- Earnings call transcript Q3 2022

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to the Elevance Health Third Quarter Earnings Conference Call. At this time all participants are in a listen-only mode. Later we will conduct a question-and-answer session, where participants are encouraged to present a single question. [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. ahead. go Please

Steve Tanal

call with will will a Norwood, Felicia welcome of Government President call. begin President After and Investor quarter Health's the team remarks, quarter of Gail recent our and strategic call and the our our discussion third And Business and Commercial against Division; and the our detail. Good results John will our and brief Carelon; CEO; is Business to Morgan Steve our in the earnings Gallina, then earnings of on morning our This us Division. Peter available greater of Gail Tanal, be financial Q&A. prepared XXXX outlook progress initiatives. Boudreaux, discuss with President Haytaian, John for morning CFO; this Elevance are of Vice Specialty Relations. President President Kendrick,

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

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

Gail Boudreaux

revenue of This earnings adjusted $X.XX earnings share per growth growth are of Health that $XX.XX we're Today momentum, third of our full in $X.XX strong representing on off expectations of quarter Thanks the of and delivered GAAP greater per increasing morning pleased approximately guidance per we to Steve everyone. reported than results provided good year. Based we another our and earnings across share of reflecting our quarter. strong the we share and share, adjusted businesses. baseline the adjusted Elevance morning ahead beginning earnings our and year-to-date to confidence XX% and year at

Before we lives moment of members tragically spend live and people some discuss and in to the plan I a have in on detail, areas. that Puerto in impacted Rico, want who recent hurricanes health quarter impacted the of our the more the associates and work Florida own including

provide rooted our for transportation in these these clinical behavioral as are commitment doing deeply for along of As and organization in who personal. they impact need. to and that workers is I'd to are in leading an efforts I time the water, associates disasters through to like am associates durable their social communities, extraordinary with health food, proud medical our colleagues work It's of the thank teams, our such our support equipment, shelter, to support our their shines communities. culture specialists those and and

whole health momentum testament Elevance personalized to the and our pleased Turning approach to business social we needs ongoing are to across integrated members performance, behavioral Health, and of report addressing physical, a to our broad-based communities. and our

commercial efforts growth for with partners rapid membership and as investments health resonating state driving focused well are and in as strong in and areas businesses, Our employers growth and organic benefits our Carelon these IngenioRx. government

general businesses. and membership of are value consumers environment our for the we mindful uncertainty strong, pressure are economic to affordability the all remain trends business and customers in in Medical on and delivering focused X% members. of year-over-year XX.X grew inflationary and our million While

solutions. continue businesses In our the delivering million position that to and the by membership. strength largest consumer market, based share leading consumers connections in care connection experience government more gain innovative position grown our our commercial products both where for to Over total market year, U.S. personalized advocacy next of guiding suite of as health carrier through we whole an solidifies members the and we've intuitive consumers of medical is as health by care the X.X past growth we're a an step health to delivering Total robust on simple, serve such with integrated the our experience. cost employer example of and

social and healthcare Our enable clinical risks advocates our medical, help to grown million will has in more identify more advocates X behavioral leveraging with and analytics past proactively of health than to years some over real-time than our connect manage that their members members system, navigate members help connections issues Health and support XXXX. two health. the them personally data XX% impacting the

are advocacy the now hosting to more digital offerings Health, registered the health door addition needs, momentum. to of digital also rapidly is for users solutions, our X our expand Sydney month. integrated continues gaining visits and number every members' million front In than

Sydney our through such available and into with used offering, commercial also being are members conditions support and satisfaction increasingly virtual chronic which We with hypertension X and care Type our strong seeing primary Health is products to as integrated member is diabetes.

to that Our potential health resulted improve outcomes costs. overall the date care top of diagnoses XX in to the and that with conditions primary treatment the can improve chronic have care reduce XX% findings virtual needed demonstrating to access of reflect

achieve well Turning Medicare to individual market another business, positioned to in our above of growth year we're membership. Advantage Medicare

seniors daily in ever, of a cost plans industry-leading For benefits market Advantage reach in XX% added significantly deliver With plans needs. XXXX, to pressure our strong will important positioned than value differentiated our counties, new Advantage value are supplemental health for we Medicare are no Nearly $X increasing and we for continue copays important seniors PPO and primary plans meet to offerings. and offering more their affordability this XXX care Medicare expanded on to for into and as our XXXX. our premium of widespread core counties and living, have XXX with the

while hospital third the value which is ratings differentiated In of management our focused unique due customized markets. and or include our that plans scaling will a implementing spending over-the-counter myNEXUS remain our across and will on have serving to quarter, amounts post reduce groceries. can we vision, now our and new affiliated HealthSun at keep way modest well the and care access with did COVID-era facilities their and rating for overall Advantage the that and five received an for than benefits continue to of members a relief. star and four high earn scores the in impact rapidly appropriate our will benefits recently acute the with delivering also in which length major less add Advantage accelerate offerings, payment Star to with of which Elevance is for we're of and Medicare thousands is of quality This XXXX end In Medicare working as now and we our drive Carelon business a see product, healthy commercial focus post-acute also by payment performance long-term star plans for percentage Plan Medicare card inpatient safely Health levels began the patient used Florida, optimize and of Advantage of thereby dental in-home single the markets And simplified transportation, in Seniors pleased Carelon cost at benefits drop continues supplemental participating in or track sixth the a Elevance with post-acute impact its support be end predominantly decline popular Our Advantage maintaining service higher readmissions a Ratings in expansion XXXX a Health. Many in we the members. on quality to Plans Star care more to results for of key the offering achieving goal at their Medicare released intensely plans coming with on prepaid by online manage area a retailers high plans Medicare the in portal. stay. rated of helps to industry, of particularly all the Health year. distinctive our year XX in and row star markets members remain as Ratings, scale. represents quarters. aggregate, XXXX product line we average transitions our year, and discharge plans

