Elevance Health is a leading health insurer in the United States, providing services to over 46 million medical members through its affiliated health plans **[0001156039-24-000066_elv-20240331.htm:39]** **[0001156039-24-000122_elv-20240930.htm:43]** **[0001156039-24-000104_elv-20240630.htm:41]**. The company operates under several core brands, including Anthem Blue Cross/Anthem Blue Cross and Blue Shield, Wellpoint, and Carelon, and organizes its business activities into four main segments **[0001156039-24-000066_elv-20240331.htm:39]** **[0001156039-24-000122_elv-20240930.htm:43]** **[0001156039-24-000104_elv-20240630.htm:41]**. Elevance Health offers a wide range of health plans and services, pharmacy services, and healthcare-related services, contributing significantly to its overall revenue **[0001156039-24-000122_elv-20240930.htm:39]** **[0001156039-24-000066_elv-20240331.htm:36]** **[0001156039-24-000015_elv-20231231.htm:213]**.

1. **Health Benefits Segment** - Offers a comprehensive suite of health plans and services to various members, including Individual, Employer Group risk-based, Employer Group fee-based, BlueCard, Medicare, Medicaid, and Federal Employees Health Benefits (FEHB) program members. Includes specialty and other insurance products such as stop loss, dental, vision, and supplemental health insurance benefits **[0001156039-24-000122_elv-20240930.htm:39]** **[0001156039-24-000066_elv-20240331.htm:36]**.
   
2. **CarelonRx Segment** - Provides pharmacy services to both affiliated health plan customers and external customers. Offers a comprehensive pharmacy services portfolio, including home delivery, specialty pharmacies, claims adjudication, formulary management, pharmacy networks, and infusion services **[0001156039-24-000122_elv-20240930.htm:39]** **[0001156039-24-000066_elv-20240331.htm:36]**.

3. **Carelon Services Segment** - Integrates various healthcare-related services, including utilization management, behavioral health, integrated care delivery, palliative care, payment integrity services, and health and wellness programs. Includes Carelon Global Solutions, which provides data management, information technology, and business operations services **[0001156039-24-000066_elv-20240331.htm:36]** **[0001156039-24-000015_elv-20231231.htm:213]**.

4. **Corporate & Other Segment** - Encompasses businesses that do not individually meet the quantitative threshold for an operating segment, as well as corporate expenses not allocated to other segments **[0001156039-24-000066_elv-20240331.htm:36]** **[0001156039-24-000015_elv-20231231.htm:213]**.

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52d606a1ee6db970ccadc3c7407738235bc985d6d0eac30934c26061c2c724e4

| Segment/Metric [Unit: $ Million] | Q4 2022 | Q1 2023 | Q2 2023 | Q3 2023 | Q4 2023 | Q1 2024 | Q2 2024 | Q3 2024 |
|----------------------------------|---------|---------|---------|---------|---------|---------|---------|---------|
| Health Benefits                  | N/A     | **37,280**  **[0001193125-23-105591_d490195dex991.htm:1]**  | **38,000**  **[0001193125-23-189147_d528939dex991.htm:1]**  | **36,744**  **[0001156039-23-000109_elv-20230930.htm:45]**  | **36,500**  **[0001193125-24-013498_d736006dex991.htm:2]**  | **37,258**  **[0001156039-24-000066_elv-20240331.htm:51]**  | **37,200**  **[0001156039-24-000101_a2q2024elvearningsrelease.htm:1]**  | **38,300**  **[0001156039-24-000119_a3q2024elvearningsrelease.htm:1]**  |
| CarelonRx                        | **7,523**  **[0001193125-23-014676_d418386dex991.htm:3]**  | **8,024**  **[0001193125-23-105591_d490195dex991.htm:1]**  | **8,466**  **[0001156039-23-000088_elv-20230630.htm:43]**  | **8,518**  **[0001156039-23-000109_elv-20230930.htm:45]**  | **8,800**  **[0001193125-24-013498_d736006dex991.htm:3]**  | **8,067**  **[0001156039-24-000066_elv-20240331.htm:37]**  | **8,800**  **[0001156039-24-000101_a2q2024elvearningsrelease.htm:6]**  | **9,100**  **[0001156039-24-000122_elv-20240930.htm:40]**  |
| Carelon Services                 | **3,410**  **[0001193125-23-014676_d418386dex991.htm:3]**  | **3,312**  **[0001193125-23-105591_d490195dex991.htm:1]**  | **3,441**  **[0001156039-23-000088_elv-20230630.htm:43]**  | **3,374**  **[0001156039-23-000109_elv-20230930.htm:45]**  | **3,600**  **[0001193125-24-013498_d736006dex991.htm:3]**  | **4,009**  **[0001156039-24-000066_elv-20240331.htm:37]**  | **4,500**  **[0001156039-24-000101_a2q2024elvearningsrelease.htm:6]**  | **4,600**  **[0001156039-24-000122_elv-20240930.htm:40]**  |
| Corporate & Other                | N/A     | **251**  **[0001193125-23-105591_d490195dex991.htm:1]**  | **287**  **[0001156039-23-000088_elv-20230630.htm:43]**  | **242**  **[0001156039-23-000109_elv-20230930.htm:45]**  | N/A     | **127**  **[0001156039-24-000066_elv-20240331.htm:37]**  | **122**  **[0001156039-24-000101_a2q2024elvearningsrelease.htm:6]**  | **74**  **[0001156039-24-000122_elv-20240930.htm:40]**  |
| Eliminations                     | **(6,262)**  **[0001193125-23-014676_d418386dex991.htm:3]**  | **(6,969)**  **[0001193125-23-105591_d490195dex991.htm:1]**  | **(6,817)**  **[0001156039-23-000088_elv-20230630.htm:43]**  | **(6,398)**  **[0001156039-23-000109_elv-20230930.htm:45]**  | N/A     | **(7,188)**  **[0001156039-24-000066_elv-20240331.htm:37]**  | **(7,400)**  **[0001156039-24-000101_a2q2024elvearningsrelease.htm:6]**  | **(7,400)**  **[0001156039-24-000122_elv-20240930.htm:40]**  |
| Total Operating Revenue          | **39,667**  **[0001193125-23-014676_d418386dex991.htm:3]**  | **41,898**  **[0001193125-23-105591_d490195dex991.htm:1]**  | **43,377**  **[0001156039-23-000088_elv-20230630.htm:43]**  | **42,480**  **[0001156039-23-000109_elv-20230930.htm:45]**  | **42,500**  **[0001193125-24-013498_d736006dex991.htm:0]**  | **42,273**  **[0001156039-24-000066_elv-20240331.htm:37]**  | **43,200**  **[0001156039-24-000101_a2q2024elvearningsrelease.htm:0]**  | **44,700**  **[0001156039-24-000122_elv-20240930.htm:40]**  |

cb8ab963c7e1d0587664d9579bd7824729205b7d391850ecd9d148627d1d5527

1. Given the ongoing pressures on Medicaid margins due to the mismatch between rates and member acuity and your expectation that these pressures will continue through 2025  **[ELV_3402953_5]** **[ELV_3402953_20]** **[ELV_3402953_6]** , what specific actions are you taking to realign rates with acuity more quickly, and how confident are you in returning Medicaid margins to your target range?

