Elevance to Exit Standalone Medicare Drug Plans, Trim Medicare Advantage Footprint

The move will affect approximately 150,000 individual and group MA members, as well as about 400,000 standalone Part D enrollees.

Elevance is reducing its Medicare business, exiting certain Medicare Advantage (MA) plans, and fully discontinuing standalone Medicare Part D coverage in 2025. The move will affect approximately 150,000 individual and group MA members, as well as about 400,000 standalone Part D enrollees.

Mark Kaye, Chief Financial Officer of Elevance, said the insurer is leaving markets where “long-term economics are not sustainable.” He added the decision was “not made lightly” but should place the business on firmer ground heading into next year.

Focus on MA and Dual-Eligible Plans

The company will prioritize Medicare Advantage and dual special needs plans (D-SNPs), which cover people eligible for both Medicare and Medicaid. According to Kaye, “That decision does not reflect our underperformance or a broader Part D cost concern. We’re simply focusing resources where we can deliver the greatest impact.”

Kaye noted that Elevance’s broad Medicaid footprint positions the company for growth as rules finalized by the Centers for Medicare & Medicaid Services (CMS) move dual-eligible members into single plans operated by their Medicaid insurer.

The exits come as insurers face rising costs in Medicare Advantage and policy shifts reducing reimbursements. Other payers, including UnitedHealthcare, have also announced plan exits to manage costs. Elevance is prioritizing health maintenance organization (HMO) plans with narrower networks to better control spending.

In addition, Elevance recently lost its legal challenge to improve 2025 star ratings, which directly impact Medicare revenue. The outcome is expected to cost the company $375 million next year.

Despite these changes, Elevance reaffirmed its 2025 guidance but cautioned that Medicaid margins are not expected to improve in the latter half of the year, reversing earlier expectations.

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