year, benefiting to producing perform year-to-date, AIM plans As our commercial Specialty we at diagnostic select focused of business been well XX cost imaging while entire stable, for earlier Health this discussed plans expanded with of members year. for conditions for Carelon. the conditions management care health our Carelon’s our such performing to state growth footprint driving our and of commercial clinical commercial surgery its AIM contract this and risk-based health complex has cover oncology, beginning predictable as

an and for I the These emphasis thank most. our We with almost recently remains members Healthcare exchange would the Care. social of and not Their dedication Multicultural identify And more an our like results be Places than our equity associates. us impact Awards these decisions they health and is Care Cross' work to and NCQA health in the Anthem to Fortune California the Plus our make progress on in they on plan our day. score. address pleased list. Blue Best were year, show business without central Simply People's, important as National who would passion them Health that perfect reflected to Equity Assurance do achieved Companies great possible commitment targeted Health on and and to the the and work enterprise-wide with need XXX,XXX Our every and individual Florida Similarly, distinction place for That of in third in achieved local, our recent physical continues For inclusion commitment recognition Quality consecutive in drivers focus Committee a and by also for XXXX Work investments. to accreditation strategy guide to our plan like

health improve results our and our our to this credibility, work and recognitions experience trust, showed and humanity. company, members, contributions to culture. Our employees’ associates community. represent high the These levels of of inspired make retain every to commitment in they respect, the the and pride which of understand a associate efforts in help national recruit the recently our fairness, the our see and talent, their XX% pride, that and and engagement defined and our strong difference to results reflect by survey, We and top our leadership purpose most of are take reflection of by our day do associates

making improve and to unwavering Elevance passion communities and as lives look we is to forward a meaningful difference Our Health.

our Now I'd more results. on operating call the turn John? for over to like John to

John Gallina

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

of broad-based momentum by earnings driven enterprise. XX% As we $X.XX, mentioned year-over-year an increase reported quarter across earlier, Gail adjusted per third of our approximately share

per earnings We driven double-digit share, and disciplined growth adjusted another strategy of revenue, of progressing us are quarter and pleased a a quarter. income to million operating have our growth our the in further health businesses, of with ongoing members ended to health delivered the by in of in benefits the services and of down growing partner X% nearly third from year-over-year, growth We lifetime members trusted health. path XX.X including company transforming X.X execution million third benefits XXX,XXX quarter or

approximately billion, of approximately over prior businesses. increase quarter with $XX.X was third XXX,XXX XX% this We nearly Integra revenue $X.X strong of higher Medicaid earned by which the in strong the led Operating growth the industry-leading or primarily growth dual our which each members an Our billion and of of year. constituted in We Advantage membership, overall Medicare suspension was business, fee-based enrollment with members. quarter enrollment commercial by earlier membership of growth our our our all fee-based XX% ongoing market of the driven excess Integra in by and increases to rate organic the eligibility of plans growth benefits growth lines. organic including eligible total and in the Paramount; risk Medicare; individual Medicaid cover in in acquisitions added redeterminations large overall strong commercial premium sales cost the by Medicaid Medicaid, revenue Paramount health growth, part together of in driven premium supplemented health in driven and acquisitions in growth and trends growth and membership year-over-year, our

the approximately a XX% basis eliminating produced Carelon quarter strong quarter, of comprised we year providing. to third is representing health while and IngenioRx our very And IngenioRx up XX a points expense, between Carelon grew segment execute we XX% and Revenue to a for XX%. continue Carelon, The Commercial benefit with plans XX.X%, revenue the XX% to grew other for XXXX. services strategy. health the a as third depth Our year-over-year, strategy, of over proxy consolidation, value ago. consistent businesses, continue are our consolidated revenue third against breadth and affiliated long-term primarily services growth businesses, growth ratio and of approximately operating the year-over-year the our significant in increase consolidated services from our delivering business of risk-based Government quarter IngenioRx plans. grew our Carelon our of benefit decrease expense and XX% was

quality benefit offsetting on During a the an ratio expenses expense certain year, since earnings. on operating our improvement which quarter, of impact we beginning expense impact the realigned had no on with unfavorable our favorable impact and this SG&A ratio incurred

risk year-over-year Excluding segment's an we Health's ratio contributed our group group SG&A repriced expectations. as the commercial business previously of pleased services our expense prior with date. the the the performance XX% the margin basis X expenses growth third quarter underwriting better expansion in we the in We successful impact described. spend into quarter. continued certain businesses were approach in of The penetration process year as than improvement our to benefit Elevance over more renewal January of of by in points our would even the increase approximately X the driven driven increase of medical the was and increases our have was our Commercial operating quality and our XX.X%, of X retention confidence risk and have July and We performance. renewals in XX accounting flat realignment, large to The realignment approximately by pleased ratio primarily support where July business. part stronger to expense business, fee-based renewal were been deliver

SG&A our would points realignment, basis the improved approximately XX ratio Excluding have by year-over-year.

