develop a set of voluntary cybersecurity best practices for organizations in the healthcare industry, which were issued in 2018.
−Removed: In addition, Public Exchanges are required to adhere to privacy and security standards with respect to personally identifiable information and to impose privacy and security standards that are at least as protective as those the Public Exchange has implemented for itself on insurers offering plans through the Public Exchanges and their designated downstream entities, including pharmacy benefit managers and other business associates.
+Added: New cybersecurity disclosure rules adopted by the Securities and Exchange Commission (SEC) became effective in December 2023.
+Added: Public companies that experience a cybersecurity incident that is determined by the company to be material are now required to file a Current Report on Form 8-K describing the material aspects of the nature, scope and timing of the incident, and the material impact or reasonably likely material impact on the company, including its financial condition and results of operations, within four business days after the company determines that the incident is material.
+Added: In addition, Public Exchanges are required to adhere to privacy and security standards with respect to personally identifiable information and to impose privacy and security standards that are at least as protective as those the Public Exchange has implemented for itself on insurers offering plans through the Public Exchanges and their designated downstream entities, including pharmacy services providers and other business associates.
These standards may differ from, and be more stringent than, HIPAA.
Furthermore, states have begun enacting more comprehensive privacy laws and regulations addressing consumer rights to data protection or transparency that may affect our privacy and security practices, such as state laws like the California Privacy Rights Act of 2020 that govern the use, disclosure and protection of member data and impose additional breach notification requirements.
−Removed: The NAIC is planning potential revisions to one or more of its privacy model acts, which could expand consumer privacy rights.
+Added: The NAIC is drafting a new privacy model act, which could expand consumer privacy rights.
State consumer protection laws may also apply to privacy and security practices related to personally identifiable information, including information related to consumers and care providers.
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Federal regulations have been finalized in the following areas that will continue to materially impact our operations:
−Removed: • Federal regulations on data interoperability that require claims data to be made available to third parties unaffiliated with us;
+Added: • Federal regulations on data interoperability that require claims data to be made available to third parties unaffiliated with us that may not be HIPAA regulated;
• Federal regulations requiring hospitals and health insurers to publish negotiated prices for services, including the health plan price transparency regulations issued in October 2020 by the U.S.
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Beginning in July 2022, the Health Plan Transparency Rule required us to disclose, on a monthly basis, detailed pricing information regarding negotiated rates for all covered items and services between the plan or issuer and in-network providers and historical payments to, and billed charges from, out-of-network providers.
−Removed: Additionally, beginning in 2023, we are now required to make available to members personalized out-of-pocket cost information and the underlying negotiated rates for 500 covered healthcare items and services, including prescription drugs.
−Removed: In 2024, this requirement will expand to all items and services.
+Added: Additionally, beginning in 2023, we were required to make available to members personalized out-of-pocket cost information and the underlying negotiated rates for 500 covered healthcare items and services, including prescription drugs.
+Added: Effective January 1, 2024, this requirement has expanded to include all items and services.
Employee Retirement Income Security Act of 1974
The provision of services to certain employee welfare benefit plans is subject to the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), a complex set of laws and regulations subject to interpretation and enforcement by the Internal Revenue Service and the Department of Labor.
−Removed: ERISA regulates certain aspects of the relationships between us, the employers that maintain employee welfare benefit plans subject to ERISA and participants in
+Added: ERISA regulates certain aspects of the relationships between us, the employers that maintain employee welfare benefit plans subject to ERISA and participants in such plans.
Some of our administrative services and other activities may also be subject to regulation under ERISA.
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International Regulation
−Removed: We have various international subsidiaries, which provide back-office services, that are subject to different, and sometimes more stringent, legal and regulatory requirements that vary widely by jurisdiction.
+Added: We have various international subsidiaries, which provide administrative and other services, that are subject to different, and sometimes more stringent, legal and regulatory requirements that vary widely by jurisdiction.
In addition, our non-U.S.
operations are subject to U.S.
−Removed: laws regulating the conduct and activities of U.S.-based businesses operating abroad, including but not limited to, the Foreign Corrupt Practices Act and corresponding foreign laws governing anti-bribery, anti-corruption and anti-money laundering.
