Elevance Health (ELV) 17 Oct 242024 Q3 Earnings call transcript

Ladies and gentlemen, thank you for standing by, and welcome to the Elevance Health Third Quarter Earnings Conference Call. [Operator Instructions] As a reminder, today's conference is being recorded. I would now like to turn the conference over to the company's management. Please go ahead.

Good morning, and welcome to Elevance Health's Third Quarter 2024 Earnings Call. Vice Investor Tanal, Steve is President Relations. of This call Kendrick, on call Mark Benefits are with Carelon; our us Boudreaux, business; earnings morning this Morgan and recent Felicia President our initiatives. for of year and President the CEO; And revised against and Government Gail brief our Commercial discussion business. Gail will Health the President outlook Pete Norwood, a Benefits Haytaian, of President our CFO; Health Kaye, and of progress strategic our begin of with the quarter the financial Mark discuss and then detail. will greater our results outlook in After team Q&A. prepared be available our for remarks, the will

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

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

discuss earnings Thank on you, results, Steve, for provide we outlook Today, call. our review operating appreciate morning, will third the everyone. joining and an financial our good XXXX, you environment. our quarter We update and

will Health, for we fundamental growth Elevance During of remain also drivers highlight the strong. long-term which call,

for costs our will on proactive the was below are to per business which earnings to Medicaid diluted we to business. quarter operating enhance were being our elevated our the adjusted by year in and and efficiency, the third long rates, our with work states medical which due impact the quarter, management, strengthen we full reflect outlook partially actions are acuity $X.XX, third the offset of For doing The our expectations, members primarily in focused are term. medical share taking

a are have reflect challenging and environment these our navigating year operating to We full and prudently challenges. outlook dynamic reduced

Given the acuity continue, reduced our per adjusted $XX. will and diluted timing we rates facing our currently results third share disconnects expectation to and industry outlook Medicaid have between quarter for that earnings approximately

not are we future Importantly, the achieve to gains. short-term leveraging

to Elevance over position We the for investing growth are long strong Health term.

are often We're The with associated setting than states members, short-term a use These year acuity in the the underlying rate and a of unprecedented the of end rates mix byproduct partners the business lag, data headwinds on working are reflect the on public that health our more are ultimately impacting of emergency. is a old issues albeit our with confident time-bound scale as renewals. Medicaid us and large rates. state that constructively will shifts

capabilities. Over businesses managed the we business opportunities, with other our long is distinct populations Health where offers is and an serving specialized and unique notably our provide care complementary growth significant that and Carelon Benefits term, to attractive value Medicaid integral

we business, our are Benefits diligently Health on strategy. our Across executing growth

state tirelessly appreciate Our partners, is the with working our Medicaid collaboration. team and we

now the decade, continues to past inadequate cost the enrollment deliver manage the appropriately the still operational the efficiencies to While urgency acting reflect will rates significant that acuity of received our care. increases Xx with to we're stabilize, confident to are that and trends historical averages. of We're members cover as highest we've Xx cost and rate they are we XXXX to in expect be

with recent the expanding in important our XXXX. solutions specialized Blue be to Shield Carolinians win second Blue In nearly with or growth partnership through sole-source and as aligns they our Partnering expand chronic an of foster care Health with of care is managed complex XX,XXX foster conditions to award new of strategy. states Cross North beneficiaries part with pleased the This contract Whole we're sole-source members. Carolina, service marks a our covering care North to well

taking our steps sustainability business. to we're long-term ensure of In the deliberate Medicare,

We days for period overall. our position disciplined Medicare XXXX election into and to annual took our heading we bids, on positioning X performance into Advantage XXXX are are now with building actions the the approach in remain pleased XXXX. our We business to sustainable

mitigate XXXX, the and cuts our members. beneficiaries, access took high-quality membership, to CMS' benefits rate value most we margin balanced approach prioritizing to on and impact care and a For promote the seniors for of comprehensive coordinated to

XXXX, we XXXX. And market plans grow reductions maintain ratings we all the our sustainable led end than at the we expect in result, we're priority, better markets. slightly a greater Given high enterprise and exits market products membership meaningful remain the individual star in and we stability by have broader our positions. quality of market benefit Advantage line Advantage in goal Medicare in long-term star as where made XXXX, achieving of strong into key a heading maintaining or Medicare ratings our for to and offerings to committed

one X-star see nearly cut members higher X.XXXX. year due and stars missing percentage multiple pleased narrowly our plans due The measures member of and rating was plans. payment to larger be improved our are decline of the or X we in to points. by decline our For to H XXXX, X-star the higher to of payer only a mix offer significantly XX% own contracts X-star performance entire rated our across Unfortunately, we large Star will

We have challenged our are with considering initial CMS and our scoring options. of all

both their national growth on XXXX increased penetration driven track and be by well performing in are to in and of products We financial businesses. best-in-class services, of given our targets. momentum businesses further anticipate Commercial are individual exchange achieve to Our our and account

innovative partnership employers, on focus in resonating. Carelon attractive For value health the largest offer is and and solutions we in whole differentiated with our