Third quarter. or early cash premium was by $X.X X.Xx driven receipt certain the fourth third quarter from the flow operating billion net quarter income, CMS of revenue primarily during

the million litigation Blue paid $XXX Shield in of approximately We our Association's quarter. share Blue also of Cross settlement the

billion cash operating would earnings. have items, high these flow been of of X.Xx quality both income, Excluding indication net $X or another

sheet. with target and We range. our Turning expectations in to ratio balance debt-to-capital third XX.X% of our a with our quarter ended line with the consistent

share repurchased During repurchased respect $X.X in at opportunistic billion approximately we've for been common $XXX periods million billion, to in the volatility share our exceeding repurchases of shares our stock price shares of initial quarter, we for $X.X with million. XXXX. least and during already of X.X Year-to-date, X.X outlook million repurchasing have

XX.X days in the to quarter, maintain X.X at increase payable third to decrease end claims posture of continue with prudent We a the of a respect year-over-year. but reserves. days Days at stood days an sequentially of X.X

earnings adjusted year. at performance our year-to-date, be year strong now $XX.XX, share per XX% adjusted We Given we of than baseline approximately increasing the $XX.XX growth the the of expect of earnings full of provided implying are to outlook. greater beginning

expect are businesses will continuing XXXX. well Our that strong into perform we carry with to momentum

the operating The not forward our underwriting our enhanced headwinds commercial disciplined like to the our margin ACA cover and will improve XXXX tailwinds, specific strategies of XXXX cost would consumers coverage medical we anticipate and recovery individual with planning and on execution continued commercial we of efficiencies While growth view in resume. for as provide for transition fee-based XXXX. tailwinds profitability in membership and redeterminations to this as when productivity call, eligibility employer-sponsored Medicaid ongoing the our business. trends, through known review guidance worth I we continue some considering Starting to of

the XX utilization Medicare the in returned earnings margin XXXX. year-over-year. strong by broader expect of or expansion has membership XXXX XX% risk funding the strong a two, expect primary four-star driven Number excess levels. We we driven payment Advantage to environment market relatively normalized growth will continued having factors. growth that three, Advantage an in operating higher-rated one, number And be by increase members in Number as and the in Medicare our three points of plans adjustment more percentage recovery for overall of year, for and industry

next expect carry Carelon year. in into services we Finally, ongoing and will IngenioRx, which momentum

against membership of weighed and and business on eligibility related impacts tailwinds is redeterminations one conducted Our that next are course be is over year. Medicaid known will the our headwind, the attrition the

be is first a are we full our expected to of are rapidly, year the the investments rise outperformance expected anticipating to XXXX. or rates half In year. Rising interest half, significant income continue investment material alternative rates in interest tailwind in the second XXXX, and not benefit from Although enjoyed headwind. to of benefit a rates in we higher

investment for tailwind While XXXX material performance in or expected income years strong is as both not call XXXX I out headwind this at would be either or a to overall, point.

mindful the and conditions economic business could of environment that also We’re the risk deteriorate. uncertain

have and recession our the across years, balance leaves our enterprise growth a for we us the coming in of could resilience severe the challenges. momentum While and more businesses well-positioned create

any our our while come. open us and for please years to positioning are that, consensus have on another consistent to strategic to current better reinvest with priorities to We operator, to for also we XXXX deliver pleased in the specific mapped continue clients guidance prepared continuing our and this per they in to forward plans we year we rate delivered fourth earnings line call. the execute positioned growth which is evolve affordability will needs Our our a as are to throughout. target detailed to with meet and value line remain with environment share adapt another the change of point ensure associates to produce expect unique long-term that Accordingly, in to earnings to the more business against look the commitment annual XXXX, in strong closing, In our customers in providing time, quarter business, quarter strong Investor adjusted growth out we estimate. in Conference at With growth with at compound of questions.

Operator

of ahead. Research. we’ll first go Lake Justin Please For to from [Operator Instructions] Wolfe the line question, our go

Unidentified Analyst

here. is for margin, that the just commercial This thanks Justin On Austin for second. for Hey on focusing a question. on guys,

probably hit range You XXXX to you showed some there. of like target around guys basis there, improvement sequential that looks it that out but points need you kind XXX laid

the come Just And of XXXX that, pacing follow-up XXXX? expecting to slight there. maybe how then curious, much in and on you are a

John. How did that typical You retention, those renewals? versus mentioned Thanks. on track X July

John Gallina

thank a retention. question, Morgan terms to and for pacing, No, and maybe some comments then the is will it basis time more had weighted expect start you the it fine-tune over the of XX target, the I’ll of half beginning we on Yes. a as to in that frame. stated I heavily to turn the ago, little days and points XXX But out bit of XXXX Kendrick be

So just as July we large XX% X. group re-priced about you our insured of business here know, fully on

on going business reprice about X. We’re to that of January XX%

businesses, going and fee-based X:X strategy, The actually to out, years get Obviously, the expectations get needs take and we’re to trajectory through And going where that that nice of very throughout point XX% our the other X:X going to the really, our us to. on our to year. XXXX. the to it much having have really for then which goes it’s improvement plans accordance upselling couple laid a it’s do to the – we

So there. of that, the will Morgan? we question I a improvements to on, think With get more short XXXX answer till but lot to early your is the take

Morgan Kendrick

for John, the question, Thanks, thanks and Justin.