2. Your long-term goal is to achieve at least 12% annual EPS growth  **[ELV_3402953_5]** **[ELV_3402953_6]** , but with a mid-single-digit EPS growth outlook for 2025 and continued Medicaid margin pressures  **[ELV_3402953_5]** **[ELV_3402953_6]** , how do you plan to accelerate earnings growth in 2026 and 2027 to meet this target, and should investors expect any adjustments to your long-term growth algorithm?

3. With the decline in the percentage of Medicare Advantage members in plans rated 4 stars or higher due to higher cut points and a major contract narrowly missing 4 stars by 0.0004  **[ELV_3402953_2]** , what strategies are you implementing to improve star ratings, and how might this impact your competitiveness and revenue growth in the Medicare Advantage market?

4. Considering increased utilization trends in Medicare, including pressures from the Two-Midnight Rule and a late summer surge in COVID  **[ELV_3402953_9]** , how are you adjusting your pricing and cost management strategies for 2025 to account for these trends, and what impact do you anticipate on your Medicare margins?

5. CarelonRx's strong performance included a one-time favorable revenue adjustment, and specialty pharmacy trends increased as expected  **[ELV_3402953_13]** ; can you discuss the sustainability of CarelonRx's earnings growth in the face of rising specialty drug costs, and how does this align with your long-term margin expectations for the segment?

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d4fbe7dc30a91916b52434dd17662ae2184c3bbb99a86468fdb0607a1122fd89

Total Revenue [USD, Millions]

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R&D [USD, Millions]

D&A [USD, Millions]

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EPS - Diluted [USD]

6b5b17efbaa3f49fd81e2a48d62ae2181c1266d01528242487d524adbf13f720

Adjustments for Non-Cash Items

Stock-Based Compensation

Changes in Working Capital

Capital Expenditures (CapEx)

Proceeds from / Repayments of Debt

Share Repurchases

Dividend Payments

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42ecd43ae905c2dbac3def09bf7cc213a070f067f29ffa6ca991b9125a8545a3

1. **Medicare Advantage Growth and Margins**  
   **Q:** Can you clarify your Medicare Advantage growth and margin outlook?  
   **A:** Elevance Health expects Medicare Advantage enrollment growth of **7% to 9%** in 2025, driven by strong member retention and strategic group membership growth.  **[ELV_3413107_6]** **[ELV_3413107_10]**  Individual MA growth is in line with expectations, and the company is confident in maintaining margins through disciplined cost management and product positioning.  **[ELV_3413107_6]** **[ELV_3413107_10]**  They do not anticipate significant growth beyond current levels for the rest of the year but expect strong retention.  **[ELV_3413107_10]** 

2. **Medicaid Trends and MLR Guidance**  
   **Q:** What are your expectations for Medicaid trends and MLR in 2025?  
   **A:** Medicaid cost trends are expected to remain elevated in the first half of 2025, particularly in behavioral health and inpatient services.  **[ELV_3413107_7]** **[ELV_3413107_8]**  Current rates have not fully caught up to these cost trends, so Elevance Health is taking a prudent stance on how quickly Medicaid margins will rebound.  **[ELV_3413107_8]**  They anticipate improvement in the second half as rate adjustments take effect but expect margins to remain below long-term targets in the near term.  **[ELV_3413107_8]** 

3. **Commercial Cost Trends and Pricing**  
   **Q:** How are commercial cost trends impacting your pricing and margins?  
   **A:** Commercial performance remained strong, with cost trends developing as expected and priced accordingly.  **[ELV_3413107_7]** **[ELV_3413107_17]**  The company anticipates commercial cost trends to stay above historical averages in 2025 but has accounted for this in their pricing strategy.  **[ELV_3413107_13]** **[ELV_3413107_17]**  Retention is strong, pricing is disciplined, and margins remain robust.  **[ELV_3413107_13]** **[ELV_3413107_17]** 

4. **Impact of Part D Redesign on MLR**  
   **Q:** What is the impact of the Part D redesign on your MLR?  
   **A:** For 2025, Elevance Health is guiding to a Medical Loss Ratio (MLR) of **89.1%**, approximately **60 basis points** higher than the prior year at the midpoint.  **[ELV_3413107_9]**  This increase is driven by strategic growth in Medicare, including Part D changes, acquisitions, and a prudent view on medical cost trends.  **[ELV_3413107_9]**  The Part D redesign has increased the direct subsidy, contributing to a higher MLR.  **[ELV_3413107_9]** 

5. **Carelon Growth and Margins**  
   **Q:** What are your growth expectations for Carelon and its impact on margins?  
   **A:** Carelon Services is expected to grow over a **30%** Compound Annual Growth Rate (CAGR) since 2022, significantly above the original target range.  **[ELV_3413107_15]**  This accelerated growth, including over **50%** growth in the services segment, is positive for earnings but shifts near-term margin dynamics as newer capabilities take time to reach mature margins.  **[ELV_3413107_9]** **[ELV_3413107_15]**  Organic growth outside of acquisitions like CareBridge is well above **20%**.  **[ELV_3413107_9]** 

6. **Advanced Rate Notice and Regulatory Implications**  
   **Q:** How do you view the recent MA rate notice and its implications?  
   **A:** Elevance Health is pleased with the direction of the advanced Medicare Advantage rate notice, seeing it as progress toward more adequate funding.  **[ELV_3413107_16]**  However, they believe it is still insufficient given the cost trends observed over the past year.  **[ELV_3413107_16]**  They look forward to working with the administration on recommended changes, particularly regarding reforms in the Part D risk model.  **[ELV_3413107_16]** 

7. **Long-term Margin Targets**  
   **Q:** Have your long-term margin targets changed?  
   **A:** While Elevance Health remains committed to its long-term financial targets, faster-than-projected growth in Carelon has shifted near-term margin dynamics.  **[ELV_3413107_15]** **[ELV_3413107_19]**  The company acknowledges that business mix and timing have changed due to accelerated Carelon growth, but they remain confident in the embedded earnings power of their businesses.  **[ELV_3413107_15]** **[ELV_3413107_19]** 

8. **Acquisition Strategy**  
   **Q:** What are your priorities for acquisitions going forward?  
   **A:** Elevance Health focuses on enhancing capabilities that deliver whole health solutions, affordability, and improved patient experiences.  **[ELV_3413107_11]**  They are interested in areas like specialty trends, data fragmentation, and opportunities in technology and data to enhance the overall experience.  **[ELV_3413107_11]**  The company maintains a strategy of identifying areas of complexity and solving them with differentiated, risk-based solutions.  **[ELV_3413107_11]** 