XX% delivering strong In Exchange year-to-date. up our Individual particularly business, membership more with we're growth than

segments. under which will serve expanding trusted ACA and we're existing presence states: Focused Maryland our driving our XXXX, Carelon and these in health to lifetime for partner growth enhances the our consumers geographic in Individual and brand, X in ability look expansion as our to plans we our communities. states while Health a Wellpoint As to complement Family Texas Benefits Florida,

Turning for to Earlier to we month, significant affordably. the which aligned Kroger growth. of and CarelonRx our for gain Meanwhile, weight making drive strategy levers Carelon. in scaling management whole traction base, our with enterprise this solutions continue solutions our proposition. Rx innovative delivering in Savings to our health Specialty the its EnsureRx continues savings of matter as such diversifying and that controlling acquisition We're is value clients. Navigator, flywheel customer expand Specialty Pharmacy, progress while its closed

growth XXs all Growth track and community-based point we're in revenue externally. initial the entered value services will chronic serve into upper to foundation before agreement includes a to for to services end first driving serve external members. our an CareBridge, we excited demonstrating initial members recently customers as of health and acquire strong, the in Carelon that our remains proposition our home above internally for to are Carelon low of a outlook also complex for growth. its This and business, percentage and and continue home value-based manager growth Carelon's targets on for proof exceed XXXX,

it the to expanding the Despite creates driving business, the the Carelon a experiences, and its for application of value efficient environment, health term, of capabilities proportion Services growth spending, growth care by health investing processes. Health plan challenges more growing reducing and we're the are Elevance and current supporting extension, to long sustained long-term over customers. manage is of AI-driven solutions costs, including for provider that position the through member of the enhancing

to and beyond. in and expect greater operational realize benefits in financial We XXXX XXXX impact and

productivity, associates. impact, that reduce administration. are access and guided provider service, increase as mission and tasks, AI few just We're our we further we're the For personalized and AI anticipate in care, programs also interactions members, to the tools to integrating provide increase in focus we're and costs provide members, to a tasks, These touch investing reducing our of automating streamlining onboarding, efficiency unmatched And on coming value for points improving associates, providers enhancing that can enhance across and our by a have satisfaction. the administrative digital contract by we applications to years the improve greatest manual across organization.

remain businesses. rates to members. The complementary our summary, strong, the in bound, remain are with issues we're the our of improve businesses fundamentally adequate our we flywheel acuity urgency and and confident impacting time and acting for In ensure reflect that with Medicaid long-term building growth we're performance

and right are long management care the over in strong all care and confident to need this and that period the our Elevance and service in consumers serve across and sustainable positioned that the containment income will for of Health even better system. we're of levels, investments to making We stronger growth term age growing for we from change cost emerge health unprecedented position

also our those in our the ongoing and privileged day thank to is Before dedication that dedicated year. for do for consecutive like tireless and stakeholders. fifth our to Great for passion the a closing, to to each that would we're associates their and to for mission they It as deliver commitment is of our reflected every serve recognition Place Work work for all I their

I'd Mark our details With operating results like more to to over turn to our on that, Mark? the outlook. CFO, provide call Kaye, and

everyone to morning line. good and Gail, you, Thank on the

$X.XX, and members, results, quarter we ended XX.X adjusted including which third earnings of per GAAP with shared, quarter of diluted $X.XX, earnings the Gail diluted our flat As sequentially. in share third came per reported expectations. We below share million

Commercial ACA and footprint XX,XXX took growth by the that we was Year-over-year, to of local products. targeted Commercial Individual deliver large specific loss the to effect by health fee-based beginning strong driven in change positioning members and our XXX,XXX, largely grown approximately has of membership plan Growth the September. due value on of nearly employers offset a the distinct by Medicaid at

consolidated was up points cost growth the reflecting operating revenue last point developing strong benefit reacceleration for $XX.X the quarter for basis quarter, Medicaid increase the over expected. XX.X% from The than year-over-year, principally year-over-year, ratio of in X% third worse XXX quarter. low was due trend Total an expense billion, to

While record range they year, will reach to in the Medicaid of remain cover to this inadequate that levels trend is rate historical Xx cost averages. Xx increases

state partners working to capture are our the in Medicaid acuity they membership closely our We fully ensure of future rates. with

proactive further mitigated across took the management actions During through enterprise. medical to the the we and efficiency quarter, operating enhance disciplined impact

As points. operating was of gain billion $X.X a quarter operating Elevance year-to-date ratio the business. the in for billion period, $X.X expense reflecting Medicaid was X.X%, declines an and for XXX improvement our result, Health's adjusted Adjusted basis primarily

the our above targeted a Days stood XXs. posture in of range payable with remains at prudent the the end claims consistent slightly and maintained to at quarter in We which third low days, respect reserves. XX.X

remain will business adjusted share results our through to the our Given and full have elevated per our earnings We trend be be cost approximately for quarter billion. approximately in XXXX we quarter, Medicaid full reduced than operating will benefit is that we basis outlook year expected approximately year third XXX quarter, Full year at now $XX. expectation higher to least more than our points bringing fourth diluted expect ratio now flow to anticipated the cash expense last $X.X XX.X%.

