Elevance Shores Up Medicare Advantage Business with IU Health Plans Acquistion

The payer is tightening its grasp on the MA market in the Hoosier State.

Elevance Health is upping its investment in Medicare Advantage through its latest deal.

The insurer has reached a deal to acquire Indiana University Health Plans, IU Health’s insurance business, to expand its MA presence in the state and grow the profitability of its private program offering.

IU Health Plans provides MA plans to 19,000 members in 36 counties, in addition to serving 12,000 commercial plans members, according to the announcement.

The acquisition, which is expected to be completed at the end of the year, would result in IU Health Plans operating as part of Elevance’s Anthem Blue Cross and Blue Shield in Indiana.

"Acquiring IU Health Plans reflects our dedication to elevating quality and expanding our product offerings," Dave Mull, Medicare market president of Anthem Blue Cross and Blue Shield in Indiana, said in a statement. "This strategic step aligns with our health equity goals, providing comprehensive access to high-quality care and timely interventions. Through this purchase, we are strengthening our efforts to cultivate healthier communities and improve health outcomes for those we are privileged to serve.”

Elevance downgraded its long-term guidance for its health insurance unit in its second quarter earnings, largely driven by dwindling membership from Medicaid redeterminations and uncertain MA bids for 2025.

Despite seeing membership drop 4.6% and contending with revisions to the MA risk model, Elevance still profited $2.3 billion for the quarter.

Now, as some insurers are scaling back their MA offerings and exiting markets, Elevance is continuing to pour resources into that side of the business.

“It's an incredibly dynamic time in Medicare Advantage and now more than ever, we think it's important to be very thoughtful and rational as we plan for 2025,” Felicia Norwood, executive vice president and president for Elevance’s Government Health Benefits, told investors in the second quarter earnings call. “Despite this environment, Medicare Advantage enrollment is at an all-time high and over 50% of individuals are still choosing MA. That means there's still a clear value for what MA offers and we're committed in the long term to having and operating a profitable and sustainable MA business.”