Elevance will no longer provide group Medicare Advantage coverage to the retirees of the city of New York City amid ongoing litigation over the switch to privatized plans.
Elevance CEO Gail Boudreaux told investors during a second quarter earnings call Wednesday the insurer "needed greater certainty" in order to continue with the contract amid delays and litigation. The contract represented about $2.5 billion in annual premium revenue, Cowen analyst Gary Taylor said in a Wednesday note.
Elevance, which does business as Empire BlueCross BlueShield in New York, said that delaying any further would not give retirees enough time to understand their benefit options ahead of open enrollment.
"Given the level of uncertainty at this time, we informed the city that Empire BlueCross BlueShield is not able to participate in offering the NYC Medicare Advantage Plus Plan," according to a statement.
Elevance, formerly known as Anthem, was awarded the contract last year in partnership with EmblemHealth to provide Medicare Advantage group coverage to about 200,000 retirees. At the time, Boudreaux characterized it as "one of the largest public procurements for group Medicare in the last decade."
Boudreaux said on a 2021 investor call that the deal would significantly increase the insurer's Medicare Advantage business as well as the company's market share in New York.
Retirees sued to stop the benefits change. A judge partially sided with the retirees in March, allowing the transition to continue while also allowing retirees to maintain their current plan if they so choose, according to a report from news outlet The City.