mind that the keep to of time operating we in are industry will long-run of more our revenues our representing in the businesses underlying that important half confident than margins It's care bound, at below impacting potential. issues will It's membership. are notable their managed Medicaid be that also ultimately and reflect rates XXXX, the acuity Medicaid

over return will margins levels time. We to appropriate and sustainable expect

Turning to XXXX.

expect into national continued X markets. our exchange business, of new alignment our by our We bolstered of large and expansion offerings value in the states and group in the momentum proposition Commercial

we the Carelon from our Medicaid specialty for build a balanced and to return notable deliver with as we further continued will capabilities expansion growth internally And adoption Carelon, redeterminations home We will community-based normal Medicare and and business. dispensing out in in enterprise as in drive greater flywheel momentum Advantage scale of our and stability CarelonRx in externally product our and contributions pharmacy Services cadence. growth, business

at create of range. new and undertaking are high our line processes many much least through single-digit that excited we transform our will in we the actions growth, in There structural to and value. technologies is to algorithm expect efficiencies with the application percent in core in acceleration long-term long-term and strong modernize about Finally, bold growth be of revenue XXXX,

is are timing confident XXXX industry While impacting this in in rates Medicaid EPS the the our This at our time-bound, growth the Medicaid that range. and percent outlook point we time, reflects care are disconnect issues will for between managed least acuity the assumption adjusted continue. at that mid-single-digit

the to same the focus this been success long-term has with that We and backdrop will discipline of navigate central Health. Elevance

deliver the adjusted power in our to per time. complementary confident and in at XX% average are earnings on of diluted strong, over annually diverse Importantly, ability we earnings share growth remains our least businesses and

call with that, questions. the for And please operator, open

our the UBS. question, Instructions] A.J. from [Operator line first For we'll to of go Rice

in of you're you're you deck, of get So in 'XX, slide 'XX. growth expectation 'XX is we -- earnings the that off in to that reiterating should you from around all to which to Medicaid, get in be CAGR the would back that XX% But of $XX the rates on we're suggest something getting your year, and 'XX kind like 'XX sufficient in and grow at looking base give X% like are earnings get which something of you that hit you'll XX% also year, right to the -- new multiyear it 'XX? Or what like the off would base issues something given high 'XX sounds I track saying target? 'XX is you XXs. rebase guess would question the to this the going $XX.XX next short-term growth accelerated

A.J. you for the Thank question,

Let -- that you think math but a appreciate there's provide it's have because certainly of a environment question, dynamic high-level I we're you bit perspective important I that little of operating the around think me currently in. that in lot

power start businesses to the of we that earnings really diverse think complementary that, and I remain believe first, strong. our

about long over an over feel at and least term about EPS So good XX% thinking time. adjusted the

So think that's I important.

what's of happening some I'd right shared our of in things his and we're reiterate business now, sort the As you to Mark heard, like opening comments. that about thinking in

in acceleration at algorithm revenue long-term strong in with our growth, First, the single-digit high least line percentage. in

momentum the which our sustainable good business, a strong. Commercial be business I long-term to our business entering we in Advantage additional several there's footprints feel lot We about So ACA going be year. think next about to excited expanded growth. Medicare and focus We're

growth Carelon services And the operational that at internal deliver to of in external is piece is we in to look greater pipeline the then robust and the substantial efficiencies. And and even continuing going value CarelonRx. realize as seeing we're last

to XXXX. anticipate about But is the think do the time spoke are dynamics target. given and can that However, bound, in, timing we our a we're going persist remain in this Medicaid 'XX disconnect again, environment that margins and but believe that that acuity, below between we rates is we long-term which through

to because important business. we really it's also, And going there's a make that to ongoing that powerful 'XX, investments we across in think are continue opportunity our

the think So taken give our together, 'XX pace this expectations we and think to think I with assured, the that will that timing, we're to a success. discipline that 'XX being to in more But our going long-term prudent and we're in guidance you fourth and can been and navigate has focus lot how about we at quarter. our you continue detail rest central same

from Next Wells Stephen go Baxter of line the Fargo. we'll to

is impacts we're alarming, at the Just implied there of the the membership of that's want from given Obviously, to particularly redetermination. the magnitude come end back the Medicaid to revision discussion. that

some to of you quarter much so things guess new on how this how I so worse not better third are quarter, reading developments understand what having understand to actually those the trying versus us a last the can quarter? perhaps in to is were better where got of things And new help quickly. there are? extent much the third good Just

question. Let Thank Kaye, you. to me Mark our address ask CFO, your

good Stephen, morning.

