Elevance Health (ELV) 25 Jul 182018 Q2 Earnings call transcript

Ladies and gentlemen, thank you for standing by, and welcome to the Anthem Second Quarter Results Conference Call. At this time, all lines are in a listen-only mode. Later, there will be a question-and-answer session; instructions will be given at that time.

As a reminder, this conference is being recorded. I would now like to turn the conference over to the company's management. ahead. go Please

commentary and an around welcome Business This will discuss overview and Division. in focus Relations, second John XXXX Government of Gail our begin Boudreaux, quarter with Pete results, over our the go Good President and followed by Haytaian, Chris to priorities. Felicia Rigg, financial Business call. of President updated Gail detail greater are is this and by and Investor our John Vice earnings Gallina, us CFO; Specialty of our morning, execution Commercial XXXX giving our second on metrics growth our morning Anthem's outlook. quarter our CEO; call Division; and our key enterprise-wide President and financial then President of Norwood, will

will Q&A. then for be We available

reference antheminc.com. we to are measures. During at website the will directly of measures available comparable most the certain GAAP measures these our non-GAAP non-GAAP call, on Reconciliations

the advise to some many We uncertainties, materially are the I our over differ Anthem. subject and with and to will risks generally risk also be results predict difficult to certain and actual can will statements cause These to call current forward-looking all expectations. statements now that to of the these Gail. cautioned uncertainties beyond this carefully discussed today's SEC. from which our are press filings in quarterly are Listeners We in listeners turn of factors control the review release and call. on risks making

share $X.XX expectations. are $X.XX, we call. share per GAAP second you and quarter morning, XXXX adjusted for which earnings of us earnings per quarter second Thank Anthem's of everyone. Good earnings reported ahead Today, for joining of XXXX

our Medicaid to continued clinical a offset enterprise. second attributable efforts than second quarter to by the not in Medicaid operating self-funded businesses. results by the do yet that due sales business our our the that sequentially Service in reduction was quarter inconsistent with grew our in Anthem's XXX,XXX our and our improve business. in within Commercial ongoing in quarter the was result across to more by improvement. Membership Individual lives, prior our Commercial eligibility programs of both to the remain X.X% are book. year declined billion. reflect operating planned to up, reduction revenue by efforts $XX.X TANF The declines membership expectations The to results headwinds a driven our redetermination over engagement growth to Our Government revenue in second of direct The states. and expected was commitment economy of execution presented improving initiatives consumer-centric revenue our increase drive members improve in decrease quarter fee due an reflect and

Our overall XX.X%, normalized ratio slightly focus medical solid of cost members was managing than down performance. cost quarter insurer on another for our of year-to-year fee. medical health the the second health in and the quarter when resulted expectations Anthem's better in

at of expectations favorable to with XX.X%, margin ratio second line SG&A Our leading quarter in operating X.X%. was a

on on expect we with Further, outlook, members continued business, earnings raising segment trusted execution. on to half our the our XXXX forward In increase our XX% full share performance, continuously sales balance strategy first and of to a the carry our adjusted than Commercial per greater we year providing our momentum solutions. exhibited to remain from XXXX our half increased our build we strong focus are financial XXXX. the of Turning outlook in to the we first $XX.XX, to focused caring while revenue Based positive year. growth, accelerating

plan our the have noted, employer their and designs a did for fee we to insurer to quickly pivot for catalyst needs. the flexible enough health we was move not shop of reinstitution previously partners As to

across example use consumers broker and focused enables and structure more in Online, states, our care partnership, providers and plan U.S. Samsung place sales Well. and for XXXX a is with are the increasing based our partnership with now deployment, to for days beyond choice building Leadership strategy to announced of and board-certified seven new Anthem wide we day, product is growth training medical effective Samsung speed a hours consistent an LiveHealth American of care Our XX week. this while market. Health on affiliated momentum XX intensely can the market. non-emergency by with and which recently for consumers allowing connects this health our in agility and app and health service local a variety flexibility in Through An access

expect in We into membership retention growth move we momentum and growing as to XXXX. see

signs Although seeing are selling the XXXX is account capabilities Anthem's national are underway, season that we resonating. clinical still integrated

the pre-tax believe Our we environment rational. remain segment targets unchanged. segment pricing Overall, margin strategies are the our in disciplined is pricing and Commercial

and serving drive Department Government Director In Government and division. Turning Norwood apply persistent announced Family years growth appointed care we Services. over as the Illinois' to able of this has valuable President. and her business, will of to our health be insight XX experience Healthcare been experience in the government role, of commercial Felicia to our has was and that Felicia recently Felicia most recently

our Xst over acquisition scaled the seven last Medicare the with significantly Choice. have months and We HealthSun of platform America's

double-digit for in We both we XX% near-term. given As have share expansions in means submitted industry. plans, stars profitability. capital-efficient Acquisitions of five in balance five-Star been the But key star growth most is membership and plans strategy. growth between to Medicare planned Approximately adjacent our ahead, in our profile, or present element retention. continue growth over a bids and the membership we mind increase the and four our recently our rated market higher gains we have county of that Advantage and margin to a most we our with reach look this membership remains seek XXXX will mid organic believe