9. **Seasonality and Earnings Guidance**  
   **Q:** What is your expected earnings seasonality for 2025?  
   **A:** Adjusted earnings per share are expected to be weighted more toward the first half of the year, with slightly more than **60%** of full-year earnings occurring in that period.  **[ELV_3413107_12]**  Within the first half, a little more than half of those earnings are anticipated in the first quarter.  **[ELV_3413107_12]**  This reflects typical seasonal dynamics and the evolving business mix.  **[ELV_3413107_12]** 

10. **Exchanges and Subsidies**  
    **Q:** What are your expectations for the ACA exchanges and subsidies?  
    **A:** Elevance Health is pleased with the performance of its ACA exchange business and is expanding into additional markets.  **[ELV_3413107_18]**  They acknowledge the possibility of subsidy reductions or eliminations, which could shrink the market.  **[ELV_3413107_18]**  However, they believe the exchange business remains solid and complementary to their overall strategy.  **[ELV_3413107_18]**  Effectuation rates have been consistent with prior years, and guidance incorporates conservative assumptions.  **[ELV_3413107_18]** 

11. **Puerto Rico Business Performance**  
    **Q:** How is your Puerto Rico business performing?  
    **A:** The company made strategic decisions to reduce supplemental benefits to balance margin and membership in Puerto Rico.  **[ELV_3413107_21]**  This resulted in solid success, stabilizing the environment in 2024.  **[ELV_3413107_21]**  They feel well-positioned strategically in Puerto Rico and are continuing the same strategy into 2025.  **[ELV_3413107_21]** 

12. **Medicare Advantage Distribution Actions**  
    **Q:** What actions have you taken on MA distribution that affect growth?  
    **A:** Elevance Health has been strategic in targeting growth by marketplace, geography, and product, focusing on individual MA and duals business.  **[ELV_3413107_13]** **[ELV_3413107_20]**  They have achieved strong retention and are prudent about future growth.  **[ELV_3413107_13]** **[ELV_3413107_20]**  The company emphasizes that growth aligns with their capabilities and long-term strategy.  **[ELV_3413107_20]** 

13. **Commercial ASO Revenue Guidance**  
    **Q:** Why is your ASO fee revenue guidance flat despite membership growth?  
    **A:** The flat fee revenue guidance is due to a shift from fee-based to risk-based contracts within Carelon Services.  **[ELV_3413107_14]**  A portion of new wins and expansions are expected to convert to risk-based arrangements, with revenue recorded as premium rather than service fees.  **[ELV_3413107_14]** 

14. **Expectations for Commercial Cost Trends**  
    **Q:** What are your commercial cost trend expectations for 2025?  
    **A:** The company expects commercial cost trends to remain above historical averages but has priced accordingly.  **[ELV_3413107_13]** **[ELV_3413107_17]**  Key cost drivers include inpatient medical and outpatient emergency services.  **[ELV_3413107_17]**  They plan to expand margins through product mix and increased penetration of specialty products.  **[ELV_3413107_17]** 

15. **Medicaid Rate Updates and Margins**  
    **Q:** How are Medicaid rate updates affecting your margins?  
    **A:** Approximately **41%** of Medicaid members had rates tied to January updates, which came in line with expectations but were insufficient.  **[ELV_3413107_14]**  Elevance Health is working with state partners to obtain actuarially sound rates.  **[ELV_3413107_14]**  July rates will be critical, and they expect strong improvement in Medicaid margins in the back half of the year.  **[ELV_3413107_14]** 

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25819af4421bed792031e7715e025e91fb88df85447460d7f57bd4590c94828b

### Q3 2024 Earnings Call
- **Issued Period:** Q3 2024
- **Guided Period:** FY 2024 and FY 2025
- **Guidance:**
  - **Adjusted Diluted EPS:** Reduced to approximately **$33** due to elevated medical costs in the Medicaid business  **[ELV_3402953_4]** **[ELV_3402953_1]** .
  - **Benefit Expense Ratio:** Expected to be more than **100 basis points higher**, approximately **88.5%**  **[ELV_3402953_4]** .
  - **Operating Cash Flow:** Expected to be approximately **$4.5 billion**  **[ELV_3402953_4]** .
  - **2025 Outlook:**
    - **Adjusted EPS Growth:** At least in the **mid-single-digit percent range**  **[ELV_3402953_5]** .
    - **Revenue Growth:** In line with the long-term growth algorithm in the **high single-digit percent range**  **[ELV_3402953_5]** .
    - **Medicaid Margins:** Expected to remain below the long-term target  **[ELV_3402953_6]** .
  - **Long-term Growth:** At least **12% growth** in adjusted diluted EPS annually on average over time  **[ELV_3402953_5]** .

### Q2 2024 Earnings Call
- **Issued Period:** Q2 2024
- **Guided Period:** FY 2024
- **Guidance:**
  - **Adjusted Diluted EPS:** Reaffirmed at least **$37.20**, representing **12% growth year-over-year**  **[ELV_3393388_1]** .
  - **Enterprise Operating Margin Target:** **6.5% to 7% by 2027**  **[ELV_3393388_4]** .
  - **Benefit Expense Ratio:** Expected in the upper half of the initial range, **87% to 87.5%**  **[ELV_3393388_14]** .
  - **Operating Revenue Growth:** Upper single-digit growth  **[ELV_3393388_3]** .
  - **Capital Deployment:** Expected to deliver one-third of the targeted adjusted diluted EPS growth rate  **[ELV_3393388_4]** .
  - **Operating Cash Flow:** Slightly north of **$7 billion**  **[ELV_3393388_17]** .

### Q1 2024 Earnings Call
- **Issued Period:** Q1 2024
- **Guided Period:** FY 2024
- **Guidance:**
  - **Adjusted EPS:** Increased by $0.10 to be greater than **$37.20**  **[ELV_3379995_1]** **[ELV_3379995_11]** .
  - **Long-term Adjusted EPS Growth:** **12% to 15% CAGR** through 2027  **[ELV_3379995_14]** .
  - **Seasonality of Adjusted Diluted EPS:** Approximately **55%** of earnings in the first half of the year  **[ELV_3379995_12]** .
  - **Operating Cash Flow:** At least **$8.1 billion**  **[ELV_3379995_21]** .
  - **Days in Claims Payable (DCP):** Mid- to upper **40s** range  **[ELV_3379995_20]** .

### Q4 2023 Earnings Call
- **Issued Period:** Q4 2023
- **Guided Period:** FY 2024
- **Guidance:**
  - **Adjusted Diluted EPS:** Greater than **$37.10**, reflecting at least **12% growth**  **[ELV_3370674_5]** .
  - **Total Medical Membership:** **45.8 million to 46.6 million**, down approximately **750,000** year-over-year  **[ELV_3370674_5]** .
  - **Medicaid Membership:** **8.8 million to 9.2 million**, with a net loss of approximately **930,000** members  **[ELV_3370674_5]** .
  - **Commercial Membership:** Growth of over **750,000**, ending in the range of **32.4 million to 32.8 million**  **[ELV_3370674_5]** .
  - **Medicare Advantage Membership:** Expected to be approximately flat  **[ELV_3370674_5]** .
  - **Operating Revenue:** Flat to up low single digits  **[ELV_3370674_5]** .
  - **Operating Earnings:** At least **$10.3 billion**, reflecting **9% growth**  **[ELV_3370674_5]** .
  - **Benefit Expense Ratio:** Flat at **87%**, plus/minus **50 basis points**  **[ELV_3370674_8]** .
  - **Operating Cash Flow:** Includes impact of approximately **$300 million** of state-based payments  **[ELV_3370674_4]** .
  - **Dividend:** **10.1%** increase, raising it to **$1.63** per share  **[ELV_3370674_6]** .