the as the Xx If historical that related year. trends specifically Let in additionally, step back current quarter, cost negatively me stated accelerated depending range for cost our quarter. development accelerated the start in we Medicaid off the prior Medicaid were Medicaid current the business. by they period saw I for X.X in we're we unfavorable tracking year, Xx And trends noting in experienced around third state. the of And throughout to the moment, -- such, the a on average to

by our also to The states. to remarks, date complete. prepared that rate driven, historical claims trends higher now and collaboration. the continuing redetermination elevated we're remain we this is the We in substantially the are appreciate you average, membership cost they while of than fully cycle And have their overall And with work level increases cover been trend acuity to higher insufficient much very given address primarily heard us seeing. the the is

real themselves fully important schedules. before the reflected more in and with to processes lag states, information are recent rely on trend so to going in that And while it's it's keep And their state as typically we that take rate years. much reference that's the mind sharing periods as experience time experience by X time to current X

Hendrix to go of the Ben we'll line RBC Markets. from Next, Capital

kind of the catch-up on may more pacing to rate of to wanted the a over expect coming Just you bit little of that in year. drill the acuity

a any there increase, members that then probably kind think bolus visibility pacing I do a accelerated a of there how about off are some Or mentioned big have kind see of state that throughout a year? where renegotiation you recovery? come creating pockets think are recently. could Mark of bolus came any off, acuity next But it. into for You perfect have the you of don't members just large and areas And pockets, be of recovery of catalyst

question, to said, the year. over through Mark unwound quarter. PHE was again, Mark in But well. what comment we've remember, Medicaid largest saw as we the mix I'll for the third shifts ask of Ben. on course has this acceleration the this And I Thanks and Yes. is the as the seen unprecedented as of one this

that is in important. think putting I really So perspective

had have in before Medicaid. like environment an this We not

Mark color have a me us. frame give a more it's So that. bit let on very time unusual for But little

remarks mismatch we the expect between think updates especially the as to acuity thing think Ben, increasingly Gail's narrow, about we rates do state rate the member is to that that acuity. and I'll only underlying reflect I add XXXX, as

Next, we'll Mizuho. to the go from Ann Hynes line of

Can the little than us you utilization bit Any could detail trends? more a helpful. increasing on provide outpatient, you color more your expectations? Is just pharmacy? give what inpatient, it is be would Like

please. address Mark have that, I'll

Let then this me Medicare, perspectives. take briefly do bit X I'll Medicaid. of I'll do from little a

the manageable Rule. pressure slightly the some related It overall, elevated. Medicare reflected quarter was Two-Midnight to So in was incremental

are health of through surge ongoing a I trends seeing the as about also ago, continue in trend. We margins elevated late They spoke COVID. those we summer the of pockets for in area. are notable pressured On in a minute the saw rest we Medicaid, to some And will to that businesses Overall, long-term do below remain X average expect XXXX. behavioral year. certainly our most remain

our Medicare, again, And driven very positioned our but bids we did about in as some results comfortable And Medicaid. were for XXXX. slight Thanks. Yes. by where pressure said, we predominantly Mark see feel

we'll to Next, from go of Andrew the line Mok Barclays.

basis Tiffany of miss of is two, the for One, the on like points like apparent right today? profitable ballpark like It Medicaid enterprise XXX This just about points translates the think like the the book looks incremental to basis about? basis is points XXX Medicaid that quarter. hundreds XQ to given Andrew. pressure, of in And MLR is pressure of

I'll to to you. as Thank well. respond that ask Mark

But And integral the any and one is look the the profitable Medicaid important businesses. for at to business business marginal the as question. us, attractive quarter-to-quarter it you to the business, about year albeit Medicaid term, itself. margin Health other a business. Carelon really is very Benefits long There for be below managed our The that to for profitable target are Thank it's you is care expect think year, and much I this quarter. the and it do can't be Medicaid note range It's about particular and we dynamics to single normal for ballpark over expected XXXX. in the importantly, complementary of right

that we is Yes. question. we have time that, this business, you do we And again, good Medicaid populations is that unique Mark. just particularly very Thanks I thank again, to a But bound, capabilities. for for also the where want the specialized reiterate and believe believe

Erin line the Stanley. we'll of Morgan go to from Wright Next,

I wanted to on ask Medicare Advantage.

and of being rational sort of above in out terms year? the is with a kind of expect of analysis on now and the latest in the it terms growth to market driving of some of as according out kind competitive landscape playing in design the fairly details, of on growth? MA plan based playing there you Just assumption environment benefit next profit or focus MA that your versus Is at would

for Erin. Thanks question, the

we we position realize term. to I the First, actions in positioned think the business number prudent beginning last a at to long took MA. actions, year of for it's of feel the year really important well And

are think we to sure sustainability. business didn't long a this Importantly, long-term of And continue markets saw and we market had year, we number in we for exits term. make of stability this for that the where look we

a to into ask to thoughts our few that I'm and going comment now of a AEP we're So days perspective you market. Felicia give the on