to relates John said was this the there some said, business. up Certainly, there concept be risk it to bit about John renewal. of some take here that going a as January, give large XX% to going turned. To group completely attrition business July context relate is it in – it as came as for you – get expected. actually is in to it’s As

released in just have those market. We

are which we our So than attrition, we’re bit as anything this by there be forward. unmoved tell, will would different expected business early when we’re to but is and – right some move being pricing it’s a expectations be natural that

Gail Boudreaux

fee-based from we’re good really our the And heard Thanks, opening Morgan, strong I business. for process. the seeing Austin, this my comments, particularly and in uptake, business, really question. shared think in as both and we in thanks, John And Morgan, disciplined along as we’re you I with making feel progress

real specific. on And expectations to met so overall, attrition it be our

on commercial. feel So quarter and about the good overall, we’re very where heading

please. question, Next

Operator

Next, from Credit we’ll Rice line Suisse. to go of A.J. go the ahead. Please

A.J. Rice

growth. for know margin Hi, the swung trends any this a MA comment business. to just and to I Thanks landscape out in I’m you’re files on way government. of around in Maybe if know wondering that bit at growth any to next everybody. further flesh government said, year? parse get Can what little question. year-to-year date. early And then in read your you you there? you I a John, the decline more on out bit you seeing I little the the a solid a the there’s just little just expectations bit think,

John Gallina

A.J. you Thank the question, for

more said can for viewed for know, isolation, and we’ve and, very a Medicaid, XXXX. when And our be significant nicely. to Government strong, actually misleading. results. posting and but very seen has year-over-year. variable is continue Business So basis, our with past, in quarterly Medicare by expectations growing could one think certainly year, I any Medicaid have quarter evidenced been line is perform and bit performing as in we’ve you And to a consistent is Both And be well. the strong division Medicare going that’s this growth to excellent for swings. performance upside the we’re the on some XX% top susceptible results Medicaid’s be over of

and industry. the premature a in the the will the about for the more now the that several ratings Advantage think revenue of basis that to Medicare that ongoing. and it row feel scoring I to comments, areas. accurate we specifics very to do star enhance several percentage terms growth, in well talked for Medicare XXXX is next on allow in complete grow associated our goal in our of prepared about positioned us you and book. a my faster for that We those years expect If the improving provide clearly to XXXX done And last And have growth. with future is than But years risk

So the A.J. for you thank question,

Gail Boudreaux

color confident our our just Norwood, I’ll bit A.J. growth, said, Government thanks, little Felicia on little It’s marketplace. give you feel how early. about perspective the Felicia? And above-market We as Yes. ask process. And seeing we provide to leads Advantage. Business, AEP started she more but can we’re just Medicare the a on who a John Maybe

Felicia Norwood

Yes. Thank you, and Gail, good A.J. morning,

was the early very annual positioning. election we period. in But our favorably our lead really competitors, As benefits, Medicare think benefits of they social and far we competitive everyday certainly certainly pleased seen members on the in what and Advantage it focused about our our health we’re Gail with industry said, When of terms so addressing the really those extras, with supplemental we’ve around and those of whole our transportation needs over-the-counter offerings, are that health. our drivers things compare

know, and you our HMO side a then new actually counties into the by XXX from XXX expanding as Additionally, footprint improved on perspective. PPO counties we

in as and in this we getting into early are channel good feedback head positioned Thank continued forward how based business. you. about we’re we AEP we and on while process very feel So we’re look growth the from this distribution others, our to

Gail Boudreaux

Thanks for the question.

question, Next please.

Operator

to we’ll line Wilkes Next, the Lance from Please ahead. go of Bernstein. go

Lance Wilkes

you a into rebidding contract go-forward with a you’re then XXXX, if or of with the the in on strategy CVS wondering And is Thanks thus sort entering XXXX far in process about basis you’re what what that. in the bit that self-insured cross both And morning. IngenioRx? talk little a and sales for in Can I’m is progress seeing for ending interested Thanks. book. good just

Gail Boudreaux

perspective Pete we’re Ingenio Ingenio. a to really, leads the strategy. our more just who you But Yes. on give really X:X some X:X seeing going to Haytaian, that business, Lance. question, growth importantly, for say integrating Thanks overall, pleased I’m into really it and in strong have I’d

of the market. you Pete? Pete seeing in lot think kind more on a I provide we’re So granularity can what

Peter Haytaian

Yes. lot. I’ll Thanks a question. that answer

We both with pleased performance in Ingenio. growth operating the are very the and

Just little on that. bit color to more put a

We are, different trying to be a PBM. you know, as

about through and health we’re that seeing We’re to year, ASO a net members X:X on nicely this value And to the new growth year. as terms relates proposition. to the specific improvement question your does whole about in talking integrated we’re play XXX% the that marketplace. it year-over-year in X:X, of This selling continue

a activity. we move in strong Up there’s We’re prospects market middle well But actually forward. integration little where perform especially light in. the where very, performance situation expect, we RFP very growth good and the stickiness, seeing in about more well. overall plays very down say we of really market would I’d our as we’re you financially and bit good very as feel and economic

As we selling already well into next head year, season. we’re XXXX into underway. the It’s

brokers a have growth. Again, in feedback visibility The now perspective right we’re look and down on middle good lot We getting of our good. rates we’re from the a activity our market. market seeing really the from distribution is headline

that to focused very on services. The other is thing additional we’re and upselling it relates products as Ingenio

cost programs, and condition like things So relief specialty programs management digital adherence programs.

in moving it’s So the right direction.

Gail Boudreaux

Thank you.