+Added: laws regulating the conduct and activities of U.S.-based businesses operating abroad, including but not limited to, the Foreign Corrupt Practices Act and corresponding foreign laws governing anti-bribery, anti-corruption, anti-money laundering, data protection and privacy, employment, and other regulatory oversight initiatives.
Human Capital
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As of December 31, 2023, our employee population, including all full-time, part-time and temporary workers, consisted of approximately 104,900 individuals, 78,100 in the United States and 26,800 internationally.
−Removed: We have built a high-performance culture that we believe enhances our ability to deliver on our commitments and guides us to address the challenges of today.
+Added: We believe we have built a high-performance culture that enhances our ability to deliver on our commitments and guides us to address the challenges of today.
We believe that our culture allows us to attract and retain talented and experienced individuals to support the communities we serve.
−Removed: Our associates actively participate through associate engagement surveys and online feedback tools.
−Removed: We leverage and monitor associate feedback and take action on responses.
+Added: Each year we conduct an internal associate engagement survey that provides our associates with an opportunity to share their opinions and experiences with respect to their roles, their teams and the Company, and we also offer online feedback tools.
+Added: Our management team reviews, monitors and analyzes associate feedback and acts on responses to identify
+Added: opportunities to adjust our policies and benefits to improve our associates’ experiences.
+Added: More than 90% of our associates participated in the survey conducted in 2023.
+Added: Because dedication to human capital management is a core component of our corporate governance, the Compensation and Talent Committee of our Board of Directors regularly reviews and discusses management's approach to talent acquisition and retention, and also monitors our programs and practices related to workforce diversity and inclusion.
Inclusion & Diversity
The diversity of our associates is central to achieving key strategies and improving performance.
−Removed: We strive to maintain a diverse and inclusive workforce comprised of a vast array of backgrounds, life experiences and cultures, which we believe enables a deeper connection with our members, allowing us to better serve our members and communities, and drives greater business results.
+Added: We strive to attract, develop, maintain and support a diverse and inclusive workforce comprised of a vast array of backgrounds, life experiences and cultures, which we believe enables a deeper connection with our members, allowing us to better serve our members and communities, and drives greater business results.
+Added: In order to build diverse and inclusive teams, our CEO and executive management set expectations for inclusive leadership and hold leaders accountable for achieving results.
As of December 31, 2023, our U.S.
−Removed: associate population was approximately 77% female and 51% racially and ethnically diverse, while 65% of our managers are female and 36% are racially or ethnically diverse.
−Removed: Elevance Health is committed to a fair pay workplace.
+Added: associate population was approximately 77% female and 50% racially and ethnically diverse, while 65% of our managers in the U.S.
+Added: were female and 38% were racially or ethnically diverse.
+Added: We are committed to a fair pay workplace.
We were in the first cohort of companies certified by the Fair Pay Workplace (“FPW”), an independent certification that takes a holistic approach to pay equity, partnering to design an annual pay equity action plan that includes a perpetual review of all positions, new hires and promotions to effect meaningful and measurable change.
This independent certification is based on a set of publicly available rules and standards and the endorsed methodology of a group of leading experts from forward-thinking corporations, academia, human resources, data science and the legal field.
−Removed: After partnering with and overseeing our review process, FPW has validated our analysis of our associate population, which found that pay for females is within 1% of their male counterparts and pay for people of color is equal to their white counterparts, after taking into account neutral job related factors.
+Added: After partnering with and overseeing our review process, FPW has validated our analysis of our associate population, which found that pay for females in the U.S.
+Added: is within 1% of their male counterparts and pay for people of color in the U.S.
+Added: is equal to their white counterparts, after taking into account neutral job-related factors.
Talent Development
Growing and developing our talent internally is key to our succession plans and our ability to lead at our best every day.
−Removed: To inspire a high-performance culture and promote talent excellence, we offer individual, career and leadership development
−Removed: opportunities, encouraging associates to continually learn and grow.
+Added: To inspire a high-performance culture and promote talent excellence, we offer individual, career and leadership development opportunities, encouraging associates to continually learn and grow.
We offer various instructor-led and virtual instructor-led programs and maintain a vast curriculum of relevant, on-demand learning and development resources.