Gail, you, thank Erin, for and the Thank question. you,

We as didn't XX,XXX in Our membership and started take foundation several in a members. really to represented create order sustainable business, that margin. to strategic included Medicare that at Advantage, to for exiting and we year actions look really approach underperforming Advantage markets, growth our start last our year strategy, and about this Medicare balancing around

benefits Puerto some heel of in made we reductions on our supplemental that, in losses the to Rico significant addition In XXXX. in

focused the wanted a for as where products and margin, needed for balance the maintain and bid our and on in wanted we to and that So put went with between stability to performance we XXXX, work we forward. foundation be together make sure attractive very but us growth we we started we particularly as to, sustainable

to structure much Specifically, share. on support D-SNP the focus very have and business we where the our assets our market really leading high-priority in we cost markets

prioritization overlaying to are we products and market our dynamics preferences in and local not own our with I were predominantly our that Additionally, our PPO, HMO, prudent note consumer market want positioning, framework. very

key to of in into days positioned into So feel good only target as sit the products and expect We we when but market. today, we very navigated said, look we're feel now, terms at we're as this our here AEP, grow market, very better are X slightly prudently in about our really than we And as we how head AEP. competitively where or environment. line the you well we positioned we

go of Wolfe from line Next, the Lake Research. we'll to Justin

trend through I the quarter, and Xx just through call themselves Xx curious if run don't ever you follow Is on point, your given multiples come terms trend quarter given could give discussed wanted it out heard the in quarter? people to being us roles the are accelerating some To back take, to worse on color think redeterminations Medicaid on around the point? this it have typical. the of what's typical. going up this got that at of on through or has on comments seeing you're been, sicker your And being I anyone should of give that

fourth ending you like And the the is and you highest the you us quarter for that were that to the rate think target versus X% tell then about? where sounds where cost, exit margin it given can X% like, all lowest looks that the expect quarter we in quarter the it to margin, be

Justin, question. thanks for the

of a Xx a ask of this our in changing some and most on more Just in we I'll for none to give coming off are at seen process, let pace bit when will planning but think oftentimes And us, embedded. the PHE. we of ask in driver it yet, it structure. long been With them been Xx Remember, couple did a business, time. responsive in they thoughts, is change But we you're have a as been quarter. understanding bit which we've you again, had in in with the data and year little of take the that I've again, the state me acceleration Medicaid questions the those significant some I perspective. this to perspective And diligently saw We've has Mark business as to where probably be. and of again, and other Mark that very was that, cost provide think working plan their third need terms arrears looking accelerated this the membership important. through acuity And partners was more kept rates our not again, for little we to to

long-term the in of which activity, course, downstream expectations. that reiterate cetera. in depending by sort I'd on driven range. X% has that's add has percent meaningfully from additional Medicaid level above also this run color heard is the Gail, really just redetermination-related And we elevated that unprecedented made and definitely in that And our to for et the program range. just mix, to several which XXXX historic resulted acuity average states count, you point to as running historic levels, single-digit now of adjustments, for trend we of changes Justin, target the an like to trend membership Xx around low Medicaid Xx here, relative trend, to membership in X% earlier, to in plan average is

acceleration we've our business match around been again, AI they've the place partners. that done our making state And for And not bring in in active control we and to for can we state But work finally, very the that of and point, appropriate partners cost long Proud very active term. at with the that the managing get to still. with had been think Justin, around our again, things work this level. take initiatives teams to this the time we will of your also we've forward. standing our to sustainable Obviously, structure do

question. the thanks for So

Lisa the from to Gill line Next, JPMorgan. we'll go of

your coverage. We've Rx peers one about Gail, trends accelerating specialty. seen of in around catastrophic talked changes IRA to

going the specialty you as specialty? as strong that on out Is did driver around what results. you then just called seeing, we're side growth flip anything trend you price key of very seeing that? Rx How on goes. far in cost CarelonRx had and XXXX? one, So a side, into haven't And especially for the Are that

So thanks for the question, Lisa.

a Let some provide I'll context. leads to question, our Pete give and me little perspective business, Haytaian, on more pharmacy directly ask who your

utilization, but drug in seen costs the have in So assumptions. our year-to-date, Advantage been line Medicare specialty increase D trends have we in unit an with Part

don't impact it see we've we been a talking what as significant to about. So

Pete what's ask of me Let pharmacy. overall to perspective little on a give happening more in terms you

the Yes. question. for Thanks, Lisa,

you pleased As strategy with growth. seeing CarelonRx and terms very we're said, of what in we're our

that We the of going of matter some progress path XXXX We're to into beginning in-sourcing see nice marketplace. the specialty down well. in wins regard. our infusion. pharmacy pull-through is our that making relates lot We're good of levers and as And in to story had continue as there. a growth, path strategic upmarket really our And resonating it down we've

is all as proceeding that So planned.