0557dd84fc703a10d81dd0a5c5a968c3677728c1d274d187337251acf3fb55e5

Elevance Health projects 7–9% Medicare Advantage growth in 2025 while guiding MLR up 60bps to 89.1%. Carelon’s 30%+ CAGR accelerates top-line but shifts margins. Management anticipates Medicaid cost relief in 2H25, reinforcing confidence in long-term earnings power.

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23794d91c53ae875c8e247d72561e35d9d06ee07c70c9e0dbcc977a6d161504a

| Name                  | Position                                                      | Start Date         | Short Bio                                                                                                                                                                                                 |
|-----------------------|---------------------------------------------------------------|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Gail K. Boudreaux     | President and Chief Executive Officer                         | November 2017      | Gail K. Boudreaux has served as the President and CEO of Elevance Health since November 2017. She previously led GKB Global Health, LLC, and held executive roles at UnitedHealth Group and Aetna, Inc.  **[0001156039-24-000015_elv-20231231.htm:43]** **[0001156039-24-000050_elv-20240329.htm:19]** .                                |
| Mark B. Kaye          | Executive Vice President and Chief Financial Officer          | November 1, 2023   | Mark B. Kaye joined Elevance Health as EVP and CFO on November 1, 2023. He was previously EVP and CFO at Moody's Corporation and held senior roles at Massachusetts Mutual Life Insurance and Voya Financial  **[0001156039-24-000015_elv-20231231.htm:43]** **[0001156039-24-000050_elv-20240329.htm:43]** .                           |
| Peter D. Haytaian     | Executive Vice President and President, Carelon and CarelonRx | October 2021       | Peter D. Haytaian has been EVP and President of Carelon and CarelonRx since October 2021. He joined Elevance Health in 2012 and has held various leadership roles, including President of the Medicaid business  **[0001156039-24-000015_elv-20231231.htm:44]** **[0001156039-23-000007_elv-20221231.htm:41]** .                        |
| Charles M. Kendrick, Jr. | Executive Vice President and President, Commercial & Specialty Health Benefits | October 2021 | Charles M. Kendrick, Jr. has served as EVP and President of Commercial & Specialty Health Benefits since October 2021. He joined the company in 1995 and has held numerous leadership roles  **[0001156039-24-000015_elv-20231231.htm:44]** **[0001156039-23-000007_elv-20221231.htm:42]** .                                             |
| Ratnakar V. Lavu      | Executive Vice President and Chief Digital Information Officer | February 5, 2024   | Ratnakar V. Lavu will join Elevance Health as EVP and Chief Digital Information Officer on February 5, 2024. He previously served as Global Chief Digital Information Officer at Nike, Inc.  **[0001156039-24-000015_elv-20231231.htm:44]** .                                                |
| Felicia F. Norwood    | Executive Vice President and President, Government Health Benefits | June 2018       | Felicia F. Norwood has been EVP and President of Government Health Benefits since June 2018. She was previously Director of The Department of Healthcare and Family Services for Illinois and held leadership roles at Aetna  **[0001156039-24-000015_elv-20231231.htm:43]** **[0001156039-24-000015_elv-20231231.htm:44]** .            |
| Blair W. Todt         | Executive Vice President and Chief Legal and Administrative Officer | November 2020   | Blair W. Todt has served as EVP and Chief Legal Officer since November 2020 and was promoted to Chief Administrative Officer in April 2023. He previously held leadership roles at Health Care Service Corporation and WellCare Health Plans  **[0001156039-24-000015_elv-20231231.htm:44]** **[0001156039-24-000050_elv-20240329.htm:43]** **[0001156039-23-000007_elv-20221231.htm:42]** . |
| Ronald W. Penczek     | Chief Accounting Officer and Controller                        | December 2015      | Ronald W. Penczek has been the Chief Accounting Officer and Controller since December 2015. He joined Elevance Health in 2005 and has held various finance roles, including Vice President and Controller  **[0001156039-24-000015_elv-20231231.htm:45]** **[0001156039-23-000007_elv-20221231.htm:42]** .                              |

9f5edc9fbb3de1a07a0d6ed1f3b17d64e17f3db371309767df76ae90ca70a38d

| Program Details          | Program 1       |
|--------------------------|-----------------|
| Approval Date            | **October 15, 2024**  **[0001156039-24-000122_elv-20240930.htm:77]** **[0001156039-24-000122_elv-20240930.htm:35]**  |
| End Date/Duration        | **No specific end date**  **[0001156039-24-000122_elv-20240930.htm:77]** **[0001156039-24-000122_elv-20240930.htm:35]**  |
| Total additional amount  | **$8,000 million**  **[0001156039-24-000122_elv-20240930.htm:77]** **[0001156039-24-000122_elv-20240930.htm:35]**  |
| Remaining authorization amount | **$11,111 million**  **[0001156039-24-000122_elv-20240930.htm:77]** **[0001156039-24-000122_elv-20240930.htm:35]**  |
| Details                  | **Flexible repurchase program**; discretionary and part of capital management strategy  **[0001156039-24-000066_elv-20240331.htm:32]** **[0001156039-23-000088_elv-20230630.htm:38]**  |

ecd42c0d28f04ab5e795e2b08fa300258913c72194858c70e07aadc55977b6b5

**Annual guidance for FY 2025:**
- **Adjusted Diluted EPS**: $34.15 to $34.85  **[ELV_3413107_3]** **[ELV_3413107_4]**  (lowered from at least mid single-digit growth  **[ELV_3402953_5]** )  
- **Operating revenue growth**: High single to low double-digit percent range  **[ELV_3413107_5]**  (raised from high single-digit percent range  **[ELV_3402953_5]** )  
- **Consolidated MLR**: ~89.1%, ±50 bps  **[ELV_3413107_5]**  (raised from ~88.5%  **[ELV_3402953_4]** )  
- **Adjusted Operating Expense Ratio**: 10.4%, ±50 bps  **[ELV_3413107_5]**  (no prior guidance)  
- **Operating Cash Flow**: ~$1B  **[ELV_3413107_5]**  (lowered from ~$4.5B  **[ELV_3402953_4]** )  
- **Share Repurchases**: ~$2.3B  **[ELV_3413107_5]**  (no prior guidance)  
- **Dividend Increase**: 5% increase to $1.71 per share  **[ELV_3413107_5]**  (no prior guidance)  
- **Earnings Seasonality**: ~60% of adjusted EPS in H1 2025  **[ELV_3413107_5]**  (no prior guidance)  
- **Medicare Membership Growth**: 45.8M–46.6M total; 2.2M–2.25M Medicare Advantage  **[ELV_3413107_4]**  (no prior guidance)  
- **Medicaid Margins**: Expected improvement over FY 2025  **[ELV_3413107_4]**  (raised from expected to remain below the long-term target  **[ELV_3402953_6]** )  
- **Health Benefits Operating Margin**: Decline by 25–50 bps YoY  **[ELV_3413107_12]**  (no prior guidance)  