Next question, please.

Operator

Scott go ahead. Please Fidel Next, we’ll from of to the line Stephens. go

Scott Fidel

improved and environment you in states if the couple some managed competitors and in Thanks. having momentum of particularly other some could the of Good big – RFP with right shown Was talk cycle competitive a pretty recent a interested active of the we’re and now results. about bit Medicaid just couple morning. as up a with a Hi. RFP coming

competitive right in now doing what or interested strategically So, try just of edge the Thanks. Elevance then is backdrop to tactically and Medicaid. competitive keep to your

Gail Boudreaux

Thank your question. ask to you. Norwood Felicia to I’m going address

Felicia Norwood

been delayed a a the has the where take know, look RFP right, over around When process, think, past significantly positioned health certainly take in I wrapped always at look many equity, part process recently of success. our but become states are, you’re good have competitive, as our at the been year up well things RFP or health. the Scott. space really really has the So, so. I to hyper morning, I focus midst Medicaid around of population be, we but COVID, When continue competitive you certainly and In respects, it’s we

working referenced our on earlier areas Gail focus here on health to respect who health can and improve been equity. those specifically that at NCQA health heard partners And outcomes them equity distinction state You with we’ve Elevance Health. help our certainly plans at looking are

that So certainly first, Puerto me RFP the health in address state at We ability been in significant, very When recently and for to actually for us in for state continued I we our in our needs partners. RFP on strong and new our to was win we’ve Rico a county, of and opportunities, approved members partners county won And needs we a in look the every and county up performance about elevate re-procured us, to ability a California I feel advance district. coming of a win terms most a of local to momentum Council focused picked was able win new for level. address our kind strongly were also that the City so really the there. our us. in having DC big at recently the a of yesterday strong demonstrated our We

the to to equity, continue are of around know our I we focus outcomes proposition, important and to advancing we needs health see as momentum they issues our being our and on continue to where partners. that value members to very So respond state our able improved Medicaid customers those state meet are

Gail Boudreaux

Thank you.

please. question, Next

Operator

Nathan of line ahead. the to Sachs. go Rich Please go we’ll from Next, Goldman

Nathan Rich

medical the question. on cost for ask Good morning. to I Thanks trend. wanted

in John, cost in I that year-over-year, year, I it quarter, excluding a but the little MCR Last expectations. than have half accounting being of adjustment. the like was bit you had medical about come back elevated better might the think sounds the think your flat talked trend

out And for we business? just did by year, trend as could add out what a if costs thinking will you this expenses? And into guess, impacted whether provide of play importantly, more adjustment, will quick future the think how about change? benefit line see Thank periods what on you outlook be of And utilization your by moved are I accounting next you details clarification on could you. I XXXX? So

John Gallina

Thank you Nathan. for the questions,

So one accounting first easy let adjustment. was and me the do the that

requirements. and always therefore, quarter, the as CMS So classified expense benefit the cost In included during those clarifying guidance that quality on types considered mirrored the in GAAP improvement that our need the be and can of SG&A. be presentations have to definitions provided versus third CMS historically cost

CMS realigned reporting we So clarified those when accordingly. our definitions,

impact then And to X.X% just a negative line, SG&A with third was on impact so X.X%, clearly quarter a be the about to on which no reclass. improve by MOR impact the for about clear, make the bottom would the

XX to of will a point terms, And each and we For impact those. on year, in always, always there transparent. try about the full then be fully basis be

aligned wanted point and for with. what we clarification reporting we provided the MLR everyone aware XX about So, a year to this ensure by of that will end nuances this of the the benefit basis see in we that CMS of to was

membership and flat, because that higher helped a of been And hopefully adjusted the of then would’ve without in general, our is of which reclassification, ago. from nice you membership government So you’ve trends in a mix percent and Since utilization basis. out it actually a mix our terms our the year now improvement is a that fully MLR costs was stated, insured pointed a the on of perspective. than as

occurred. with our in the structure come be of bit never line trends is overall health think is did cost each the been I COVID in a this than better still most would’ve quarter businesses. But what higher in than element continue expected, expectations of but system of to our lines all it of important So had our third that the

better levels. line. in lines So, is Medicare much historical Medicaid is of associated than with very businesses, doing slightly

several And outpatient to last higher quarters been a in where a benefit a but inpatient. outpatient bit seeing than inpatient seeing consistent that we’re We’re helping so with has continues more have lower, commercial even very the be to bit then more normalized higher, our offset and trend.

of that’s of been part the part so all and all the process And guidance.

but your comment time, XXXX not that answers questions. at on we’re this to hopefully in all obviously point going So,

Gail Boudreaux

please. question, Next

Operator

Valiquette Next, to line from Please of we’ll Steven Barclays. the go go ahead.

Steven Valiquette

Good thanks. everybody. morning Great,

your not own So, into I to key members Medicaid commercial ineligible curious and guess into just in whether Elevance any regarding Medicaid ineligible your funnel potential evolution XXXX guess allow your migration exchange more members states I’m plans, been might exchange of there’s directly own I the plans. the or in that

Medicaid versus XXXX all ball be ago? for would a it next still Medicaid could members environment Thanks. market to ineligible just stood the for describe the the try of industry a of So now is big kind year for to controlled maybe MCOs this really more a jump process Or grab just where you year?