In revenue that the that terms even Gail expected. the expect margin out though, profile. largely initial did the favorable to really as quarter did track it performance When overall we margin see was still due a year the our out in our that year, specialty full We was said, X.X% you our or operating but look overall perspective, outperformance pharmacy you terms guidance spread intra-year. remains of through that onetime when the around adjustment was X%, on at saw an of And in from what trends. margins, we in the increase, as

where be. very where expect we overall good to it feel we and are So we about

of Bernstein. line Next, Lance Wilkes go the we'll to from

Yes.

on rate the follow-up quick for outlook Medicaid. a Just

what in-source far you the the of your on are far seeing strategic in the And just, broader 'XX? how If as change then that, you your early along in observed that, in year? increases, these making how was and then any functions might is year, as time maybe of you or half the a all again, does you what you're some And of bounded? are this of half color as make give outlook what on are of And of the you've question pressures the just part second PBM? result could based rate as moves historically in first any anticipating

So of questions a lot Thank Lance. you. there,

is Services, Medicare then saw, laid for And with morning we this Medicaid. Let medical around of us I on the strategy work assets specifically can that think pillar feel will And business. as first strategic, me question And significantly talk inside us. we being drivers. believe home-based pass-through the a commercial comprehensive we've ask have where take strong opportunities, as for our inside growth acceleration of the and the announced care those and then an just a in type as positioned. the in we of of gives managing Felicia acquisition and additional real part time-bound see shared address your Carelon really accelerator well growth issues out Carelon. Medicaid, how I'll we and strategy We Carelon revenue more We we we of you CareBridge very the we're another around about question, through expense

business. and So would our for focused very long-term our of Elevance very about the and we're positive of on the drivers flywheel feel I fundamentals inside say, growth growth Health

So in delivery. to in out our pharmacy side, levers for strategically, and control moving integrate the advanced we've we're matter us that acquisition, Specialty same the that you've forward think taking continued Pharmacy laid more home I exact see the us, path the Kroger and of

we're Medicaid and progress, right good Medicaid But very ask with dealing specifically. address to now. let about that the in time-based feel Felicia issues the we me So

for question. Lance, good and morning, So the thanks

year, 'XX partners states negotiations in state and imagine, spread the are of states can are the is across that at July a out of in rate working the the the the a the year. started rates that the seeing that you took understanding The our ongoing. first we on and with And work we that with that trends states when our the portfolio take at they states of rates half a also half our of working on, July about are our other year. with of work and states business states half back were certainly our with lot we're the you into we but look put half have As January around how certainly us look

reference about of earlier, the XXXX, heard most rate you states process. As when you the 'XX are setting our for think period

work now. year addressing look the half that rate and through the and at So taking as well. that to that have back We've receptive as given with there those next of more at our the a seeing we about. back of will and that states those going been be will we us more certain When adjustments and certainly happen state and go we some those have early rates midyear year certainly had states talk misalignment we're mismatch partners, look timing as

to clearly alignment earlier, change to confidence with the ultimately unprecedented our an take we total information time rates going process aligned strong that the we sharing partners, this our have heels our tell acuity heard are But to rates around and And a you you, we that with population. is respect are working some that But business. between as membership will you on up-to-date in the advocacy with get this which understand the will that of full membership will of in continue actually have acuity the we're state of we're mix that seeing. our changes seeing the I

the thank question. you So for

Raskin Next, Nephron go we'll Research. Josh line to from the of

is been on why rate topic, cost that ago. now this year this I'm have a Sorry to redeterminations understanding is still with most the right? acuity accelerating is accelerating the stay over done, mismatch or trend but struggling of They why started now. My

lose was So most around were was than previously. conversation like I about in utilization there to members recent I redetermination the from that this last coverage. quarter, activity think felt quarter higher there less And

would you expected to slow. so that And have

what's so trend? this I So I'm big in causing happening to still this the guess that is in process? confused Why as acceleration late

to in Two good like for you very question. points key much morning, keep I'd thanks here. Josh, and mind the

that quarter. in to the to quarter. holding First, related in about the key point second we've of fourth were us where September. as that Medicaid mind prudent relative we we costs modeled trend for to you approximately And view current had the in keep here development could unfavorable the And year think flat is a

to Ha of Next, Baird. we'll go line from Michael the

the topic. Medicaid Just on add to

So based than larger third on seems your MLR your 'XX XQ guide, be if pressure. quarter actually impact mistaken, I'm not to implied

own basically enough X your there. states all Or to So think October point, mid-October, case, even rate pass September, sounds the assuming rate Jan in along are data have already is like renewals? do acuity quarter, for time can though this the acuity in this in you guess, next have but this the you rates into now presume you just worsens I visibility it mismatch mix is you at I that increases? and draft these your And

and back adjust? Or So late? it is could that they open too up

things, Yes. level. just you in One, high A into fourth couple of also have the factor quarter. seasonality to

So about just on ask in the make doing rate you're And that Felicia sure talk a Medicaid process and to setting. goes I'll that. bit

Yes.

we the much of rate have XX% this for At so again. visibility for premium about question you thank our point, January. So for

draft However, those are rates.