both population. growth in non-dual and Medicare targeting are dual the We

However, Medicaid Enhanced provider industry-leading platform because we uniquely dual needs Personal is initiatives our Health serve like medically believe the eligible complex Care. of of and positioned our to Anthem the population collaboration

increase are meaningfully competitive deeper the has We get area, our Medicare group our the with give but Anthem's as group this that market our MA brand unmatched in a can growth and source for near-term expect go Star where an largest scores and resides share. opportunity is we certain county Commercial in been look untapped community-based trusted ability of uncompetitive we to we operate. programs footprint but in we in existing and our the aggregate, business The in are stronger growth and currently to feel advantage. XXXX, we improved regions Advantage innovative arrangements us integrated poised in clinical Anthem historically ahead, increase segment. we and Combined market significant

that value with the brands, As an wins we are our group confident to most group recent IngenioRx support proposition XXXX. we improved bring Several beginning value optimism. trusted consumer retiree the only proposition a will in improve Medicare segment, one of that

$XX Awards, program. In note, segment, end We of the Platinum can Medicaid statewide of expect received needs Early off quarter, enrollment than awarded a more and suggest a quarter. our were to were half largely continue Case XXXX, at group MA serving years, to in growth success higher members back billion over business which during the base the also the we most population. indicators by HIV this into see year. and the the the two acuity the second of five second specialty management Point of double be sustained serve that we population. pipeline next XX,XXX contract proud recently case of to next will Florida's albeit successful announce We Of a we innovative recognize in

Homeless Days solutions, Program care Health and won Case health each Program respective Clinic categories. Behavioral Management Our their Diabetic

serve expected fourth live Blue Shield Our of and quarter XXXX dual-eligible is go the Medicaid Minnesota partnership with and of Blue members. to Cross XXX,XXX in

ahead Looking expansion quarter opportunity XXX,XXX Medicaid serve portion the of are encouraged of to the the Virginia a population. XXXX, to by also we first

network serious furthering professionals interdisciplinary capabilities quarter, the of of that home During we Health, for a illness. medical the skilled provide care the with second facing Aspire clinical through completed in our a patients acquisition comprehensive

states. serves across currently health Aspire XX XX more plans than

the the least XX% in XXXX. Additionally, $X feel of savings we our are saving expect target bottom progress gross ahead the pleased IngenioRx at X, line. We of through launch January flow our and on our of planning of integration prudent billion with to is annually to

over call to thoughts I the passing some Before about offer like future. to our high-level John, would

affordable deep gain confident that drive Anthem asked that As is market the to to a business well-positioned of key I'm and share surprised is solutions and am joining competitive ability answer and Anthem. our impressed often segments. depth network I And pharmacy in clinical since the our market me strength my most I breadth local disadvantage. what by our landscape, a and has to capabilities, power look is our extremely I'm the significant of testament of our the company engagement. This despite across

strategy ahead, over our care is a effective performance The an second as With maximization. see we members, predicated on we balance our position and on that inflation manage XXXX of The cost care of pass objectives. the for potential both opportunities burden about and health in guidance. excited Looking consumer rollout gap the the our we're call excited to XXXX the updated point review for importance to medical to class of in our John about quarter and responsive the the better customers. current a detailed solutions IngenioRx we're improved paramount in most and best the inflection efficient bridge offering. approach overall as rebate cost and more bringing conclude, pharmacy that, PBM not a clinically is pharmacy financial for built XXXX XXXX opportunities of of our foundation XXXX, the solutions the greatly of we align and Anthem to our is To financially with I'll growth to

Thank and good Gail, morning. you,

second members of million was is individual membership second quarter. Medicare, The X.X% the a XXXX. we the billion, in GAAP comes growth HealthSun the growth stated, in our of of share to results driven X.X%, members with of Xst strong As the the despite share a which $X.XX declines in bringing increases cover to during in acquisitions the Enrollment Fully the revenue by year reduce quarter health per addition Operating attrition an XX.X in America's The financial by of were XX,XXX lives. Medicaid to Fully of quarter adjusted Gail decreased rate business. and by by in our result growth grew and return prior largely organic revenue members. in XXXX. membership Choice, individual operating in continued in premium insurance insured our XX% sequentially, decision per and ACA enrollment the has $X.XX. revenue tax Individual of increase quarter $XX.X XXX,XXX XXX,XXX earnings versus earnings offset insured declines declined our to footprint, or partially decline by which approximately in quarter, voluntary end since resulted reported total

medical by was primarily points decline XX.X% prior the a Our quarter, decrease insurance was loss the for second reinstitution in year from XXXX. of the tax XXX The basis quarter. health ratio driven the of