+Added: In 2023, we invested a significant amount in human capital development, averaging approximately 28 hours of training and development per associate.
+Added: Over 19% of our U.S.
+Added: workforce participated in our nine business resource groups, which provide associates meaningful opportunities to connect, collaborate and grow.
Health & Wellbeing
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To improve the health and wellbeing of our associates, we offer a comprehensive compensation package, including competitive salaries, a 401(k) plan and medical, dental, vision and disability coverage.
−Removed: In addition, we offer our associates wellness and behavioral programs and tools to help them get and stay healthy and more easily manage their work and personal lives.
+Added: In addition, we offer our associates wellness and behavioral health programs and tools to help them get and stay healthy and more easily manage their work and personal lives.
+Added: In 2023, we formalized our workforce practices and instituted a mixed hybrid, remote and in-office workplace strategy.
+Added: We also foster associate engagement through a variety of activities based in our key office locations.
Information About Our Executive Officers
2 unchanged sentences
Boudreaux 63 President and Chief Executive Officer
−Removed: Gallina 63 Executive Vice President and Chief Financial Officer
+Added: 44 Executive Vice President and Chief Financial Officer
Haytaian 54 Executive Vice President and President, Carelon and CarelonRx
Kendrick, Jr.
−Removed: 57 Executive Vice President and President, Commercial & Specialty Business Division
−Removed: McCarthy 70 Executive Vice President and Chief Administrative Officer
−Removed: Norwood 63 Executive Vice President and President, Government Business Division
−Removed: Todt 55 Executive Vice President and Chief Legal Officer
+Added: 58 Executive Vice President and President, Commercial & Specialty Health Benefits
+Added: 53 Executive Vice President and Chief Digital Information Officer
+Added: Norwood 64 Executive Vice President and President, Government Health Benefits
+Added: Todt 56 Executive Vice President and Chief Legal and Administrative Officer
Penczek 59 Chief Accounting Officer and Controller
7 unchanged sentences
(“Aetna”) (managed healthcare company), including Senior Vice President, Group Insurance.
−Removed: Gallina has served as our Executive Vice President and Chief Financial Officer since 2016.
−Removed: Gallina joined Elevance Health in 1994 and has held a variety of leadership roles across the organization.
−Removed: Prior to his current role, Mr.
−Removed: Gallina served as Elevance Health’s Chief Financial Officer for the Commercial & Specialty Business Division from 2015 to 2016, and as Senior Vice President and Chief Accounting Officer from 2013 to 2015.
−Removed: Other leadership positions held during his tenure include Senior Vice President, Chief Accounting Officer and Chief Risk Officer from 2011 to 2013, while also holding the title of Controller from 2011 to 2013.
−Removed: Before joining the Company, Mr.
−Removed: Gallina spent 12 years with Coopers & Lybrand in various positions, including as an Audit Senior Manager.
+Added: Kaye has served as our Executive Vice President and Chief Financial Officer since November 2023.
+Added: Prior to joining us, he served as the Executive Vice President and Chief Financial Officer of Moody’s Corporation (“Moody’s”) from April 2021 to September 2023, with responsibility for all global finance activities across the company and as Senior Vice President-Chief Financial Officer from August 2018 to April 2021.
+Added: Prior to Moody’s, he served as Senior Vice President and Head of Financial Planning and Analysis at Massachusetts Mutual Life Insurance Company (“MassMutual”) from February 2016 until July 2018, and Chief Financial Officer of MassMutual U.S.
+Added: since July 2015.
+Added: Prior to that, Mr.
+Added: Kaye served as Chief Financial Officer and Senior Vice President, Retirement Solutions, at Voya Financial (formerly ING U.S.) from 2011 to 2015, and Mr.
+Added: Kaye previously held various senior financial and risk reporting positions at ING U.S.
+Added: and ING Group.
+Added: Prior to that, Mr.
+Added: Kaye worked in the investment banking division of Credit Suisse First Boston.
Haytaian has served as our Executive Vice President and President of Carelon (formerly known as our Diversified Business Group) and CarelonRx (formerly known as IngenioRx) since October 2021.
5 unchanged sentences
From 2005 to 2013, Mr.
−Removed: held several leadership positions with Amerigroup, including serving as Chief Executive Officer of the North Region for Amerigroup’s Medicaid business from 2012 until 2013.