09f06d4f3347bbb66e0f27af016e3fe4c0eefd346d4b94db46f2d949cfeb3186

| Name               | Start Date | End Date | Reason for Change |
|--------------------|------------|----------|-------------------|
| Ernst & Young LLP | 1944  **[0001156039-24-000015_elv-20231231.htm:127]**    | Present  | Current auditor   |

219bed4868dae1c88ee87b69565346d639d314949a12d7707ed454b5de94a471

731cf24ef933086b8fbeeee16906cd416cc15c61efb325c7876885e399ab2d62

- Total Revenue: $45,442 million (+7% YoY)  **[0001156039-25-000007_a4q2024elvearningsrelease.htm:5]** **[0001156039-24-000015_elv-20231231.htm:129]**   
- Cost of Goods Sold (COGS): $6,012 million (+24% YoY)  **[0001156039-25-000007_a4q2024elvearningsrelease.htm:5]** **[0001156039-24-000015_elv-20231231.htm:129]**   
- Operating Income (EBIT): $606 million (-39% YoY)  **[0001156039-25-000007_a4q2024elvearningsrelease.htm:5]** **[0001156039-24-000015_elv-20231231.htm:129]**   
- Net Income: **$413 million (-50% YoY)**  **[0001156039-25-000007_a4q2024elvearningsrelease.htm:5]** **[0001156039-24-000015_elv-20231231.htm:129]**   
- EPS (Diluted): $1.81 (-50% YoY)  **[0001156039-25-000007_a4q2024elvearningsrelease.htm:5]** **[0001156039-24-000015_elv-20231231.htm:129]**   
- Net Change in Cash: $1,828 million vs. -$4,393 million in Q4 2023  **[0001156039-25-000007_a4q2024elvearningsrelease.htm:6]** **[0001156039-24-000015_elv-20231231.htm:131]**   

bb8b464068dcd1c813bca8f8ede9fc65f9e3d1dcb37f07ff8d9784010e06c92a

a5af1d1303cbc16de808cc363953ab52efd5559a5362c50aa17ca42068352ee5

39530d18d49b7fb0869af4dfd8a95fe3b57fc891435012c4a7210e07a1fa6de9

6fa8cedc3db644b6e4c20d02a1ddfd6a1c4645b217992cc11d4f5480bcbede73

- Elevance Health expects to **grow individual Medicare Advantage membership in line or slightly better than the broader market in 2025** due to strategic actions taken to create a sustainable foundation for growth, including exiting underperforming markets and focusing on high-priority segments.  **[ELV_3402953_11]**
- The company's **CarelonRx segment is performing strongly**, with growth in specialty pharmacy and infusion services, and has secured significant wins going into 2025, contributing positively to overall performance.  **[ELV_3402953_13]**
- Management remains confident in achieving **at least 12% adjusted EPS growth over the long term**, driven by the strength of Elevance Health's diverse and complementary businesses, including **strong acceleration in revenue growth** and expanded ACA footprints.  **[ELV_3402953_6]**

f59a836022cd8eeb81f57fd8356a583b1e63649684e50a281cc63ce45e4e7d17

1. **Medicaid Cost Trends and Margin Impact**  
   **Q:** Why are Medicaid costs accelerating so much now?  
   **A:** We experienced accelerated cost trends in Medicaid throughout the third quarter, with trends running around **3x to 5x** the historical average depending on the state.  **[ELV_3402953_7]**  This is driven by higher overall membership acuity due to redetermination cycles now being substantially complete.  **[ELV_3402953_7]**  While rate increases have been higher than historical averages, they remain insufficient to fully cover the claims trends we're seeing.  **[ELV_3402953_7]** 

2. **Medicaid Rate and Acuity Mismatch**  
   **Q:** When will Medicaid rates catch up with higher acuity?  
   **A:** We expect the mismatch between rates and acuity to narrow as state rate updates increasingly reflect the underlying member acuity.  **[ELV_3402953_8]**  However, given the states' processes rely on data that can lag by **1 to 2 years**, it's going to take time before this is fully reflected in their rate schedules, possibly persisting through **2025**.  **[ELV_3402953_6]** **[ELV_3402953_7]** 

3. **2025 Margin Outlook and Profitability**  
   **Q:** How will the Medicaid pressures affect 2025 margins?  
   **A:** We anticipate that Medicaid margins in **2025** will remain below our long-term target due to the timing disconnect between rates and acuity.  **[ELV_3402953_6]**  Nevertheless, we believe this is time-bound, and over the long term, we are confident in achieving our margin targets as rates catch up with acuity.  **[ELV_3402953_20]** 

4. **Medicare Advantage Competitiveness and Margins**  
   **Q:** Is the Medicare Advantage environment playing out as expected?  
   **A:** Yes, we feel well-positioned in Medicare Advantage, having taken strategic actions last year to create a sustainable foundation for growth.  **[ELV_3402953_11]**  We expect to grow in line or slightly better than the market and are confident in our product positioning for **2025**, with margins expected to improve compared to **2024**.  **[ELV_3402953_21]** 

5. **Impact on Carelon Health Businesses**  
   **Q:** How are Medicaid dynamics affecting Carelon Health?  
   **A:** While we're pleased with Carelon Services' growth exceeding **30%** year-over-year, the behavioral health trends in Medicaid are impacting our margin profile in the short term.  **[ELV_3402953_18]**  We're also seeing effects from the acceleration of risk arrangements, but we feel very good about the long term.  **[ELV_3402953_18]** 

6. **Pharmacy Trends and CarelonRx**  
   **Q:** Are you seeing accelerating Rx trends in specialty pharmacy?  
   **A:** We've seen an increase in Medicare Advantage Part D specialty drug utilization, but trends in unit costs have been in line with our assumptions.  **[ELV_3402953_13]**  CarelonRx has strong results, and we're very pleased with our strategy and growth, making good progress in specialty pharmacy and infusion.  **[ELV_3402953_13]** 

7. **Commercial Business and ACA Exchanges**  
   **Q:** How is the margin profile for Exchanges and Commercial business?  
   **A:** We feel really good about our Commercial business overall, including Individual ACA.  **[ELV_3402953_17]**  We're positioned well in the geographies we serve, expecting to improve our market share by about **2 points** moving forward, and we anticipate the business will meet our economic expectations.  **[ELV_3402953_17]** 