However, Government our and Commercial the cost improvement of medical strong result in medical our seen loss ratio performance improved lines as strong results a across is of businesses. gross margin multiple This further our in businesses. both

programs improve our to of arrangements. overall our to the basis the through expect cost the Based or continue performance various as Our the on initiatives X%, we success care our range in plus and of local results in our quarter medical trend points. care and group innovative clinical to total value-based care to XX commitment of reflect minus management cost be insured our such date,

investment in future the increased quarter XXXX to quarter offset by spend points ratio related fund in SG&A attack XX.X% in tax of of in recorded which was partially our settlement growth, XXX the the insurance by of health XXXX. return XXXX basis addition of expense the XXXX. cyber to the increase mentioned, an the second to to the is Gail second second As The was increase quarter, relative driven

growth in initiatives will Looking the prioritize enterprise. continue ahead, across to spending we investment

sheet. balance the to Turning

$XXX been has of We approximately a claims XXXX, medical our our expectations. payable the forward of six practice, As in million slightly have of roll morning's press favorable of balance first our for year experienced prior ahead this reserve we months release. included development

of include a average for range. high the remain claims our Xst was cycle deviation our of XXXX. impact the believe the decrease days Days first of on balances to was by and days quarter, June line on The target. of the faster single digit payable claims by Our improving reserves America's in consistent we to our XX.X our reserve payable Choice as payment and And strong XX, focus systems, ultimately mid claims timing X.X in XXs in second days the and claims quarter processing continue with sequentially to provision decreasing metric. driven acquisition high times, in the leading in

to cap of and decrease to quarter. compared which originally a issued by reduction was XXXX, was our June units, XX, as basis conversion well as the $X.XX primarily debt were of in billion The modest Our points early ratio XX.X% of as driven equity XXXX decrease of the short-term borrowings. of XXX May, a matured in first

is line a and range targeted in sustainable ratio our cap to is with debt at Our level.

million stock per we X.X of share, common shares of approximately a million. During $XXX.XX quarter, totaling $XXX the second price repurchased average at weighted

for dividend. quarter our distributed addition, In the during we cash $XXX million

dividend per third our As of a quarter approved $X.XX of audit yesterday, share. committee

quarter Taken Operating million was billion cash the the together, second approximately the versus in and in quarter. parent ended $XXX company. year flow prior quarter, cash $XXX in $X.X at the with we up million investments

first the was months expectations. For times income and with flow or operating six approximately $X.X line of X.X in our XXXX, is net billion cash

now for to year. XX.X the year, the end XX.X of to the in the be insured our outlook enrollment the of ahead fully range of to by expect Looking million remainder members million we

due Medicaid guidance. now greater the continues of XX.X Our outlook at in million XX.X expect total, in in half organic and membership the XXX,XXX previously quarter to decline XX.X is business. for and end the within In second business. XXX,XXX be group growth to of membership the membership in approximately prior the wins modest Medicare XXXX, revised Self-funded XXXX. the remainder In second noted of Minnesota, the million outlook million a range expected medical of Advantage projected members into include XX.X than of the the membership retiree down the our to insured takes range year midpoint, gains unchanged outlook consideration our to lives, we to recent to more growth trends members, million fully from in

As Gail and segment through the business. our focused the building remain positive momentum mentioned, sales Commercial heading into we strategy improving in on execution XXXX,

units be to track is SG&A of XXX XXX effective shares. largely to in conversion which to with the in million cost tax rate ratio estimate to line medical count range shares previously. first XXX the unchanged the diluted to guidance our XX.X% our shares, would up May, share Our range a the in and equity count million X increased due our of as of XX.X% from XXX line, by million Below million we results the expectations. XX.X% our the our half We to share million XX.X% narrowed from

adjustments. interest investment income partially our and due increased we rate the share yields, offsetting higher guidance $XX short-term tax by count the rate Finally, million to

I'll And full over answers. Taken now XXXX to questions together and with the operator greater expect to $XX.XX. reflecting be that, than year we for cost earnings our and strong the turn performance, adjusted per share year-to-date call medical

the comes Wilkes line question Bernstein. ahead. from of Sanford Please Lance first with go our And

morning. I the the wanted cross-selling little bit on self-insured just earnings Good progress and overall the a you're in Yeah. of ask kind having getting up to block.

cross-selling but kind and member? service noted of could far, the But little fee revenues per progress You'd up overall thus if for making of up. being strategies you're driving bit your kind about really earnings talk you a

morning, Good Thank you question. for Lance. the

Haytaian in Structure, particular, couple to not as business a because of We've pleased in and some leads to to that we're areas, our quarter we well specialty that the had terms segments. area, a well seeing ask come expect progress were seeing we rate Pete of progress our a on part to see well. through lot the clinical some nice insight, our of is around second you're an that penetration as and place as in that specific the of individual of seen so areas. of life. give of tied leadership actually business, would dental so let going in talent you focus focus as the structures of you been revenue. we self-funded – to around are it's couple very in added area that of I'm specialty, little that adding of of we Again, in first our in specialty. bit have but we're our a those but a of of put terms programs our Part we've sales to overall the additional momentum. terms as A bit But Pete products and as have ask ongoing down, In a what color is as strategies, with give saw you me making more little who that some in

with Yeah, agree I everything thanks that the Gail question. for said.

a have penetration to tremendous specialty respect opportunity we with think I improving our rates.