Gail Boudreaux

for thanks Steve, Well, your question.

states, through discuss We’ve I states time clarifications I data time plan different do past. across very, few our to and think to process. we the that process, where of that and bit working had we’ve And each couple as our things have we closely I’d the this state our a say sharing but a us specific to been we’ve a will just in go of a states we’re very with that for of, this with a important One, a are can, enterprise. allow think that. and each long with shared long this you

organizations with process, for coverage. foremost, for right just where probably is first start et ensure to cetera, eligibility this sure and that right also retains that’s We’re administrative the community make ensure the And coverage think program. eligibility those, they that that who’s things, working eligible everyone for we whole in because that we of have I that

For be to education for transition. the we’re commercial our those think working provide, I as as are to not most our business well going business again, seamless and across eligible Medicaid, Medicaid that

our business. If a of you little facts bit start just for

the footprint the XX roughly cover states, you million our our those our now business. If incredibly of those commercial X.X grew pretty share, strong about footprint, only market in states. but all and much think Medicaid part exchange, beneficiaries not membership have as XX in We, also counties in in benefits of in of our states also commercial states exchange

actually this our our as recognize doing, we’re we own to million see community there’s our our they of approximately recognition well a well, came partners, educating positioned those jump positioned million it members brand in Medicaid members opportunity, in and those know think business the those don’t of members think frankly, to involvement, community PAG know terms quite our So, obviously membership, be well – result a commercial our obviously the membership, an quite in again, as work X.X and and dedication we’re brand. with they of And with We states. us we ball. well,

state the will help so, that on transition. very rules, closely be again, regulations to and working based And

call to the it here. just again, to jump all is be lead that with opportunity like, and we’ve to the than coverage, had a time our our move market actually to plan work process the to feel goal real an the from I who this members have a with I those is administration, organized opportunity given going for So, more would much which the states, primary keep in guidance those

again, to So we on the look continuing everyone you. question. for Thank thanks And our to forward update there. progress

question. Next

Operator

ahead. Please Next, line Cleveland we’ll of from go go to the Rob Cottrell Research.

Rob Cottrell

that my question. all good increased been seeing expect financial and next Thanks care the to I conversation about wanted out to for you negotiating about contracting impact market or adoption. your Are And for across health Hi, team? There’s do over negotiations have systems. value-based taking two? positive ultimately you that pressures to the environment health play a your just year the you systems some ask I guess, across leading morning. in with

Gail Boudreaux

third I we our are on again question, think about the so Rob. each of them well that, contracts A year. duration, documented to it’s thanks negotiate three things. Yes, year-end a of a couple One, been

discussions. at long-term little products, clinical affordability, continually of But contract that and say obviously are continuing gives deals in our sort offer we context trends. is we I pressure that and range coming proactively managing strategies, overall, cost ensure So our normal you are system. within the our can to Clearly, to our the to there just would look maintain more a in

very, While also review costs. to We as very it’s particularly affordability environment. discipline for we to underwriting our Ultimately, forward seriously. maintain that’s you, economic our paramount those in this our of shared customers, with price take that

about double contracts a in lot lot contracts frankly, shared to We’ve are our total quite And our discussions. and with a share we’ve and of a low of in we’ve those I’m digits providers, where goal least in value-based this risk. having with our downside value-based, to those your move in last at made our really were we to downside now year sort on in XX% question the good you roughly made third Specifically teens progress really high more contracts. quarter. is even that progress risk. we of of And value-based are last in now by in pleased XXXX to

goal as progress well our downside to making value-based more So great risk in against get our as contracts to care.

value-based that more to there do So an we care. to think back to opportunity is your continue to question, these move of

be providers just the but reduce with continuum. care that is broader seeing hospital not they other also on important a the in And administrative to I to the care good face. looking thing partner we’re how burden provider think’s trying that progress our are the We side, across at

call I the work data increase how care that review addition accelerate those So processes we for think do of rates. sharing, doing – reduce trying to the have on opportunities just we’re to in the And well, may I’ll some us as big highest administrative value. not are

that we right normal we’re anything progress of seen have we’ve very care we’re overall, been these ranges seeing work not continuing committed and outside So that, and our to with have now partnership them. to obviously, so providers But a successful with there good with long-term strategies.

much for So the question. very thanks

Next please. question,

Operator

line Please Gill Next, JPMorgan. Lisa go we’ll from go the to ahead. of

Lisa Gill

question. taking I Sydney today and much comment very to Again, back your my for to earlier healthcare. go Thanks Health virtual want around

per So month. you talked about, X visits million

outcomes a I’m cost of utilizing care care? my think You about quantify doctor are to then So virtual? the we where improving that when When secondly, is potential the about question. way in. and primary but costs, benefit really XXXX, primary a interested is first a would virtual be premium, in And where there think offering have lower you about talked you marketplace your product we

Gail Boudreaux

So some commentary, thanks going Morgan to just to Yes, ask for are. question, but I’m we the add overview. Lisa. an

door first, healthcare. is to our front Sydney So

shared opportunity us there the product more much our early we’re as and But that it, offerings a have about talk saw we care all efficient way. couple help a the you of data of embedded the of one to also manage in really primary care chronics you well. some what have around seeing that an with I One, we is strategy. So in Sydney. delivery are our of And capabilities things. elements Morgan And virtual

customers And selecting. lot it’s are a seeing also so what uptake in that. into we’re embedded our of And

we’re Sydney. lot of inside capability So adding more a

to to affordability bit for of turn me share quick about of an with let offerings the a very little you over strategy, facts, is our element So couple a product important but just Morgan market. it the which

