Research · Sep 3, 2026
[ELV] Elevance Health Thesis 2026: Carelon Scaling Tests Vertical Integration vs UNH Optum Playbook
Elevance Health FY2025 revenue ~$177B (+3-5%) with adj. EPS ~$33.85 reflecting operational stabilization through multi-year Medicaid redetermination unwinding (membership ~33M FY2023 peak → ~28M FY2025 = ~5M cumulative reduction; revenue impact ~$5-10B from peak). Carelon Services gross revenue reached ~$50B (FY2022 $30B → FY2025 $50B = 67% growth) — strategic vertical integration playbook similar to UnitedHealth Optum but at smaller scale. BCBS licensee structural advantage in 14 states. FY2026 thesis: Medicaid stabilizes (redetermination substantially complete); Medicare Advantage Stars rating recovery for FY2027 contract year supports reimbursement; Carelon scaling toward $70-80B FY2027 strategic vision; key risks: PBM regulation affecting Carelon Rx, Medicare Advantage payment policy compression, Medicaid state contract competitive intensity.