As we we and opportunity tremendous there's as competition, to the that. just to have said before, performing are well improve relative not

of is what really Gail important investment organization. and it with and the segment the is into point our most then place the the making specialty building a and we're and for right how confident we sense products the our talent; that on infrastructure lot said market. sales down hired in pricing we've making think and that so the have in feel out We strategy now we're where sure connects this, focus services the it's has that a very makes I driving

we're be and for more improvements focused providing tools upsell. very to to from the on to effectively perspective and broker addition able engagements that, a In brokers

are we progress a sell and that really seeing opportunity products there's specialty our clinical and programs book continue our regard. to think we in existing to So into tremendous good

question, Next please.

Rice Thanks. (USA) our Suisse. Hi, of can quarters look the I'm having now, Please go A.J. start Rice and two Credit ahead. everybody. Suisse focused belt, the MLR particularly on we from first line with outlook. LLC - half second Maybe, Securities A.J. versus at half to Credit is Next under

While and you're at XXX basis maintaining back in points half low versus by range XXX the points that, the end the range. the high that implies half first a about at of pick basis MLR up the end of

Moving – Individual half might why ramp back year, to to guess, were of there basis there we'd to year, pick I ramp about seasonal half a in looked of half XXX back you would decline last has or second the the back at MLR the with are point first in business, some in which that the just points. the that in up conservative, Is less. thought significant? are probably be being year things the half we the look and

thank for Hi. Good and the you morning, A.J., question.

growth the mix pattern seasonality Xst all have acquired February, organic indicated of the in is fact those look issues reduced essentially Individual a that we knows, associated quarter-by-quarter that year-over-year all footprint those as insured the XX% lives Choice America's seasonality clearly your what at basis. business, you a question, advantage trajectory on different of MLR As the back overall of had we marketplace had. you Advantage changing our and acquired adding from you the we slightly December, and the terms question in Anyway, with along everyone over ago a and in Medicare we year if in HealthSun double-digit answered our business, the in that with our Medicare by ACA-compliant just fully we

out, things the is all marketplace. combined, those as you Individual the So single factor, but pointed it's biggest

Next question, please.

Gupte of Line please go Partners, with Leerink ahead. Ana

about book share on you I where players come in and United I'm business, from fully it's Is have fully it are core book nicely growth your and or will from. market likely they really not large Good thanks. Cigna stay market. and more is which the from you Commercial if nationals margins, insured, Commercial come taking the players? on was it the Gail, insured to or like morning. is then where and Hey, the of from sure its it smaller that Commercial And will fully like the The turnaround Peter talked leading, insured are overall? your in share will expanded margins Aetna the the been and mix curious underwriting or that also, questions they've

and Thanks for start number Pete again, me I'll bit of and, in share color. questions the There's question, to little there Ana. a more let a ask

of terms start our organization a made Commercial I the say, But hold, in those implement. over a growth, markets and quarters. have next we of different. as of each to very we is First few I Those number to bit time as changes of shared, expect our taking take of would inside little

would you small execution, story sales you see we and in we that board improvements XX Commercial the focus operate markets, improved large as value markets Our the groups. in tell expect I because on across our to know, of and

each they of In terms competitors, different markets. our of which specific all are in

not specific going differentially, point versus market. compete each small in I'm different and because So, to for Individual competitors group example, we one a to in

staying to fully we disciplined Overall, in also that margin our of are question. margins, well pricing, as start your very focus of our with We on self-funded. inside terms buy-ups have as a insured so let me had

the that stay have our very the shared of question overall with we've But things you helped on pricing, also Some first margins. disciplined. drive I

a into share with some some that one offerings, of ask expect the we see I of Pete very the to maybe on the me strategies of to areas the focused some additional that and have are different and had because we going to that. think we've marketplace improvement. into But insight that, product consistent underwriting that let continue is function some always and

against Ana, more about, question. on doing specific strategy. and first we're was question progress To thanks your our Yeah, for the think be how I

it put the following So, categories. I in

are much and leadership we on right over that we First, think of days. a that the XX good ensuring we path with completed last very focused have segments, in each to segment respect the one I the we're down really strategy, and the

but strong downstream large products been and We've much in be point Gail able having options. and I more that that, of leadership both to to back The very We've agile. that our that also in coordinated that markets, organization. addition centers the them that sales excellence, there has also execution, regard the appropriate In on other organizations. lot infrastructure and done hired building of execution for centralized the with a call in focused reporting the made here need made. we with agile, to be agile expeditious offer with connect networks And infrastructure that's an to product the progress underwriting, products, respect with is to point We then to the right in a way. building respect to and those services need more and more

how And on seeing allowing the good digital that really it to We're brokers effectively. modularization, in able but then respect And good engaging so brokers. to also we're we build say more through effectively efficiently, how way seeing choices and and products then we we're before, products, progress on the brokers. the capabilities do progress of building to products but employers out. really are internally, with and products marketplace product so we're really is I'd and networks I chosen more being that manufacturing we're how and concept call with mentioned how make in it servicing finally, this

taken to the degree. tools focused that execution they're in enabling for and better greater we've services that them a centralizing utilizing to really the and and So that marketplace and then a better on out degree

good seeing we're So, all that, progress. really

half back the in momentum see we'll think year. the of I

And going we retiree bit some this and I proof business. little that is I at what mean, all a think of, the that to segment. think look earlier. you, a group as we've you've segment continue sales point sort where with started we're see I reasonable July nice in to in that momentum a seen, had we when done is

segments the the representative in in of we'll see that's hopefully So what other near-term.

