Elevance Health said membership dropped in the second quarter, highlighting the pressure on major insurers as they aim to continue hiking premium rates on Affordable Care Act plans to offset rising government medical costs.

Shares fell 7.8% to $393.50 in premarket trading.

The health insurer said Wednesday that medical membership, a tally of enrollees in its insurance plans, slipped sequentially by 469,000, or 1%, to 44.9 million as of the end of June. The metric was also down 1.5% from the prior year.

The decline was driven by a commercial fee-based customer transition and some attrition in ACA and Medicaid membership, Elevance said.

Medicare Advantage membership dropped 15.9% to 1.9 million members, while Medicaid membership declined 4.3% to 8.4 million.

Rates for many ACA plans rose in the double digits this year, and insurers plan to make similar increases in the year ahead. Insurers say they are dealing with higher healthcare spending and fewer federal subsidies.

In some states, Elevance raised insurance rates as much as 24% and have requested hikes as high as 17% for 2027, according to The Wall Street Journal.

For the fiscal second quarter, which ended in June, Elevance posted a profit of $1.46 billion, or $6.71 a share, compared with $1.74 billion, or $7.72 a share, a year earlier.

Stripping out one-time items, adjusted earnings were $7.45 a share. Analysts polled by FactSet had expected $6.21 a share.

Revenue rose 1.4% to $50.47 billion, compared with estimates of $48.84 billion that Wall Street modeled. Operating revenue, which excludes net investment income and losses on financial instruments, rose less than 1% to $49.83 billion.

Higher premium yields in Elevance's health-benefits segment helped boost sales, while declines in Medicare Advantage, Medicaid and Employer Group risk membership weighed down revenue growth.

The benefit-expense ratio, a closely watched metric that compares health costs with premium revenue, rose to 89.7% from 88.9% a year earlier.

Elevance attributed the higher benefit-expense ratio primarily to improved performance in individual ACA coverage compared with the year before. That was partly offset by an expected increase in medical costs in Elevance's government business.

For the year, the Indianapolis company expects adjusted earnings of at least $27 a share. Analysts currently expect adjusted earnings of $26.87 a share.

The outlook marks a guidance increase by Elevance. The company is also raising its targeted investments in medical-cost management, member experience and provider connectivity.

These updates reinforce management's confidence in meeting its goal to return at least 12% adjusted earnings-per-share growth in 2027, compared with 2026, Chief Executive Gail Boudreaux said.

Write to Katherine Hamilton at katherine.hamilton@wsj.com

(END) Dow Jones Newswires

July 15, 2026 07:37 ET (11:37 GMT)

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