8. **Medicaid Profitability and State Rates**  
   **Q:** Is the Medicaid book profitable today?  
   **A:** Yes, the Medicaid business is expected to be profitable this year, albeit below our target margin range.  **[ELV_3402953_10]**  We continue to work diligently with our state partners to ensure rates align with member acuity, but this process will take time.  **[ELV_3402953_20]** 

9. **Utilization Trends**  
   **Q:** What is increasing more than your expectations?  
   **A:** In Medicaid, we are seeing ongoing pockets of elevated trend, most notably in **behavioral health**.  **[ELV_3402953_9]**  In Medicare, trends were slightly elevated due to incremental pressure from the **Two-Midnight Rule** and a late summer surge in **COVID** cases.  **[ELV_3402953_9]** 

ab1c9ef532d70e43e54ae12380ab91ae82e538a915906d26a97f626352092d46

- **Medicaid margins are expected to compress** year-over-year due to a **timing mismatch in rates relative to acuity** and **higher acuity associated with the Medicaid membership mix**, leading to potential profitability pressures. The company acknowledges that **elevated outpatient trends and elective procedures** are contributing to this compression.  **[ELV_3393388_8]** **[ELV_3393388_16]**
- The **full-year operating cash flow outlook has been reduced** from **at least $8.1 billion** to **slightly north of $7 billion**, reflecting **year-to-date reductions in working capital** and the **runoff of Medicaid reserves** due to membership attrition. This decrease signals potential cash flow challenges.  **[ELV_3393388_17]**
- The company now expects the **full-year benefit expense ratio to be in the upper half of the initial guidance range (87% to 87.5%)**, primarily because of **Medicaid dynamics**, indicating **higher medical costs** and potential margin pressures in the government business segment.  **[ELV_3393388_14]**

aaec511600d7b3e891c1cfb480819fdd56d8b9537bcbd719bd23115d5bbab8cd

- **Elevance Health is effectively capitalizing on Medicaid redeterminations by expanding its ACA exchange membership**, demonstrating strong growth in individual markets and outpacing market growth, with expectations for continued growth as they maximize access to care for redetermined Medicaid beneficiaries.  **[ELV_3370674_16]**
- **Carelon, Elevance Health's services segment, experienced strong growth in 2023, exceeding initial guidance with an approximately 18.6% increase**, driven by strategic acquisitions like BioPlus and new product launches. The company is excited about the momentum going into 2024, including the acquisition of Paragon Healthcare, and expects continued expansion in specialty pharmacy and home delivery services.  **[ELV_3370674_20]**
- **Elevance Health remains confident in the long-term potential of the Medicare Advantage market**, seeing it as a strong and growing segment. The company has intentionally repositioned its Medicare business to improve sustainability and margins, expecting to grow this business profitably even in a hypercompetitive market, and anticipates accelerated growth in 2025 through its "flywheel for growth," including improvements in both the health benefits business and Carelon segment, as well as operational efficiencies from digitization and AI investments.  **[ELV_3370674_13]** **[ELV_3370674_7]**

b2f0e3634e5151d3325c13116a2576f89ad5d54846fbcb33e662f8dd00bceef5

- **Medicare rate cuts for the second consecutive year** may negatively impact ELV's Medicare Advantage business, potentially leading to increased premiums and reduced benefits for seniors, affecting growth and margins.  **[ELV_3379995_13]**
- **Normalization of Medicaid margins due to revenue and enrollment declines** may impact ELV's profitability in its Medicaid segment as membership decreases from redeterminations and rates adjust accordingly.  **[ELV_3379995_20]**
- **Expected decrease in Days Claims Payable (DCP) to the low 40s over the long term** may reduce the embedded earnings power from reserves, which could negatively affect future earnings growth.  **[ELV_3379995_20]**

9dd3d3b59963c3931f617e759184e094eb06974109d9e59783c71c52a3341dc1

1. **Medicare Advantage Growth**  
   **Q:** Why is MA growth lower than expected?  
   **A:** The company made disciplined decisions to enhance financial performance, exiting underperforming markets on the mainland, resulting in a decline of about **84,000 members**.  **[ELV_3370674_9]**  In Puerto Rico, they reduced supplemental benefits to improve performance, expecting a membership decline of around **90,000** in 2024.  **[ELV_3370674_9]**  Excluding these planned attritions, net Mainland MA membership is on track to grow by high single digits despite aggressive competition.  **[ELV_3370674_9]** 

2. **Flat MLR Guidance**  
   **Q:** Why is 2024 MLR guidance only flat?  
   **A:** Despite expected margin improvements, the company guides to a flat benefit expense ratio of **87%** for 2024.  **[ELV_3370674_8]**  This reflects a consistent approach to reserves and prudence around utilization, given the dynamic operating environment, especially in government businesses.  **[ELV_3370674_8]**  Intentional management actions in commercial and appropriate expectations in Medicare Advantage utilization contribute to this outlook.  **[ELV_3370674_8]** 

3. **Medicare Advantage Outlook**  
   **Q:** What's the MA market outlook and Elevance's potential?  
   **A:** The company views Medicare Advantage as a strong long-term market, with over **50%** of seniors selecting MA today.  **[ELV_3370674_13]**  They've made strategic investments and positioned themselves for sustainable performance.  **[ELV_3370674_13]**  They believe they can grow the MA business profitably, even in competitive markets, by adding value for seniors and focusing on whole health.  **[ELV_3370674_13]** 

4. **Medicaid Redetermination Impact**  
   **Q:** Update on Medicaid redeterminations and 2024 guidance?  
   **A:** Medicaid redeterminations are approximately **2/3** complete.  **[ELV_3370674_11]**  The company has seen more front-loaded disenrollment, notably in large states with accelerated processes.  **[ELV_3370674_11]**  They've adjusted Medicaid retention assumptions to about **30%** of PHE-related growth.  **[ELV_3370674_11]**  Updated projections are factored into their membership guidance.  **[ELV_3370674_11]** 

5. **2024 Margin Drivers**  
   **Q:** What's driving margin progression in 2024?  
   **A:** Operating margins are expected to expand by **25 to 50 basis points** in 2024.  **[ELV_3370674_14]**  This is driven by continued underwriting discipline in commercial, Medicare margin expansion by balancing growth and margin, and operating expense leverage with a guide down to an **11.1%** operating expense ratio.  **[ELV_3370674_14]** 

6. **Carelon Margin Expansion**  
   **Q:** What's driving Carelon's margin expansion in 2024?  
   **A:** Carelon's margin expansion is propelled by growth in services focusing on high-cost, complex areas.  **[ELV_3370674_10]**  New offerings in 2024 include full-risk opportunities in oncology and behavioral health.  **[ELV_3370674_10]**  These initiatives, though lower margin in early years, are significant and propel the business trajectory.  **[ELV_3370674_10]** 

7. **Risk Enrollment Decline**  
   **Q:** How much risk enrollment loss is commercial vs. Medicaid?  
   **A:** Most of the **1 million-plus** decline in risk membership for 2024 is driven by Medicaid redeterminations and prior footprint adjustments.  **[ELV_3370674_18]**  Commercial risk membership is expected to be approximately flat while improving margins.  **[ELV_3370674_18]** 