the were into So with we right experience now, setting spend we quarters the of in third process. they lot making that a time the head we second that our sure and seeing states rate as understand

have sure draft states ongoing, we when yes, and information. iterative that the So are have still process we and to is the visibility around rates, continuing make that

XX%, state work the our between So as but of we the those into and the early partners. year lot have now renewals, discussions, us between to the work expect end a and said, and are visibility of January I terms Michael, of in happen

to And remarks. maybe one just on to Felicia's comment add

to in the fourth It's Just resulting is accelerate primarily quarter. that's to numbers. seasonality these expected reaffirm, Medicaid trend not in

Ryan to we'll the from Cowen. Langston go of line Next,

on XXXX. you the like expect sounds It exchange side into growth

we the the how should So the just I maybe about context, that and Commercial think guess profile business? Exchanges in overall margin for

you very much to respond our business, the that. Morgan Commercial We'll for leads Thank have question. Kendrick, who

competitiveness in that. big really approach footprint for the good last months XX geographies. about you our aggregate. over expanding question. the taken Ryan, piece in And Individual the of gradually disciplined ACA big, a very feel XX our We've is Commercial our thank and We in certainly, our a business

As in mentioned upfront, prepared remarks in markets. we're the Gail that expanding other

improving that by nice we're the forward. moving points share in serve So growth in have this we X markets to expecting about year, probably our markets,

I we're really also excited positioned with that geographies markets think but and served. We're about year, the on next economics. when our business the sort we're really already line the the being in that in are of where into, of in the said, determining expectations process well we've in That about it positioning moving

where have and just also And to Medicaid thing we those business. are another states remember, Medicare

with us aligns it well. those states So knowing

Stephens. Next, from we'll Fidel go the Scott of to line

environment maybe discuss can you and quite some there's in the the the impacts exposure for us businesses that to a those Carelon Do businesses. Medicaid. Just or bit of interested downstream if of to leverage from dimension Health Medicaid know

that on and how businesses positioning curious you're we're dynamics are Medicaid. of these performing seeing them how those So in around some

questions. ask the Yes. question, Pete Thanks for Scott. I'll address to your

it's appreciate great think I question. I No, a it. Scott. Yes,

of the as quarter in initial stepping exceeding thinking Carelon the heard you a teens, in just now First, and year-over-year, XXs. overall. overall, of XX% exceed guidance prepared back low remarks, with very the the to And on trajectory high pleased Services, growth Carelon about growth path

we in to XXXX been as in as prepared externally, say of growing and nice good terms in remarks, that, So growth the continuing really very externally. out seeing the point did feel out traction down proving and we're want and growing good improvement externally, Xx Gail it on I'd I say to I'll XXXX. that. mentioned relates visibility we've and internally And about regard path to that then solutions in internally with that our

your have specifically, to Medicare. products oriented to Medicaid, do yes, relates it question As we

behavioral through. taking those to performance play seeing of overall, some full risk. we relates are We health our And are trends it as

margin are the at profile the by behavioral impacted look trends. we being short health you when So term, the in

We are launched I've of then bit evolves, being improves. we're I the arrangements And as think also margin deploying. it more some past, is on risk the in risk you impacted arrangements, that it by these the in said And it profile we acceleration recall, the compressed. as when early a

grow been the good and business of what's well combination in very in the the long affecting commercial the within X term program us We continuing as is about the to term. short as factors government those So feel business.

Elevance are pursuing like rest We Health. diversified just the a of approach

Whit line of to the go we'll Next, from Leerink Mayo Partners.

follow back go just wanted and up. to I

was actual Like of through question, negatively population? back I what increasingly I through rejoiners the Like gaining actually answer. the not care think point activity Are coming cost rejoiner sure access are the hospital Justin's impacting trend? they it or the on at like care presumptive eligibility look something? the does heard the

some What's very much pull-forward the them trend quarter, some here. improved members have about aim are effect discussions are actuarial that with of certainly you about time. is the adequacy really rates over and thank for various a morning, to Whit, factors of the ongoing. and here. our degrees. follow-up past And of state member There that remaining the ongoing think number process Good think overall to like important and are really the here it's over cost mischaracterization, and the capture ensuring the rate that or certainly, Mark

the point, for embedded factors. the specifically, primarily you you trend quarter, underlying so we that to XX% as being attributed of versus of does here, our the include prudent about On could your think And think approximately think spoke related in that the question of going to is acuity key trend assumptions last portion I'm quarter, could outlook type Medicaid trend same-store utilization. or mix what being the acuity about end cost shift mix. And to about fourth inclusive I as a trend sort of really all as

to Next, line from we'll of go the Fitzgerald. Sarah James Cantor

I and of Mark, not? all a Medicaid that is you states? of if think it to 'XX Or is and soundness some when good was that for can 'XX increases updates actuarial top is just a X-year then Medicaid. Because us we 'XX understand you some target Does position across that rate but the year targeting? pursue guys retroactive a And or you mix said on X-year rate protection, still margins, the on profitable look profitable below a in at a as help is 'XX, period? give midyear you you're

