Financial Data and Key Metrics Changes - The company reported third quarter adjusted EPS of $0.50, exceeding previous expectations, and increased the full-year adjusted EPS forecast to at least $2 from $1.75 [5][28] - Premium and service revenue for the third quarter reached $44.9 billion, while GAAP loss per share was $13.50 due to a $6.7 billion non-cash goodwill impairment charge [28][35] - The adjusted effective tax rate was temporarily low, contributing approximately $0.10 to adjusted EPS, with a full-year tax rate expectation of 20% to 21% [28][11] Business Line Data and Key Metrics Changes - The Medicaid segment achieved a third quarter HBR of 93.4%, showing sequential improvement, aided by a $150 million revenue adjustment from Florida's Children's Medical Services [11][29] - The Marketplace segment ended the quarter with approximately 5.8 million members, slightly better than expectations, despite experiencing medical cost pressure [16][28] - The Medicare segment's HBR was reported at 94.3%, consistent with expectations, with Medicare Advantage and PDP results aligning with the updated outlook [20][21] Market Data and Key Metrics Changes - The company anticipates a 2025 Medicaid composite rate adjustment of roughly 5.5%, up from earlier estimates [8] - The Marketplace pricing for 2026 averaged in the mid-30% range, reflecting adjustments for baseline morbidity and expected risk pool shifts [17][68] - The company expects a market contraction for 2026 in the high teens to mid-30s range, influenced by the expiration of eAPTCs and program integrity measures [44][48] Company Strategy and Development Direction - The company is focused on margin recovery over membership growth, particularly in the Marketplace segment, and has positioned itself for margin improvement in 2026 [24][56] - Continued advocacy for improved Medicaid rates and clinical management strategies are key components of the company's strategy to enhance profitability [12][61] - The company plans to provide detailed 2026 guidance in early February, emphasizing operational improvements and efficiency gains [24][25] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the overall performance of the business despite challenges in the operating environment, particularly in Medicaid and Marketplace segments [11][23] - The company is closely monitoring the impact of potential changes in eAPTCs and program integrity measures on its business outlook [18][44] - Management highlighted the importance of maintaining strong relationships with state partners to navigate the evolving healthcare landscape [15][62] Other Important Information - The company reported a strong cash flow from operations of $1.4 billion in Q3, with unregulated cash on hand at $357 million [36] - Medical claims liability totaled $21.5 billion, representing 48 days in claims payable, an increase of one day compared to the previous quarter [36] - The company is prepared for potential market changes and is actively engaging in outreach to members regarding insurance options [48][50] Q&A Session Summary Question: How does the company ensure stability in the Marketplace amid competitor exits? - Management noted a slight uptick in utilization in September and emphasized the importance of data-driven decisions for 2026 pricing, which accounts for various risk factors [39][41] Question: What strategies are in place to re-engage members during open enrollment? - The company is prepared to mobilize marketing efforts and broker relationships to recapture members who may not initially re-engage [46][48] Question: What is the outlook for Medicaid profitability given potential work requirements? - Management indicated that while there may be some membership attrition, they do not expect significant impacts on overall margin profiles for 2026 [52][63] Question: How does the company view competitive positioning for 2026? - Management expects to maintain a competitive edge with a focus on margin recovery, despite anticipated market contraction [54][56]

Financial Data and Key Metrics Changes - The company reported third quarter adjusted EPS of $0.50, exceeding previous expectations, and increased the full-year adjusted EPS forecast to at least $2 from $1.75 [5][28] - Premium and service revenue for the quarter was $44.9 billion, with a GAAP loss per share of $13.50 due to a $6.7 billion non-cash goodwill impairment charge [28][35] - The adjusted effective tax rate was temporarily low, contributing approximately $0.10 to adjusted EPS, with an expected full-year tax rate of 20% to 21% [28][11] Business Line Data and Key Metrics Changes - Medicaid segment reported a Q3 HBR of 93.4%, showing sequential improvement aided by a $150 million positive revenue adjustment from Florida's Children's Medical Services [11][28] - The Medicare segment, including Medicare Advantage and PDP, performed in line with expectations, with a reported HBR of 94.3% [20][28] - Marketplace membership ended the quarter at approximately 5.8 million, slightly better than expectations, despite experiencing medical cost pressure [16][28] Market Data and Key Metrics Changes - The company anticipates a 2025 Medicaid composite rate adjustment of roughly 5.5%, up from earlier estimates [9] - The Marketplace segment is preparing for potential market contraction in the high teens to mid-30s range due to the expiration of EAPTCs [54][56] - The Medicare Advantage segment is on track for break-even by 2027, with continued focus on improving STAR ratings [22][23] Company Strategy and Development Direction - The company is focused on margin recovery over membership growth, particularly in the Marketplace segment for 2026 [56] - Continued advocacy for improved Medicaid rates and clinical management strategies are key components of the company's strategy to enhance profitability [12][15] - The company plans to provide detailed 2026 guidance in early February, emphasizing operational improvements and margin expansion [24][25] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the overall performance of the business despite challenges in the operating environment, particularly in Medicaid and Marketplace segments [11][12] - The company is closely monitoring trends in Medicaid and Marketplace utilization, with proactive measures in place to address potential cost pressures [14][40] - Management highlighted the importance of maintaining quality care while being responsible stewards of taxpayer dollars [26][15] Other Important Information - The company experienced a strong cash flow of $1.4 billion in Q3, with unregulated cash on hand at $357 million [36] - The company is prepared for potential changes in the policy landscape, particularly regarding EAPTCs and Medicaid work requirements [51][52] - The company is committed to enhancing member experience through improved digital tools and resources [21][22] Q&A Session Summary Question: How does the company ensure stability in the Marketplace amid competitor exits? - Management noted a slight uptick in utilization in September and emphasized the importance of data-driven decisions for 2026 pricing, which accounts for various risk factors [39][41] Question: What strategies are in place to re-engage members during open enrollment? - The company is prepared to mobilize marketing efforts and broker relationships to recapture members who may not initially re-engage [46][48] Question: What is the outlook for Medicaid profitability given potential work requirements? - Management indicated that while there may be some membership attrition, they do not expect significant impacts on overall margin profiles for 2026 [52][53] Question: How does the company view competitive positioning for 2026? - Management expects to maintain a competitive edge with a focus on margin recovery, despite potential market contraction [54][56] Question: What are the expectations for the Medicare segment in 2026? - The company anticipates continued progress towards break-even in Medicare Advantage and is focused on enhancing PDP positioning [56][57]

Financial Data and Key Metrics Changes - The company reported adjusted earnings per share of $5.48 on premium revenue of $10.9 billion for Q2 2025 [6][28] - The consolidated Medical Care Ratio (MCR) was 90.4%, reflecting a challenging medical cost trend environment, with a year-to-date MCR of 89.8% [7][28] - The adjusted pre-tax margin was 3.3% for Q2, with a year-to-date margin of 3.6% [7][28] Business Line Data and Key Metrics Changes - In Medicaid, the MCR was 91.3%, above the long-term target range, with ongoing medical cost pressures in behavioral health, pharmacy, and inpatient care [7][29] - The Medicare segment reported an MCR of 90%, also above the long-term target range, driven by higher utilization among high-acuity populations [10][29] - The Marketplace segment had an MCR of 85.4%, significantly higher than expected, influenced by new store impacts and member reconciliations [11][30] Market Data and Key Metrics Changes - The company noted unprecedented medical cost increases across all segments, with behavioral health costs rising due to increased demand and supply-side constraints [8][94] - The overall market risk pool is trending higher, with an 8% increase in acuity year-over-year, affecting risk adjustment [56][95] Company Strategy and Development Direction - The company aims to achieve premium revenue of approximately $46 billion in 2026 and $52 billion in 2027, focusing on growth in current markets and recent Medicaid and Medicare dual RFP wins [19][20] - The company is strategically focused on managing costs and advocating for appropriate rate adjustments in Medicaid to restore funding levels [15][16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to manage costs despite the challenging environment, noting that the dislocation between rates and trends in Medicaid is temporary [25][26] - The company anticipates modest impacts from the recently passed budget bill, with gradual changes expected in the Medicaid program [21][22] Other Important Information - The full-year 2025 premium revenue guidance remains unchanged at approximately $42 billion, with adjusted earnings per share guidance revised to no less than $19 [11][35] - The company continues to have a strong capital foundation, with a cash balance of approximately $100 million at the end of the quarter [32][33] Q&A Session Summary Question: Confidence in Medicaid margins improvement despite higher reimbursement rates - Management indicated that observed trends are slightly outpacing known rates, but previous guidance included rate adjustments for Q3 and Q4, which should help [44][46] Question: Required premium increases for ACA to account for trends - Management stated that rate models must catch up with underperformance and include a healthy dose of medical cost trend adjustments [48][49] Question: Adjustments to marketplace pricing in light of recent trends - Management noted that states are allowing more flexibility in pricing adjustments this year, with ongoing discussions about trend assumptions [52][54] Question: Understanding elevated trends across products - Management explained that the increase in trends is due to a combination of higher prevalence of conditions, pent-up demand post-pandemic, and supply-side factors [92][94] Question: Timing of rate updates and achieving target margins - Management emphasized the importance of using a recent baseline for rate updates to capture cost inflections and expressed hope for adequate trend inclusion in future rates [97][98]