8. **Medicare Advantage Margins**  
   **Q:** Will MA margins be within 3%-5% target in 2024?  
   **A:** Medicare Advantage margins are currently below the long-term target range of **3% to 5%**.  **[ELV_3370674_17]**  Despite benefits repositioning, the company does not expect to be within that target in 2024.  **[ELV_3370674_17]** 

9. **Carelon Rx Growth Slowdown**  
   **Q:** Why is Carelon Rx growth slowing in 2024?  
   **A:** In 2023, growth of around **18.6%** was driven by the BioPlus acquisition.  **[ELV_3370674_19]**  For 2024, growth is expected to be in low single digits.  **[ELV_3370674_19]**  The slowdown reflects the non-recurrence of acquisition-related boosts, but the company is excited about momentum with new product launches and strategic initiatives.  **[ELV_3370674_19]** 

10. **Value-Based Care Strategy**  
    **Q:** How is value-based care strategy evolving?  
    **A:** The company remains consistent in its value-based care strategy, with over **60%** of business in value-based arrangements.  **[ELV_3370674_12]**  They focus on aligning with providers on cost, quality, and outcomes.  **[ELV_3370674_12]**  There's a focus on enablement rather than ownership, particularly in specialty, high-cost areas like oncology and behavioral health.  **[ELV_3370674_12]** 

b39a9de50c34d2e81150c3d263f7ac6bc07f908f6524509ae689d36ef2d9e4c7

1. **Medicaid Margin Compression**  
   **Q:** How are Medicaid margins trending and impacting overall results?  
   **A:** Management expects **Medicaid margins to compress year-over-year** due to a **timing mismatch in rates relative to higher acuity** and **increased utilization**, affecting the benefit expense ratio, which is now anticipated to be in the upper half of the initial guidance range (87% to 87.5%). They are holding constructive conversations with states to ensure rates remain actuarially sound.  **[ELV_3393388_6]** **[ELV_3393388_8]** **[ELV_3393388_11]** **[ELV_3393388_14]** 

2. **Revised Growth Targets**  
   **Q:** What's causing the revision in long-term growth targets?  
   **A:** The enterprise revenue growth target has been **revised from high single to low double digits to high single-digit percent** range, primarily due to **Medicaid-related attrition and prudent actions in Medicare Advantage bids** in response to risk model revisions. The Health Benefits revenue CAGR is now expected to be in the **mid- to upper single-digit percent range**, but the overall growth path remains much the same.  **[ELV_3393388_13]** 

3. **Medicare Advantage Margins**  
   **Q:** How are Medicare Advantage margins expected to evolve?  
   **A:** Medicare Advantage margins are expected to **improve in 2024 compared to 2023**, yet they will still remain **below the long-term target margin range**. The company remains committed to a profitable and sustainable MA business, with disciplined pricing and benefit designs for 2025 amidst a dynamic environment.  **[ELV_3393388_8]** **[ELV_3393388_9]** 

4. **Investments in CarelonRx and Specialty**  
   **Q:** What's the status and outlook of investments in CarelonRx and specialty pharmacy?  
   **A:** The company is investing in scaling specialty pharmacy through **integrations of BioPlus, Paragon Healthcare, and the pending acquisition of Kroger's specialty pharmacy business**. They are focusing on in-sourcing scripts, expanding capabilities, and see significant opportunities to drive growth and deliver on the Carelon strategy, with an emphasis on patient differentiation and whole health.  **[ELV_3393388_7]** **[ELV_3393388_12]** **[ELV_3393388_22]** 

5. **Medicaid Utilization Trends**  
   **Q:** What trends are being observed in Medicaid utilization?  
   **A:** There is **higher acuity and increased utilization across the Medicaid population**, including outpatient services and elective procedures. A pull-forward effect is seen from members facing imminent loss of coverage due to redeterminations, but this is expected to abate as the year progresses. These trends have been fully accounted for in the company's full-year guidance.  **[ELV_3393388_6]** **[ELV_3393388_8]** **[ELV_3393388_11]** **[ELV_3393388_14]** **[ELV_3393388_16]** 

6. **Cost Savings Initiatives**  
   **Q:** What's the progress on the $750 million cost savings plan?  
   **A:** The company is **on track to realize approximately $750 million** in gross run-rate expense efficiency improvements, which will benefit operating performance and establish a strong foundation for future growth. They anticipate significant improvement in the operating expense ratio in the second half of the year, leveraging new technologies, including AI, to enhance experiences and reduce costs.  **[ELV_3393388_21]** 

7. **Operating Cash Flow Impact**  
   **Q:** How are timing items affecting operating cash flow guidance?  
   **A:** Year-to-date operating cash flow decreased by approximately **$6 billion**, including **$4.3 billion** of timing-related items and **$1.3 billion** of net cash outflows associated with the runoff of Medicaid reserves. The full-year operating cash flow outlook is now expected to be **slightly above $7 billion**, reflecting these factors.  **[ELV_3393388_17]** 

8. **Commercial Business Performance**  
   **Q:** How is the commercial business performing in terms of renewals and margins?  
   **A:** The **commercial business is performing as expected**, with about **25% of the risk-based large group business renewing in July**, showing improved persistency and margins coming through. The company feels confident about their positioning for continued growth and expansion in this segment moving forward.  **[ELV_3393388_20]** 

9. **Carelon Services Growth with Blues**  
   **Q:** What's the opportunity with Blue Cross Blue Shield partners for Carelon Services?  
   **A:** The company is **engaged with most of the Blue Cross Blue Shield partners**, employing a strategy of landing and expanding services. They've seen significant growth, converting capabilities to risk arrangements, and are focusing on behavioral health, post-acute capabilities, and other Carelon Health businesses for future expansion.  **[ELV_3393388_18]** 

10. **Medicare Advantage Growth Strategy**  
    **Q:** How is the company approaching Medicare Advantage growth in specific markets?  
    **A:** The company is strategically focusing Medicare Advantage growth in areas with **existing Medicare and Medicaid business**, emphasizing markets where they can align with their Carelon capabilities. They are concentrating on density in Blue markets and Medicaid markets where they see opportunities for strategic growth with Carelon in the future.  **[ELV_3393388_23]** 

a72c6a138e61c076ff9c1fd4158b024df4b166909f0243005e15657cbca20566

- **Elevance Health is firmly committed to achieving a long-term adjusted earnings per share (EPS) compound annual growth rate (CAGR) of 12% to 15% through 2027, and sustaining at least a 12% CAGR over the long term**, reflecting confidence in their business strategy and growth prospects.  **[ELV_3379995_14]**
- **Strong performance in both the Health Benefits and Carelon divisions led to an increase in adjusted EPS guidance by $0.10 to be greater than $37.20**, with operating margins increasing by 30 basis points and 20 basis points respectively, demonstrating disciplined execution and positive momentum.  **[ELV_3379995_15]**
- **Carelon Services is experiencing significant external revenue growth, exceeding total 2023 sales already in 2024**, with notable wins in behavioral health and Insights businesses, indicating strong market traction and a rich pipeline for future growth.  **[ELV_3379995_11]** **[ELV_3379995_12]**