about significantly spoke states Sarah, about margins are between to thank year. acuity. talk note, industry-wide Medicaid to this but extensively. I'm This you timing and going here. on the compress whole for just we much And disconnect expected is simply to the very rates this not question the specifically,

to we're integrating processes, because And of time cetera. are the the our with data, We collaborate partners state's collation proactively state unchanged. continuing that's take the that on to we long-term expectations that's Our rates are going based seeing. acuity into et on know

basis the And time, certainly that actuarial experiencing. confident very will we're otherwise an and appropriately underlying rates over reflect so we're on that acuity

have we achieving And would targets committed that I we're our that them. we out, in certainly to say are set so long-term and confident

business, And very unique Benefits have Thank you. believe that to other business particularly a reiterating, serve specific think very skills Medicaid populations good other I around for our us. we and those. we Health complementary long-term, we just is think to do It's

Medicaid your being as So time-bound again, thank term you see very We and for this questions. long a much industry an issue.

we'll Dave Jefferies. from line Windley Next, the to go of

kind about Caid EPS for try in MA to expect being, and confidence to in the then your respectively, do Medicare, bids the comments growth and be recovery of wanted down? for you I respectively, in achievement mid-single-digit flat next of the understand, cadence or and rate with Medicaid, or the in margins question up, year, Care, to

much the So for very question. you thank

obviously, your pace, we'll at sense it's directional first then Mark give questions a least you some early but for year we'll because commentary still address ask me of this thinking. give Let And 'XX, you Mark? how we're on margins. in to at the

Overall, remain to margins we in Commercial. for XXXX, to strong continue expect,

Let me stop there.

our about. remain side the will long-term we've to really the range, mismatch that spoken margin below here, timing On and predominantly Medicaid margins related that's

being effectively XXXX. XXXX of as to actually them sustainability stable year-over-year. the And product around about Medicare, to XXXX on think we then compared could You because margins in improve our expect positioning,

of America. of we'll to the Next, go line Joanna from Gajuk Bank

being the margin the you next commentary Medicaid margins and year last stable question, made terms year. just commentary on So this just I guess, I for of in guess,

restored. confirmation the guess, you Medicaid I by to Is read be restored? rate be going mismatch end it's fully the of that, to that the the that assume way of end that year, by 'XX, is that will the So

Thanks the for question.

considerations a a XXXX. that Let necessarily looking MLR me but think help that about for we're guidance and share for actually let not And step second modeling today, to you. me back provide few might

items, out-of-period unfavorable intra-year the Medicaid development respect we for And third do again, that to with repeat. quarter, we not expect business. some First, the to had including

about as towards first narrow remember the second acuity for marks expect versus our and you January a could half X progress base we when Commercial right? rates renewal beginning important progresses and rate as an Medicaid also the that story, It's you a year modeling improve. the in is think to business And as to XXXX, half, As continue about the where to that business, we that the through mismatch think major end. of in

beginning also Medicare. We the mark year new a plan of for

intensely and otherwise, we're as line year. provide business to on continue to the head that's next management, So into remaining of individual we focused early say, would it's guidance XXXX. through going appropriate too I medical specific

have mismatch it process to good a feel just periods. the and view data with But And from we're of of the to work taking the prudent on they prior Thanks, again, we're the that, get process be in Medicaid been a states. timing Right. very respectful state and doing. has Mark. the that to their reiterate We want

so update trying to And them on we're seeing. we're what

the it's Medicaid, long but in again, again, particularly on I in confidence wanted prudent a early to take So business timing, our want the state of of in to the term sense we the But give happening some view rates. of our and what's fundamentals.

We'll have one more question, please.

the for of from Deutsche line to And we'll final question, our George Bank. go Hill

that Or the between here could PYD speed like the guess, of concerned And in rates that what could more concentrations drove state of a number I And then on acuity perspective, other there Medicaid. quick should is one, Mark, color we a quarter? is you the couple guess of about resolution concentration discrepancy I be kind follow-ups issue? the and state broad-based? provide here on just the from

in specific into based So that little a are portfolio a and clearly, and states, don't the is I of overall bit in state place. states. different get of serve we programs But terms population mean, we we the your question, manage every on

make diligently I not industry-wide, each everything. this unique this to working states. it very to we Know and across wouldn't are with -- see the So Elevance of again, and across make states sure all is that Health, generalized we just

So very much thank you for the question.

the joining are on for confident you, growth strong first that making to that think interest has of say I to I the everyone, long Elevance right term emerge line. we're confident just position everyone we're interest in for thank turn, Elevance you us unprecedented sustainable all support thank and to over we we're you, investments who reiterate, all, from and this to, we'll Thank now Health for And you and and want the stronger. of thank been call. this on the period going your even for Health, and of change operator,

available recording a conference after today gentlemen, will through a.m. and of for replay Ladies be November XX, XXXX. XX:XX this

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