think Pete's the we're you going from a comprehensive nice it's see each to Thank execution some focus And, obviously, comments, of see around Ana, so, on think we momentum. pretty and I you. can levers

please. Next question,

The with go line Research, please Wolfe ahead. Lake of Justin

Medicare And earnings give there at original revert lower Thanks. you of should driving from some color exchanges some you run increased guidance, tax in bps, Advantage. new midpoint rate in curious Good sneak looking the at a is the hoping John, perspective accounting, a morning. the the is all its and whether then, footprint or company being could us if is us on in I by color back the tax Was rate tax given one on XX rate the give how which Thanks. upside more, hoping equal, you XXXX the given can with business this in the what's be so XXXX the should and rate? driving deductibility this more core to could things

Justin. Thanks,

and begin I'll to John. me Let it turn over then

think think slipped I Advantage so Medicare asked about around couple exchanges address you footprint. I know individual questions a to I you both. try and in too, I'll

the of individual the – makes think job a think markets are of we not do on we've the team first year First very foremost, it exchanges, identifying and we and presence to rescale stable pleased we sense, and where the done has but we excellent where participation that. that are looking business, results our with I the an we've got had this And offering.

while XXXX, yet, we As we are into no go are assessing that. final decisions

more the with on this around solid. focused performance. year, year so are pleased the been marketplace. you'll major expansions, again, it think that is more I a this But think all not certainty some we've that rescaling, was again, and areas county but we about I And see stability but

the in shared that do that, strong. comments, go can very that is book we We we're won't in. deeper I competitive. feel XXXX we MA as taken on a really the of going because numbers market We think I Advantage we have that our grow We and business approach. the we opening market into think feel expansion. the Medicare into some have that's geographic marketplace, balanced my of terms in reconstructed have In

your very feel comment and and guidance to on in question. ask good the We stability With year's assets the However, our do industry growth rates. quality will strong will grow that that come our deeper that from markets. have penetration do the of feel us. we with I'll this gave second positioning that, we that John we we above And about think our benefits flexibility

Yeah, you, Justin, good Gail, morning. and, thank

the tax we up at guidance of taking terms the by the In basically lower midpoint did the raise of end the rate, range.

for within still quarter higher the provided, our year, tax to that range Our to we approach the very tax planning. rate at guidance proactive in end. provided in certainly of the although the We're we the is closer of terms beginning the

tax municipalities income where into where to are, relative the that make factors peer our low Our tax. money? in are our of is terms rate But Some group. go multiple premium in we rate terms of are there's some do still tax, we

money the on where tax earned can rate. So the is based change

We like primary terms fine-tuning impacts that, the the differences have things, adjustments on tax in HIF, the of rate. and impacts

we've We rate refined very that XXXX, these think out the regards insurer in the we is XXXX. laid then goes health to appropriate fee have XXXX, So all And away. for there things. tax

we all effective increases that's know, fee which a As rate the non-deductible tax significantly.

tax be now. So statutory effective closer to it the than will our rate tax much is rate in XXXX,

please. Next question,

It's line of BMO Capital from ahead. the Matt with Please Borsch Markets. go

opportunity two the opportunity if together maybe that it do along you Advantage you're retiree just I traction about together, the pointed untapped or come lightly if Good Hi. Yes. was tapped with hoping the relates group together? you and might Medicare come how that those could they to, morning. talk pursuing, – group

thank Well, question. the you Sure. for

few system. we at the and across a that shared historically think we Medicare invested under I I early market quite really As had group Anthem in is Blue both minutes ago, frankly that a identified

stay very brand that business. that performance, over improved community. a pipeline attention in improving MA really operational in putting who to And We business, that book into. lead traction very business, group strong customers understands have and in Plus think that the we're of an have turned begun over MA team individual our retiree this our group particularly gain a want have We MA four our the Blue. leadership to commercial feel segment then the individual put performance, year. our we to having business that Stars our resonates we team experienced obviously Star to recruited we As years to well plus we last few able plan last that the of

ability and infrastructure, that those service really assets support scaled our a about that we've of growth memberships. business, we we'll strong very we're We've good – think that of in and ability to and to the traction pipeline And you – convert brand, those we use beyond. to our seen as the So to of elements, able about opportunities now some our our able some those rather, found feel be some continue seen CareMore XXXX that that XXXX. groups already into

XX known And about bullish very that's customers invested I again, past. of their group we we're many had because XX, lives. in them a throughout pipeline we under that it's wonderful in And have we've So mean, just for years. have these the MA.