Morgan Kendrick

continue adding business Thanks is we’re and this those a commercial can Right, half. And such, question. But all physical that the for also we to year that and Y thanks, first we’ve economics is to build of products value-based connection works. you move a as virtual would around of concludes. one market, important primary the where physician value-based end. opportunity risk have self-funded January the the the world have it. fresh been to question. the in into of is partnership are four which already are of of launching keep tight The are a assets. And indeed attractive group the as launched the in virtual that be and anchored makeup. cohorts, We’ve that different. us. nice over beginning for allows for modalities versus single expecting When is to to entity, that the that care this market, Nevada first to loop and But a speak, the connection. network Z and the of And enrollment Boomers generational X, how are thanks Various as constructs it Gail the the with business, One elect we’ll physical our a business we a got component very of Lisa digital commercial with such, engage a pull but our the again course so in And they Gail. quite with for past them actual certainly you’ve particular arrangement combination period think through about within products closed layered described a components front on our way integration, to opposed that part a in strategies a digital

Gail Boudreaux

high we’ve that tied Yes, aligned but the capabilities for virtual embedded of to it’s reiterate. But to itself, virtual performance lot as just our a really network. important networks. network in products. virtual performance I not high sort and beginning it’s And board. that we then thanks, want we’re talk Morgan just about marketplace our that costs One driving we virtual growth. It’s of physical the but say And Lisa, with a of performance what’s again, for earlier aligning have across second, – been days, best affordability. by they again, have said, two only we’re concepts And Morgan. would in also assets to And our customers those strategy. to And I launch or number high our

outcomes again, best to cost drive really for So and and trying our quality members.

Next question, you. please. Thank

Operator

go Next, we’ll go to of the Please line of from America. ahead. Bank Kevin Fischbeck

Kevin Fischbeck

guess, in I the of mix recession. a Medicaid, about go the guess want comment each between Commercial, recession. impact two I about of the historically a of the company back prepared businesses Great, thanks. kind other and the balanced during comments made John kind business how that a to has offset to I talked

didn't recession as headwind. as I'm mention first guess So one, sorry, I a tailwind, you a a either

company a like recession, recession don't severe has how your that no assume we So modest that the a guidance mean a how I about mix? should given that you you do it's assume one exactly assume, you And that Thanks. or business does mean impact? what a that if then think impacts Elevance

Gail Boudreaux

history. business is But much a that, whereas business, and also that our for we company's I'll environment of series than I talked across facts XX% one time just business we been Thanks broader One, in that tailwinds, are a there's of the a terms our about Medicaid. that, our reference was for And in of specific take Kevin. commercial other where economic environment XXXX. address around few the today premium want known things. which economic are mindful think roughly John scenarios. He back he at some the did any because XX% that to diversified putting in in you number of and under planning headwinds whole have we're Yes. in the I more we that our question,

commercial But that, you terms seeing as for you last think to in bad in products able fee-based growth we're value any our diversity that. commercial both the haven't on, businesses times. just ads impact of focus in a differentiated the but seen economic our strong driving able times been affordable strong, continues today. in our been And as The in and to so good in we've our clearly we business We've still economic inside demonstrate And of heard business grow, our business. of is about perform consumers. and certainly to question, stronger

talk Just fact we lot our a business. in that quick a own about

to our as of growth the us. consolidating with some single been carrier another added for January of eight discerning have with years. fee-based customers several We over in this the business most seen multi-carrier last additional year that Our from clients you've we consolidate

proof we we right that. resilient. for businesses from also where are Medicaid full more coverage then tend last environment we to these and a in We're the a and our just subsidized now to the So in the in business. of in that a different in, also have points the ACA say on individuals now in in than we also as have obviously couple opportunity And business times ACA were very And recession counties of is us, premium plans of the business. think heard grow some Medicare manner. didn't the, And quite then I in well recession, we commercial have go zero exchange you terms of and resiliency our difficult would take

across in can trying in We've to structure. our ensure economic it certainly cost we're heavily and we investing an downturn. of own digital mindful our businesses. book for So, We're planning been our maintain that

of playbooks are things business. inside those the kinds of that our we and So have

that So much in and thinking more have do business, business our business a we business we're the much that diversified but a in past. and it it's as we planning dominating resilient one not not line about feel that more company is had

business have a to Caroline affordability big obviously I in add would to Caroline and So, – more that risk. health opportunities for additional of times on our plan we I impact also roadmap the adds, would and add take ask

driving got Just a examples We've affordability. that a couple of about again all the myNEXUS. think and there, I shared a, long AIM this and I runway morning between is

of we it. strained. in where got market. we're nice guess the we've critical planning are and I kind And than prudent breath Yes, ever are value putting now, in diligent. those yes, so those customers And the And feel we're in that much that products we've affordability a So we're be a going nice is we to second, for short, and know right a had. of being market more differentiated

very question. for much thanks the So

please. question, Next

Operator

Next ahead. we'll line of Please go Taylor to go Cowen. Gary from the

Gary Taylor

looks that on individual themselves Medicare at of higher Hi, as for where of it in for the And level out clarification rebate maybe special just funding quality then than quick chronically benefit? I re-class John wondering XXXX particular I look percent quick your your in that? from a stands Felicia of there's good just supplemental Had the key retroactively was we G&A; morning. of John, just offering, and the then your offering competitors. then on your looks incentives and benefits for really what why of many a there places substantially one like just implications MA – mean Felicia. to ill MA the Thanks. for really individual wondering as benefit and any benefits focus the avail will improvement one that specifically if Elevance

