ELV - Earnings call transcript Q4 2024

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to the Elevance Health Fourth Quarter Earnings Conference Call. [Operator Instructions] As a reminder, today's conference is being recorded.

I would now like to turn the conference over to the company's management. Please go ahead.

Nathan Rich

Good morning, and welcome to Elevance Health Fourth Quarter 2024 Earnings Call. Rich, of Nathan Relations. is name Vice Investor President My a Carelon; call on Boudreaux, CFO; With Norwood, of our of and morning quarter our of strategic the of the with Benefits initiatives our earnings Benefits Commercial Pete the XXXX Kendrick, progress are begin the Health business. Gail and President of our President will Kaye, we've and outlook. us this Felicia Mark the Gail business; President Health CEO; President call Government review made Haytaian, against Morgan discussion and in Mark detail. our will then financial discuss results and guidance greater After our Q&A. team be available prepared for remarks, the will

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

forward-looking be this will on making call. We some statements also

from these advise and our Health. quarterly results Listeners the difficult are control factors press in to and predict to are statements and can many and review are of to release of subject SEC. cautioned risks discussed in expectations. the uncertainties risk beyond which certain by our that differ Elevance and generally filings to cause the carefully listeners uncertainties today's actual These risks materially We with

the to call will I turn now Gail. over

Gail Boudreaux

morning, Thank you, Nate, good everyone. and

million are Before California, X first ongoing working the of people members to to especially State and affected Health who we efforts. begin, X,XXX in wildfires. extend are support of the over I'd over tirelessly sympathies the the grateful by California responders millions like our deepest recovery With the associates we Southern to to Elevance

communities essential moment aid health to supporting mobilized devastating quickly teams much-needed facilitate dedicated and shared impacted we health community resources the reminding a underscores humanity, that our by well-being. provide and This us above this are our to people's access event. to Health Elevance all, At to

and a marked humanity health dedication the profound and we of steadfast demonstrate improving the a health purpose in care the as improving to of by remains lives leadership Our of absolute, people company compassion, will we serve. commitment

critical a is in compound that and with social evolving to the for a care. For and accessible health. We ecosystem more administrative behavioral significant are care role consumer challenges, physical, costs, expectations These affordable care. simple, ensuring access in issues grappling and disparities our play by the and members, recognize including rising approach complexity we integrated health to need

In our challenges reducing addressing collaboration our processes, across with the industry, great the experience partners members. improving focusing on and with we're these overall for streamlining urgency, costs

experiences, recommendations We specific are reimagining personalize tailor how their health journey. to care needs to and meet simplify we consumers the connect with

Targeted digital would interactions XXXX, through closed our to estimated find X.X otherwise million in spent they critical and gaps they care an members have trying hours Sydney the care app in needed. saved time

ensuring care outcomes in play preventative and have high-quality for inefficiencies, our to reasonable by overall care a benefit care access early insurers costs, vital these affordable members. drive at and Through health Health we reduced with partnerships that providers, we and encourage kits valued lower have intervention. designing better keeping health cost role members structures

XXXX, offer with XX% plan innovative benefits. have premium demonstrate all no for nearly and for we $X designs of portfolio Advantage our how supplemental These plans member visits Medicare care our In align to access primary affordability health. plans and co-pays monthly improved

likely admission. inpatient preventative benefits demonstrates who less likely are to that an have XX% supplemental utilize access eligible XX% services and members nearly data Our more duly to

health Score care before of program like address complex whole Total Solutions needs advocacy channels this our outreach recognize Net You Health, personalized the digital value a Employers arise. reflected Promoter person through XX. in program Total and brings, enable

members. by a active contract, our be partner to in care create on an impact real going we the the health providers, of strive beyond and care our For we

XX% over programs value-based than nearly Our account care just risk years with for compared of XX% ago. to less taking today, X downside X/X

CD&R. our serves enablement Over Health for broadened year, launch capabilities across us primary of of with and partnership our in past in Mosaic to the and advanced care we growing to nearly the Health years expand solutions XX serve X to come. physician foundation the states Mosaic a through provides people the million consumers number

nearly systems. the health significantly where information, cases administrative caring We claims allow or data have time In that burden to real-time for have invested for providers and the with aligned care have physicians more these eliminated patients. due denied partnering system, we insights significant hospitals and tools to with resources devote in to provide incomplete easing sharing ease and we incorrect to administrative burdens

We are making more good partners. progress to in expanding the solution

health and we information, have decision. make the to access providers same care plans When the same

concert in drivers more our of that effectively the behavioral advocate partners communities. social health. working for solutions to ecosystem and health vital can empower unified care are across healthier solutions We this with outcomes enhance many voice, With that physical, and address promote the we holistic

tirelessly promising work the achieve on health our will improve purpose in to a are years and We humanity. bold path the to coming of

business. fourth per unprecedented consistent turning diluted trends took our of in $X.XX share action immediate in the expectations in with and we October. cost share of results. Today, earnings we $X.XX, response adjusted per our GAAP Now These the we quarter to reflect shared Medicaid reported results to back diluted earnings

for individuals serves health conditions. outcomes in and managing Our Medicaid complex chronic as business advancing a cornerstone

a programs digital the inpatient management emissions and support X%. that to care led by resources complex of a dedicated Our reduction team have in provide care

outcomes uniquely our health are through to and of better Health We complementary capabilities integrated Benefits drive platforms. Carelon equipped

quarter. we aligned to Medicaid at outlook provided quarter Fourth cost trend elevated remained last levels the

of We collaboration state are and constructive partners. grateful the our for continuous

level Medicaid remain elevated the remain reflect we are that to will cover rates our time. While ultimately cost experiencing, the confident rates acuity of over trend underlying of today insufficient we membership