it's to so an talent expect focus some So traction. now, see for significant we would area and us of right

please. question, Next

the James It's ahead. go line of Sarah Please Piper Jaffray. with

you've the it we PBM And you. Or as analytics, Thanks. that flexibility that do Anthem's benefits products? is think a if lose partnership is in far? had to of so development? portfolio customized to if products running scale or you a about important how in Thank conversations anything externally partnership, and Should synergies at product other you're insurers you're other more off-the-shelf the solutions? of it a is selling approach Anthem And

Sarah. morning, good Well,

I a think embedded. is, questions couple there again,

standing you PBM market the business many we looking to First things not And like deep that, do as we're to are our issues, selling some products so we we're And we that to talked what up in ability out clients we're think determinant confident already again, of standing And early have out serve completely up converted say, and as own to looked And the and – a this but pretty see leveraging we're the know, or an we're flexibility their X/X/XXXX. model for integrate conversations can about, meet right well. we've IngenioRx, are the we question think demonstrate of do meet very, yet. of industry we we're pretty PBM marketplace scale IngenioRx able as guess I same well have Medicaid of would Blues have PBM. pretty that feel in we given medical. and that I itself, other we've that don't to we story up that for the because at as in we're as behavioral, But confident able those Anthem – that integration in now, needs. for of we're also talking basically of as our we've partnerships. have it's social in least things be some as very thing, customization, with scale the not others. beat to your there economics. it that old standing the that And We about well strong But part and been scale. strategy as pharmacy, that of while that of That now, of you customizing, around amount can business, be a of management. some the effective, specific the of health some foremost, I been is again, the continued right that very put the it the we to part we that by have the And whole our to our still numbers our do to are able able to flexibility build, been confident and at we've with

Next question, please.

with Citi. the go line It's Ralph of ahead. Please Giacobbe

Medicare. Medicaid It enrollment gross Thanks. some I and and go Good had. Medicaid commercial and obviously includes MA fully on know to adds for morning. want guidance lowered just back that there to I it you group were the risk. and like commentary like you the that sounded looks But insured

commercial the what's next growth, is general, that when little the ex-exchange just commercial about out that's market slowdown? just risk sort that of kind you a on maybe seeing in or and commercial we of in the seeing the going of bit about Thanks. as and of obviously and strategy growth think flexibility year to a risk can segment there. is specific the hoping you And sort then So talk flesh

question, Ralph. for the Thanks

overall membership, to lower but XXX,XXX of guidance, did our of still that risk XXX,XXX we back implies growth terms In year. in it half by the XXX,XXX the of at the

remarks, on As Minnesota growth We John in bringing and do later with I you expect we some in alliance Medicaid year. our that group did shared in Medicare. our we're know this my

the as business know business in Individual is the that half in year. also our still We back some attrition will typical have that of

of of flat the be overall to we would As modest expect our rest growth. that fairly to think Commercial group business, we

how we're about So thinking of those all that's pieces.

give the we to where some and of expect color commentary terms make of opportunities. marketplace the see – marketplace, kind Pete In can on maybe, itself, you

Yeah. touched about I Gail without I particular – I mean, every market markets, speaking think upon before, different. what is

level can that Ralph. the competitors different we XXXX beginning, and markets. momentum have that, and we're with And the that we're going see to take that execution believe I the and deploying higher We into we're said, about, we options like We strategy of talking that can share. feel we do product and confident

So I a product, going or we're see momentum feel going XXXX. but wouldn't about confident to particular that talk geography into

Next question, please.

line the with ahead. Securities. go It's Costa of Fargo Please Peter Wells

XX,XXX data increasing can half government picking You already about July that lives that of you the morning. group the us see going more talked Could you tell in picked year. you're up? We the lives. group Medicare that into up Medicare back Good the from about

many us how tell now? your are the and you do on have can from right books commercial conversions these retirees commercial retirees you So

for Thanks question. the

of In of Blue commercial those where customers. are terms Shield of many are, them most Cross Blue

not on competitors as we're some some of although some well. is of we those majority are that customers picking yes, them, up of our the quoting that currently, So, from are

So But opportunity bit mix. is of I Thank own our clearly a book. you. inside think our commercial a of it's

please. question, Next

America The line Please go of Merrill Kevin Fischbeck Lynch. Bank of with ahead.

Thanks. Great.

balancing cycle your versus of that how does you margins wanted just How that? on multi-year can about a MA that? so margins? little you growth do in can memberships, opportunity long the about target opportunity, membership I long two a to that double-digit to things? Where take just is couple those it we year your MA looking – opportunity, organic you where think guess targets you're how think get are? you And provide and more You growth, are thinking color said, versus to I for, that double-digit mentioned mid margin MA – Is then I in an

question. for the Yeah. Hi, Kevin. Thank you

In terms us that deploying range. and Advantage our Star the even around. to Medicare that really allowing have market quite we year is marketplace within we our some profile, of to continue in honestly, plans And target margin we're five margin helping be

margins. things if depends of terms in various medical member, the that might it's an more can If another to it or it type if it's carrier new cost second from going a is member management it In ensure the order do the are new terms of But member much there. a to that on quickly. into how long it's an achieve we quality in takes, take lot year to a scores get the of other starting or we there certainly opportunities, to existing management target member, care existing of

Thank you.

Next question?