John Gallina

over reclassification rebates at they're you, while commercial, in we nearly turn de-minimus. business our, are of impact majority as do then first Medicaid of not in vast in your they it in as part commercial I'll terms impact was the of Thank have it line rebates, Gary. second this in of But for The occasional answer point and Yes. of MLR the on that the prevalent the your Felicia time. question, some question.

line I So there why was bottom there's that's really impact. no Felicia? virtually said de-minimus

Felicia Norwood

that's Advantage business, the an individuals takes focused Sure. our always plans we have always area And And dual who to Gary. look When morning, complex we've think Medicare on I and special a look been that are probably third been you as respect second. at at to needs and where largest our the these chronic. our Today, think be portfolio grow. a very to to about footprint have Medicaid represent we eligible be differentiated. good I to we're able certainly business and proposition individuals We our able within to believe Medicare a within with take capabilities dual footprint we sit value we a individuals as that look – deliver Carolina

how able way to when the are to strategy certainly we we So competitive based and look at around take and those that's in in being those work on marketplace those stress and priced with is appropriately a individuals differentiating. look playing partner our or do a to individuals

us about I ability duals and specific way the structure their our needs. gives that So products cost we think competitive address our to think certainly the

Gail Boudreaux

you. Thank

Next question, please.

Operator

SVB we'll Mayo Whit from go Securities. to Please the Next ahead. of go line

Whit Mayo

that it. to I your of And is go and what delegated Any are percent to, put then way time? business for spin or way assets? Just kind targets for a MyNEXUS some the for of frame post-acute any your MA to Hey, second. around just what today over wanted Carelon being to back any numbers of other to quantify

think, have underappreciated tail I this. I that around may the

Peter Haytaian

for thanks the Yes, Whit question.

of We've not We the for this a advantage here July. middle from seen our of in our going launching post-acute is that, in success. we're But specific terms on journey started business via to perspective. goal get on to offering of year Medicare all post-acute numbers percentages care into really this sort cover that. MyNEXUS the In of good

September. another in had integration also We

the Medicare complete early markets XXXX. will all in We advantage

all can that post-acute broadly it the will population. covering Medicare that for as care to more management And assume so relates business, we the of be you management

Gail Boudreaux

increase Yes, we of is Elevance XX%. that around And and more the Health. spend continued that do Carelon And that it's number thanks Pete. a for manages has share broadly percentage to

on. bigger give of we it's number continue bit to have will just impact So obviously perspective, a we little and a a that, to you

please? question, Next

Operator

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

Dave Windley

and Hi, thanks. renewal. talked about Jan successful. could about more being come X, to was for catching confident put to July then wanted or John's commercial the X you than if help that on even to which a point back from growth Wondered extent do your and prepared, I comments Medicaid same renewal those confidence, around factors catchers finer benefit that you drive what factors met redetermination. beyond the And

Gail Boudreaux

your question. Morgan to I'm going to Thank address you. ask

Morgan Kendrick

we think phenomenon book planned, we The July played very the in obtained, was it as attrition exactly I the To express that in course January and we indicated confidence, Thanks X. – renewals we out and we're that that was expected. certainly Dave. that same some we're for as beginnings of seeing needed there of

we last actual in now. right the the the which we're We planned of reveal of pricing year, shaping sort and then pricing business. the think that fall. differently sort I confidence XXXX to got as early for or position is earlier alluded was That's XXXX spot up things see as in in in the

very really non-risk our perspective. part strong the the catchers business nice of concept business individual that we in to market of XX% or that's the think to redetermination, footprint cover for alluded are be with to side. job we confidence a so commercial penetration to then, the the group side, the Medicaid be the the that about of and stays Gail speak individual. population we the the Medicaid this commercial catchers So we've risk it met there. move When in expanding numbers, also going side. would in There's have there's from that met, business on group a fact in – done to a commercial ACA And of geographies roughly serve

results the B Difficulty]. A in confident we're July we're in all So [Technical from how

Dave Windley

in. for Hi, thanks Yes. sitting

up to to one renewals bit see all one the of more I a some what smaller on than to to in-group whether quarter. you the seven risk or trends. larger, the get that, impact guess membership I Thank whether those what little we sense ask give sense maybe I'm was trying can were follow by attrition was of hoping business. you gets Are starting wanted economy on as bit little the of the group could Just a us maybe the decline the in trends a slow a is basically attribute the uncertain? those masked in-group you. and sequential

Gail Boudreaux

the for question. thanks Yes,

I response. haven't change recession sort think the I in and actually think it's We in of total, a a little really shared this lot seen of bit. I in, in-group been up

So commercial so where business and any attrition the I they're of stable. onto across on as ads. but seeing some it's call think are, number running got been net think wouldn't they've jobs our trend, employers I any about, side employees, necessarily are And you yet it a their fairly open, we're of still not seeing holding impact a actually

pleased much have the confident thank executing year. to you, all momentum interest question. rest operator. to the our enhanced our positions strategy you and Thank you that our our we're conference We'll of So based stakeholders. an investor great with at shared in value Health to And us thank keep are discipline continue your In across you and week. and of deliver we financial targets with with for Elevance for of businesses last a excellence the ongoing our broad very execution closing, against delivering

Operator

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

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Elevance Health (ELV) 19 Oct 222022 Q3 Earnings call transcript