+Added: Haytaian held several leadership positions with Amerigroup, including serving as Chief Executive Officer of the North Region for Amerigroup’s Medicaid business from 2012 until 2013.
Haytaian has extensive experience leading Medicare and Medicaid programs with Amerigroup and, prior thereto, with Oxford Health Plans, Inc.
−Removed: Kendrick has served as Executive Vice President and President of our Commercial & Specialty Business Division since October 2021.
+Added: Kendrick has served as our Executive Vice President and President of our Commercial & Specialty Health Benefits since October 2021.
From January 2021 until October 2021, Mr.
1 unchanged sentence
Kendrick joined us in 1995, and has held numerous leadership roles across the organization, including serving as President, Anthem National Accounts/Central Markets from 2015 until January 2021 and President of National Accounts and General Manager for Anthem Blue Cross and Blue Shield of Georgia from 2010 until 2015.
−Removed: McCarthy has served as our Executive Vice President and Chief Administrative Officer since 2013.
−Removed: She was Executive Vice President of Enterprise Execution and Efficiency from 2012 to 2013.
−Removed: Prior to that appointment, she served as Senior Vice President for Operational Excellence from 2008 to 2012, as Senior Vice President of Service Operations from 2006 to 2008 and as Senior Vice President and Chief Operating Officer of our East Region from 2005 to 2006.
−Removed: Prior to our acquisition of WellChoice, Inc.
−Removed: (“WellChoice”) in 2005, Ms.
−Removed: McCarthy served as Executive Vice President and Chief Operating Officer of WellChoice.
−Removed: Norwood has served as our Executive Vice President and President of the Government Business Division since June 2018.
+Added: Lavu joined Elevance Health as our Executive Vice President and Chief Digital Information Officer on February 5, 2024.
+Added: Prior to joining us, he served as Global Chief Digital Information Officer of Nike, Inc.
+Added: (“Nike”) from July 2019 to February 2023.
+Added: Prior to Nike, he served as Chief Technology Officer/CIO of Kohl’s Corporation (“Kohls”) from March 2016 to June 2019, and he previously held other positions with Kohls beginning in 2011, including Executive Vice President, Digital Technology, and Senior Vice President of Digital Innovation.
+Added: Prior to that, Mr.
+Added: Lavu served as Chief Technology Officer at Redbox Automated Retail, LLC from October 2009 to October 2011.
+Added: Norwood has served as our Executive Vice President and President of our Government Health Benefits since June 2018.
Prior to joining us, she was Director of The Department of Healthcare and Family Services for the State of Illinois from 2015 to June 2018.
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Norwood held a variety of leadership roles at Aetna, with her most recent role as President of the Mid-America Region for Aetna from 2010 until 2013.
−Removed: Todt has served as our Executive Vice President and Chief Legal Officer since November 2020 and our interim head of human resources and global security and safety team since January 2022.
+Added: Todt has served as our Executive Vice President and Chief Legal Officer since November 2020 and as our Chief Administration Officer since April 2023.
+Added: Todt also served as our interim head of human resources and global security and safety team from January 2022 until March 2023.
Prior to joining us, Mr.
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We have included our website address throughout this Annual Report on Form 10-K as a textual reference only.
−Removed: The information contained on, or accessible through, our website is not incorporated into this Annual Report on Form 10-K.
+Added: The information contained on, or accessible through, our website is not incorporated into this Annual Report on Form 10-K or any of our other SEC filings.
We make available through our website, free of charge, our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act as soon as reasonably practicable after we electronically file such material with or furnish it to the SEC.
We also include on our website our Corporate Governance Guidelines, our Code of Conduct and the charter of each standing committee of our Board of Directors.
−Removed: In addition, we intend to disclose on our website any amendments to, or waivers from, our Code of Conduct that are required to be publicly disclosed pursuant to rules of the SEC and the New York Stock Exchange (“NYSE”).
+Added: In addition, we intend to disclose on our website any amendments to, or waivers from, our Code of Conduct that are required to be publicly disclosed pursuant to rules of the SEC and the New York Stock Exchange.
Elevance Health, Inc.
1 unchanged sentence
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.