Steven with The Valiquette Barclays. go line ahead. of Please

Okay, great. Good morning. Thanks.

not in also or year, last like did some to that on you're the provide middle net you of claims question. about know specific the a you to Just your helpful do not year, whether talked and a ACA-related you quick I relative But provide adjusters. experience position numbers in the risk around color expectations. receivable

you're to I So, same curious some this if Thanks. I provide guess, that of able was color year.

Yeah.

much true-ups line. don't be, of that and In terms asked. exactly terms very, understand we projected the a of and really have clearly correct – ago few of our risk information we've what everyone out some else as final the the thought in marketplace level did. would provide get we got CMS that were It the line expectations. in adjusters, very with they specificity But of from we you're weeks was questions We the

that now came good that of We are very adjuster approximately what feel with night. significant get going entitled cash and to we're a last risk receiver million that to with $XXX out we're CMS

XXXX. course, is our the which comfortable larger but and, we magnitude when we we're of extremely In receiver, footprint approach goes all playing be our XX%, In XXXX, that's based significantly your have very out footprint obviously and dynamics down on a strategy with – and a than XXXX, terms well. significantly. risk to has in still still But think adjuster over the been expect of is reduced that of by

you. Thank

please. question, Next

It's ahead. Goldman go Steve the Sachs. of line Tanal Please with

estimates, enrollment least risk morning. Good guys. and big but of margin versus and in segment a Commercial in sort our lower the rate, beat Thanks, noted, We and ASO. Specialty at revenue

So whether a drive kind pricing got you'd factors curious if I'm other better like dynamic that any might that. to you there maybe know or out renewals of call are for XQ

I buy-ups. don't what and Well, has think been a through then thank able disciplined And Steve. of you back to changed bring successfully I been pricer, to for we've we've in anything number I the mean, very said approach. our secondarily, I'll so go question, a

So on two rates I inside factors have the really impact an had think those PMPM market. our overall

Next question, please.

Line of Josh Raskin with Nephron go ahead. Please Research.

more wondering you give medical not It company Good on of just sounds Anthem seems like morning. more lot if specific Thanks. like the sort impact. us driven. Was some that's that's It a or cost enhanced Hi. performance. trend an color industry-wide

then doing? And give through being Are you place, states specific processes, little reductions? attrition that you of the that certain going color you Thanks. on are protocols more are bigger new often, could Medicaid Are just in pretty sort are or So you re-enrollment seeing a what there all stuff? are if exactly there and restrictive in on bit markets?

Josh. Good question,

then ask Medicaid on bit. comment little and I'll start Let Norwood a Felicia me to

what we an would the much are everything doing, I In on on mentioned. terms cost focus across you company point of care. your pretty of intense have And question that we to

foremost, care manage do have significant that care do particular integrated lead primary a our effectively. we the had help care, and of in history markets of First incenting basically we where long in so industry volume to us in cost have local we arrangements,

those all particular, in Secondarily, of AIM, mitigate done specialty we trend. oncology, a help job helping and they've to use radiology, of on management nice very services do us us

last an that we Enhanced point our just effectively staff and also network, And our to the – deploy strong had before. across Health actually some to, not integrate. industry results practices unit cost the I've seen also two help leading we look ensure markets like We've those programs, have Third, but perspective, which we're things shared manage will I things. Personal local more looking to that's we thing from and Care, in I guess

pharmacy, an it patient on an working have behavioral, to been the answered I has we've I whereas and integrated helped. record the on whole integrated bit We a that ties with about think health integrating little dental, question record vision, and patient pharmacy, that

goes deep to market impactful combination presence, reason don't we're value-based are individuals many able into feel of and that why and the deploy again more arrangements our we With to can – So, little the primary provider our bit this putting to marketplace of Felicia own the market. then actually to drive we that care on those ask differential that, programs the into of going have we I'm cost care comment the enrollment. a to by Medicaid the

morning, Josh. good and Gail, Thanks,

Medicaid her due redetermination we're several because our as in Gail a opening in seeing reduction in an continued also and to members TANF of in We are states. primarily efforts seeing, decrease the that comments, a improving mentioned enrollment, economy,

play will with where Cross We Medicaid But the to put Medicaid we respect end XXX,XXX to X/X/XXXX. to about Virginia respect mentioned which are are our over of general lives, about certainly from Medicaid several the we're partnership excited certainly XXX,XXX markets about to well. just as lives we certainly contraction the our end we and Blue seeing opportunity market the as very QX. expect also of in look Minnesota ahead, at expansion adding share expansion, with and We've encouraged we've some as in membership as year ahead mentioned,

Great. Thank you.

please. question, Next

Taylor Gary go line ahead. the Please with of JPMorgan. It's

back question quarter. the I wanted morning. payable the days a for to to I in had claims just come John. Good Hi.