9a9d782d7458a71d0d64a8872cb024accf655669000e4187f25bcbf052947266

- **Commercial Business Growth and Margin Improvement:** Elevance Health's commercial risk-based large group business is performing well, with **persistency improving and margins coming through**, positioning the company for **continued growth and expansion** in that segment.  **[ELV_3393388_20]**
- **Strong Growth in Carelon Services:** Carelon Services reported an impressive **26% operating revenue growth in the quarter**, with **significant opportunities to deepen penetration** by working with most of the Blue Cross Blue Shield partners and expanding services to external clients.  **[ELV_3393388_18]**
- **Accelerated Revenue Growth Expected in 2025 Across All Businesses:** The company anticipates **accelerating revenue growth across all of its businesses in 2025**, including strong momentum in commercial, expansion of individual ACA footprint, opportunities in Medicaid post-redetermination, and growth in Carelon Services and CarelonRx.  **[ELV_3393388_5]**

7db9dae3c7dd2ff110fa50b3dee7d8485d69cfad92e5bd7c3aa1b3e5a0defa2b

1. **Change Healthcare Cyberattack Impact**  
   **Q:** How did the Change cyberattack affect results?  
   **A:** The cyberattack on Change Healthcare led to a **15–20% reduction** in daily electronic claims receipts initially. The company acted quickly, and operations have returned to normal, effectively catching up on claims receipts by quarter-end. This disruption increased sequential days in claims payable by approximately **1.7 days**.  **[ELV_3379995_7]** 

2. **Value-Based Care Strategy with CD&R Partnership**  
   **Q:** What's the vision for the CD&R value-based care partnership?  
   **A:** The partnership with CD&R aims to expand value-based care across all lines of business—commercial, Medicare, and Medicaid—in a **payer-agnostic** model. The combined entity will serve nearly **1 million consumers**, focusing on advanced primary care, downside risk sharing, and integrating Carelon Services for complex and chronic patients  **[ELV_3379995_6]** ,.  **[ELV_3379995_8]** 

3. **Medicaid Redetermination Impact**  
   **Q:** How is Medicaid redetermination affecting membership and margins?  
   **A:** Approximately **90%** of Medicaid members have been redetermined, aligning with expectations. The impact resulted in a downward trend in membership but is tracking as planned. The company has visibility into **75%** of Medicaid rates for 2024, which are actuarially sound, and margins are normalizing as expected  **[ELV_3379995_10]** ,.  **[ELV_3379995_21]** 

4. **Guidance Increase**  
   **Q:** What's driving the increase in guidance?  
   **A:** The adjusted EPS guidance was increased by **$0.10** to be greater than **$37.20**, driven by solid performance in both health benefits and Carelon divisions. The company remains prudent due to variability around medical cost trends but is confident in its ongoing strategic execution.  **[ELV_3379995_12]** 

5. **Utilization Trends by Line of Business**  
   **Q:** How are utilization trends across different businesses?  
   **A:** Utilization in Q1 was in line with expectations. In commercial, inpatient and outpatient authorizations aligned with projections. Medicare observed expected utilization related to inpatient stays and outpatient procedures, planned for in cost trend assumptions. Medicaid experienced increased utilization due to redetermination mix, managed with actuarially sound state rates.  **[ELV_3379995_11]** 

6. **Medicare Growth and Margins**  
   **Q:** How will the company balance Medicare growth and margins?  
   **A:** Despite a tougher rate environment with consecutive cuts, the company remains disciplined, focusing on delivering consistent, high-value competitive benefits. The goal is to balance growth and margins to build a sustainable, attractive long-term Medicare business.  **[ELV_3379995_14]** 

7. **Carelon Services Growth and Margins**  
   **Q:** What's driving Carelon Services' external growth and margins?  
   **A:** Carelon Services is experiencing strong external revenue growth, having already exceeded **2023 sales** early in 2024. Notable wins include behavioral health contracts and insights businesses with other Blues plans. First-quarter margins expanded by **90 basis points**, reflecting strong revenue growth and new internal risk deals  **[ELV_3379995_13]** ,.  **[ELV_3379995_18]** 

8. **Specialty Pharmacy Expansion with BioPlus and Kroger**  
   **Q:** What's the progress on specialty pharmacy initiatives like BioPlus and Kroger?  
   **A:** The integration of BioPlus is progressing well, with script migrations staged throughout **2024 and 2025**. The acquisition of Kroger Specialty Pharmacy, expected to close in **Q3–Q4**, adds meaningful scale, increases access to limited distribution drugs, and strengthens relationships with manufacturers, enhancing affordability and quality  **[ELV_3379995_16]** ,.  **[ELV_3379995_17]** 

9. **Days Claims Payable Outlook**  
   **Q:** How will days claims payable trend over time?  
   **A:** Days claims payable increased by approximately **1.7 days** due to the Change Healthcare disruption. Over the long term, the company expects DCP to return to a more normalized range in the low **40s**, potentially unlocking embedded earnings power as reserves move lower  **[ELV_3379995_21]** ,.   

10. **EPS CAGR Target Clarification**  
    **Q:** Should we expect a 12% or 12–15% EPS CAGR long-term?  
    **A:** The company remains committed to achieving a long-term adjusted EPS CAGR of **12–15%** through **2027** and is confident in sustaining at least **12%** growth over the long term, leveraging the health benefits and Carelon flywheel.  **[ELV_3379995_15]** 

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- **Medicaid cost trends are developing worse than expected**, primarily due to elevated medical costs in the Medicaid business, which is causing margins to remain pressured. Management expects **Medicaid margins to remain below long-term targets through 2025**.  **[ELV_3402953_6]** **[ELV_3402953_9]**
- **Elevated utilization trends in Medicaid**, notably in **behavioral health**, are driving higher medical costs and impacting profitability.  **[ELV_3402953_9]**
- **Uncertainty in achieving long-term earnings growth targets** due to ongoing Medicaid challenges. Management acknowledges that while they believe in their long-term growth algorithm, **Medicaid margins in '25 are expected to remain below long-term targets**.  **[ELV_3402953_6]**

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- **Elevance Health is facing significant Medicare Advantage membership declines**, expecting to lose approximately **174,000 members** due to exiting underperforming markets and reduced supplemental benefits in Puerto Rico, leading to an expected **flat MA membership in 2024**, which may limit growth prospects.  **[ELV_3370674_9]**
- The company's **Medicare Advantage margins are currently below their long-term target margin range**, and there is uncertainty about when margins will return to target levels, potentially impacting profitability.  **[ELV_3370674_18]**
- **Elevance Health expects revenue growth in its Carelon Rx segment to slow significantly in 2024**, from **18.6% growth in 2023** to **low single digits** expected in 2024, indicating challenges in sustaining high growth in this segment.  **[ELV_3370674_20]**

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Elevance Health Inc (ELV)

Financials