Financial Data and Key Metrics Changes - The company reported adjusted earnings per share of $5.48 on premium revenue of $10.9 billion for Q2 2025 [4][5] - The consolidated Medical Care Ratio (MCR) was 90.4%, reflecting a challenging medical cost trend environment, with a year-to-date MCR of 89.8% [5][25] - The adjusted pre-tax margin for Q2 was 3.3%, with a year-to-date margin of 3.6% [5][25] Business Line Data and Key Metrics Changes - In Medicaid, the MCR was 91.3%, above the long-term target range, with ongoing medical cost pressures in behavioral health, pharmacy, and inpatient/outpatient care [5][6][25] - The Medicare segment reported an MCR of 90%, also above the long-term target range, driven by higher utilization among high acuity populations [8][26] - The Marketplace segment had an MCR of 85.4%, significantly higher than expected, influenced by new store impacts and member reconciliations [9][27] Market Data and Key Metrics Changes - The company anticipates full-year premium revenue guidance to remain unchanged at approximately $42 billion, with adjusted earnings per share guidance revised to no less than $19 [10][31] - The Medicaid MCR guidance was raised from 89.9% to 90.9%, reflecting the expectation that trends will exceed rates [31][32] - The Marketplace MCR guidance was increased from 80% to 85%, accounting for prior year reconciliations and new store impacts [34] Company Strategy and Development Direction - The company aims to achieve premium revenue targets of $46 billion in 2026 and $52 billion in 2027, focusing on growth in current markets and recent Medicaid and Medicare dual RFP wins [17][18] - The company is strategically focused on managing costs and maintaining profitability despite the challenging operating environment [24][36] - The company plans to prioritize margin stability over growth in the Marketplace segment, limiting its exposure to 10% of the portfolio [16][34] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to manage medical cost trends and maintain profitability despite the challenging environment [24][36] - The company anticipates gradual impacts from the recently passed budget bill on Medicaid membership and risk pool acuity [19][20] - Management acknowledged the unprecedented medical cost increases and emphasized the importance of effective cost control protocols [6][8] Other Important Information - The company reported a strong capital foundation, with a cash balance of approximately $100 million and reduced debt levels [29] - The adjusted G&A ratio for the quarter was 6.1%, reflecting lower incentive compensation and continued productivity enhancements [9][28] - The company is actively pursuing M&A opportunities in the current challenging environment [18] Q&A Session Summary Question: Confidence in Medicaid margins improvement - Management indicated that observed trends are slightly outpacing known rates, but they have factored in previous guidance for rate updates [40][41] Question: Required premium increases for ACA - Management stated that rate models must account for underperformance and medical cost trends, with a significant increase in trend assumptions from 7% to 11% [44][45] Question: Marketplace pricing adjustments - Management noted that states are allowing more flexibility in pricing adjustments this year, with ongoing discussions about trend assumptions and acuity shifts [49][50] Question: Market-wide enrollment decline in 2026 - Management refrained from providing specific projections but acknowledged that the dynamics vary significantly by state [56][59] Question: Elevated trends across products - Management explained that the elevated trends are driven by increased prevalence of conditions and pent-up demand post-pandemic, affecting all segments [90][92]

Core Viewpoint - Elevance Health, Inc. is facing a class action lawsuit due to alleged misleading statements and failure to disclose adverse facts regarding its business operations and financial guidance during the Class Period from April 18, 2024, to October 16, 2024 [1][4]. Financial Performance - On July 17, 2024, Elevance announced an expected increase in Medicaid utilization, which led to a stock price drop of $32.21, or 5.8%, closing at $520.93 per share [2]. - On October 17, 2024, Elevance reported third quarter 2024 financial results, missing EPS consensus estimates by 13.7% and lowering its EPS guidance for 2024 by 11.3%, resulting in a further stock price decline of $52.61, or 10.6%, to close at $444.35 per share [3]. Lawsuit Details - The class action complaint alleges that Elevance's management made materially false and misleading statements and failed to disclose significant adverse facts, including the higher costs associated with sicker patients remaining on Medicaid and inadequate reflection of these costs in financial guidance [4]. - Investors who purchased Elevance common stock during the Class Period have until July 11, 2025, to file a lead plaintiff motion in the lawsuit [5].