I and impact on really But the acquisitions sure serve have the days address in the year-to-year. sequential think explanation the to not I'm footprint much about claims ACA payable. decline the

that to you days, if wondering, of claims processing operational of look you'd just that? decline I'm So X.X year-to-year – around is attribute that that the improvements most these at

you Yeah. Hi, Gary. question. the Thank for

times sequential are same exact sometimes in explanations is days payable explanations for the for by The here I metric. we business clearly, a that's And issues. while claims the in it's decline the operational or both impacted on of provided quarter the the calculation, second the And other same some year-over-year. It's impacted of going have the metric math XXXX. that just an by interesting in

So that Xst and Choice of want the a of on calculation. acquisition significant how math I spend just the moment the just to to do is America's the timing

XX reserve then So in we XXX,XXX end XX entire very the our And benefit had associated days February We over Advantage acquired of quarter quarter, in of and expense, first lives only reserves a Medicare second the with America's expense. Xst quarter, days Choice with the in level. late reserves. it's just benefit had, in consistent had

systems is improvements, that like, and as be itself significant also then things in year-over-year It's on well. the And operational consolidation. to very continue of So a focused impacting driver. we

in faster we're EDI improving associated being We balance. As we're payable We're that effective. lower throughput our there will efficient with more believe saves that rates. know, days claims people and be SG&A But to adjudication rates, the auto and our then continues future the improving additional this. all in provides

end very our are very quite the is calculated and it's strategic consistent in honestly strong and I reserves that I very conservatively very at very of will doing year-over-year. guess So say operational, everything, that. what But

Thank you.

question, please. Next

Capital RBC with Morgan Frank ahead. of Markets. line the Please It's go

so morning. after Good like sounds growth It slowing, those two deals. is in Advantage interest external doing Medicare your in

there anything seeing is recent acquisitions of Is two Medicare seeing assimilate Or more M&A So kind in made? the of wanting the you for curious, this you're are Advantage? any there? to just you've Thanks. I'm just change out market

the Thank you quite in space. question. in opportunistic we're Actually M&A of this terms for

it's think can of immediately. growth come I from most And on the focus a more think we so where

As cost right footprint, now, get our markets. and in what very, benefit offerings, things medical But opportunities. very we our given quality, management think have arise, of type our can in we we strong strong think those good those grow strong deeper our I certainly are Stars ratings, and interested again, that we

states opportunities some presence we there. So believe expansion in and that have counties already we then do there's significant where in the growth around a geographic

dual-eligible quite population. opportunity opportunity the the about is we much have we The in talked that other haven't that as

actually sell in as an as Medicare. you platform across heard Medicaid our that. all industry-leading well do have we well to We So opportunity year as do

Aspire Medicare we Advantage support growth that to helps capability coming our us that as I great then to point we the And because So think we capability see think arena the leverage. from of would well. leading a that's like acquisition, I population, that a example can

think looking So where care we and interests those as and marketplaces. at that we're quite quality lie, opportunistic. capabilities support help about Thank you are And of in drive cost our you.

please. question, Next

Jefferies. It's the line of go Dave Windley with Please ahead.

through of Hi, would see of XXXX And strategies that could design all? Gail, design XXXX, if the good how impact we as insurer if morning. strategies? I'm change as if potential so, fee How the benefit change the wondering soon product at and extension any that? might moratorium health early

of stability what marketplace obviously in beginning Well, of certainty and renewals the kind certainly understanding we're – having XXXX for and doing February XXXX.

be in to think I of a picture tax going our helps and structure where have the through. health we sooner clear the that cost passing insurers So is good, terms tax pricing of the and

In terms on dominant design, It's plan and we for issue something of focus affordability employers. much. is a benefit that very

greater not overall. Thank health obviously, that's insurers stability affordability tax for we employers. And the greater pass having provides important to think you. and for So

question, Next please.

Stanley. It's Sopcak the line Morgan of Zack with go Please ahead.

has you. changed proposition if drug integrated having of to the value IngenioRx drug Thank think the you you implementing improves solution? how all? pricing blueprint we've at if Thanks. see wanted about manufacturers think Okay. recent seen activity from it and the I the And just

question. first for reducing on overall Thank we that you the net and begin drug prices. Well, me foremost let are focused very

that and we certainly of goal. think the the I It's industry IngenioRx. really is goal the as our launch goal it's

based in to do line, that in And building on value we bottom want proposition building gross a $X In are this that's prudent cost savings PBM on lowest feel really everything based model, the of very and getting number really XX% model. consumers. we but with again, build we really But that we've ensure cost. again, I net we what's out, terms it cost are the billion think we of new supportive implemented as very not to value but this of generation, a important. anything that that confident And rebate we're result very of supportive, net does are next-generation see the a not gets lower for laid lowest that, We're falling to changing. it's

our focus that you. so really with IngenioRx. And is Thank

please. question, Next

time, we now comments. this management have other I'll conference company's back to for At no questions. turn closing the

the Thank for that to great. and questions. we're through earnings able Well, you call. our pleased second us were Thank joining much, we for quarter very get you

improving As commitments ahead, the you make all at we every our we deliver want Anthem promises of and Anthem you associates with the on each for quality solutions care while time forward shareholders. look our future interest and of for day on delivering the living speaking your to our endeavor we as on at Thank events. to to values health I we that to look value members, to bring our and the focused Anthem to make thank the remains I our same in we stakeholders.

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