Key company profiles: Elevance's approach to vertical integration

Today's post is the fifth in an ongoing series we're publishing on key players in healthcare vertical consolidation. Nearly everyone in healthcare comes into contact with these players. Often, in fact. They are your customers, your acquirers, your competitors. But in many people's minds, they often occupy that same paradoxical space as the U.S. government: simultaneously omnipotent and incompetent, against whom resistance is futile, and yet also lumbering and inflexible. But does that paradox reflect reality? This series aims to show these giants for what they are—where they are true juggernauts and where they are paper tigers. This post will cover Elevance's approach to vertical integration.

This case profile, as with all others in the series, is broken down into five parts—and you can use the links below to advance directly to any section(s) of interest:

Topline summary: Summary of each organization’s current approach to vertical consolidation
Org structure: Major business units and revenue lines, including notable (non-exhaustive) brands within each
Recent news: Major organizational developments (related to vertical consolidation) as of the time of publication
Union's analysis: Our read on the type of strategies most at work within each org (portfolio, flywheel, platform). For background on this, read our previous blog post on vertical consolidation.
Open questions: What to watch for in the coming months and years; developments that could shift our take

Topline summary: Elevance's approach to vertical integration

A later player to the vertical consolidation game, Elevance remains primarily an insurance business. The company is investing heavily in specialty pharmacy and provider services—the fastest-growing portions of its business—in an attempt to catch up to rivals like UHG and CVS. But lack of overlap between its plan (heavily commercial) and provider (MA-focused) assets means it will face an uphill climb to embracing either an effective flywheel or platform strategy in the near term.

Org structure: Elevance Health

Like many of the other large vertical conglomerates, Elevance Health went through a rebranding recently, changing from Anthem to Elevance back in 2022. The organization currently ranks 20th on the Fortune 500 (sorted by revenue).

Elevance is the single largest corporation within the Blue Cross Blue Shield Association, and Elevance itself encompasses multiple different health insurance brand and subsidiaries. Aggregate enrollment across all of these brands positions Elevance as second only to UnitedHealthcare in enrollment numbers.

Moreso than the other big national insurers, Elevance until relatively recently operated as a set of disparate brands across different states. With its rebranding, the organization is now making a more concerted push to unify and streamline its branding.

Currently, the organization operates Blues plans (largely commercial) in 14 states. Meanwhile, the Wellpoint brand is primarily being deployed for Elevance's government-sponsored (Medicaid and MA) offerings—those are offered in six states.

Alongside the rebrand to Elevance in 2022, the company also launched the Carelon brand. Like UnitedHealth Group's Optum and CVS Health's Healthspire, Carelon is a singular brand encompassing the organization's non-insurance offerings.

As of 2025, Carelon pales in size relative to the insurance business, most notably because Elevance’s PBM, CarelonRX, is a start-up player that only began providing services in 2019. This is in stark contrast to UHG and CVS, who have large, mature, incumbent PBM businesses (and which were already large when they were acquired)..

Similar to both UHG and CVS, Elevance also has provider services, tech/IT, and consulting services. Its CarelonHealth provider arm includes CareMore Health, a well-established brand for providing value-based insurance and provider services for Medicare and Medicaid patients.

Recent news: Developments in Elevance's approach to vertical integration

Examining major developments for Elevance across the past year and half reveals a few things.

The first is a bit of a mixed track record when it comes to horizontal consolidation within the health insurance segment. Elevance and Blue Cross Blue Shield of Lousiana have tried twice in recent years to merge, only to call off the deal due to pushback from regulators. This sort of pushback is a big part of the reason large healthcare companies such as Elevance have increasingly opted to grow vertically: with organic growth insufficient for meeting shareholder expectations and horizontal growth becoming more difficult to come by, the only way to go is up and down the value chain, or in tangential business segments. Still, the case of Elevance does demonstrate that there is still some room to grow horizontally, especially when the acquisition targets are not regionally dominant. Elevance's acquisition of IU Health Plans is a notable example.
When it comes to where Elevance is placing its bets vertically, recent deals point to a a clear and growing interest in the specialty pharmacy market—which is unsurprising, given that specialty pharmacy is the one place in the pharmacy value chain that’s seeing more tailwinds than headwinds (in contrast to the retail pharmacy and PBM businesses).
Elevance also appears to be making a concerted effort to double-down on primary care, even as some of the other major investors in this space have pulled back recently.

Union's analysis: Our read on Elevance's approach to vertical consolidation

Portfolio strategy: Limited (but growing) emphasis

Despite clear, recent attempts to diversify into other areas, ultimately Elevance is still less diversified today relative to the other players we've featured in this series—most certainly relative to UHG and CVS. The vast majority of its revenue—nearly 90%—still flows through its insurance segment, but we do obviously see commitment and effort to grow the non-insurance business, especially the PBM, specialty pharmacy, and to a lesser extent, the primary care business.

Flywheel strategy: Limited emphasis

Because the portfolio is less diversified, there are fewer potential flywheels for Elevance to build. The provider and plan arms represent a potential flywheel, but because the insurance business tilts so heavily commercial, while the provider business tilts much more heavily toward MA, any existing flywheels will de-facto be somewhat limited in nature.

The other potential flywheel here is the PBM-to-plan flywheel—a heavy emphasis of competitors such as UHG. But again, the relatively small size of the PBM means that will need to be built up over time.

Platform strategy: Very limited emphasis

Elevance does have some elements of a platform strategy, specifically through what used to be the CareMore brand. A platform approach was core to CareMore’s value proposition well before the organization became part of the Anthem/Elevance family. Outside of CareMore products, Elevance’s approach to narrow networks appears to be focused more on narrowing access at the hospital level, as opposed to designing insurance products that are centered on the Carelon Health primary care network—likely because that network isn’t really big enough today to pull that off outside of the legacy CareMore offerings.

Open questions about Elevance's approach to vertical integration

MA strategy: Like other insurers, Elevance held from significantly growing its MA membership across 2024. But the organization appears to be the exception to the rule when it comes to expectations for 2025, during which Elevance is aiming to grow its MA portfolio by 7-9%. How much of this is an attempt to establish a more effective flywheel with its provider arm?
PBM strategy: As a newer player, Elevance’s PBM, CarelonRx, lags far behind the large PBMs owned by other plans and retailers. Will the growing scrutiny on those large players provide an opportunity for CarelonRx to challenge the incumbents alongside the growing number of start up PBM disruptors?

Parting thoughts: Elevance's

Elevance is still primarily an insurance company, and continues to find paths to horizontal consolidation in order to grow its insurance arm.
It is a bit late to the game on its portfolio/diversification strategy, and appears to be trying to cobble together an asset mix to compete quite quickly.
In particular, Elevance appears to be making some concerted effort to invest in services that not only serve as a hedge against the insurance business, but that strategically position Elevance to embrace more of a flywheel strategy.
The lack of a large PBM clearly separates Elevance from other major vertical conglomerates—it remains to be seen whether this will be a persistent weakness, or a potential strength given the headwinds on that segment of the industry.

Want more on vertical integration?

Read our blog post on the various forms that vertical consolidation can take
Review our profile of UnitedHealth Group's approach to vertical consolidation
Review our profile of CVS Health's approach to vertical consolidation
Review our profile of Cencora's approach to vertical consolidation.
Review our profile of Kaiser's approach to vertical consolidation.
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