XXXX growth. benefit profitable a Medicare, exits and In create foundation strong reductions in market for

range with wins expectations XXXX. in growth inclusive MA. X% value During retention. annual prior our ability in of confident the of enrollment in performance balance improved X%, to Advantage anticipate the We new evidenced and growth in consistent year, benefit group this Medicare in open and by stability offerings, remain seniors margin our to We membership our

commercial with pleased businesses performance our of are XXXX. the We in

offering integrated and Elevance XXXX, trend as provider Our for welcomed is few source several manage have last new XX medical chose and we selected We the national including resonating sole their Health in benefits, us seen a to medical market. accounts who the years. the who in continuing pharmacy pharmacy

we national simplicity and We for retention who market's also to and our a XXXX, largest business saw in value most the differentiated sophisticated the value record clients testament affordability. provide, accounts

with we of anticipate of we as innovative, in strong And this XXXX, another delivered XXXX. Our in market. more XX% individual affordable enter growth experienced exchange year strong We than growth that business resonated products consumers.

growth. the Turning chronic we our closed complex fourth made progress members we to against services acquisition a strategy business. and Carelon quarter, and and In home Carelon, the foundation on community-based in of our scale home- which serve for for flywheel XXXX, as for will CareBridge, our enterprise further bolster to health

health with and and CareBridge's on breadth pharmacy, innovative comprehensive community-based quality approach and diversity improve serve solutions our well technology members and drive health, our advanced home clinical of primary expanding enhancing and care and to our enterprise utilizing plans. focus care, independence. and support whole patient alignment while The with aligns greater will outcomes efficiency,

XXXX, internal the this target year experienced our long-term in and segment range Services are we in in revenue above external growth ahead. [indiscernible] impressive for Carelon and growth for

expectations to for Shifting our XXXX.

share earnings adjusted the $XX.XX. in for to guidance providing of diluted are be $XX.XX We per to range

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

our Carelon impact of to trend our clients, for continue assets ahead manage cost on the execute deepen will We us. opportunities the growth of and

enhance now underscore least over earnings of at annually taking our in The enterprise our will on actions XX% power the returning time. are we growth long-term EPS confidence to average adjusted and

my for of to over express like our associates deepest would dynamic XXX,XXX to their industry. team this unwavering I the period efforts gratitude Finally, and during extraordinary

last serve to of beyond privileged in tangible Our volunteer communities commitment Elevance associates collective the hours a by Health. improving the health call communities, dedication over home. remarkable on humanity XXX,XXX of to making our underscores went impact the time year, our are and people for we positive logging above record we setting This a and

advance beyond we work members' our partner ensuring As on mission, lifetime trust our health our focused remain care. being and we health elevates health and

call hand details Mark CFO, results provide Mark? I'll guidance. on and over to our more our Kaye, who will financial the now

Mark Kaye

you, Thank good Gail, and morning, everyone.

of As results quarter full Gail share noted, adjusted per earnings quarter diluted $X.XX fourth we expectations. share per diluted adjusted and earnings our reported fourth October with year $XX.XX, consistent of with

business. Medicaid helped navigate primarily our execution elevated operational within disciplined Our cost an environment, us

a segments. the of We areas decline and annual employer million group our roughly compelling Medicaid redeterminations XX.X offset competitive to million products. from but stemming membership was value year-over-year, year driven members, partially changes decrease and footprint, These ability growth of by plan continued by geographic our ACA fee-based demonstrate reduction in flat concluded in This in sequentially. market our deliver with health offerings our X.X growth

Turning expanding $XXX.X our This revenue to relationships in X% Medicaid reflects of higher recognition membership. revenue. XXXX, prior billion line We in total trends rate customer year. by cost well generated up top premium for Carelon lower adjustments the from approximately offset growth as operating as businesses, within partially

Carelon. acquisitions unlock and we for privileged the priority will we our be as serve, are coming pharmacy greater in enhancing the these for particularly assets home goals our from ambitious value services that further in growth to A We enterprise integrating also flywheel. benefited drive year members health, to

expense with consolidated fourth benefit our XX.X%, for year items. full line ratio the bringing Our to XX.X%, was quarter in ratio

experienced cost continue remains previously, levels we stable Medicaid quarter. to population, exiting at elevated we trends noted the third the see which the As within

rate adjustments to premiums better We partners, from costs. which are are state care our the by with encouraged align current helping

margins the reflected, become As we fully over these more course to improve of XXXX. Medicaid expect adjustments

the points year. XX.X% respectively, reflects ratio disciplined on and adjusted XXX our versus and the expense XX management improvement efficiencies. full stood This of Health's operating and X.X% for prior Elevance an expense quarter basis focus year, continued at operating for basis the fourth points,

billion year, net the was For approximately income. $X.X GAAP cash [ Xx operating or flow ]

compared the and third aligns XX.X long-term Our days, year-end claims quarter low in XXs. payable target days with our in to the essentially flat was range

opportunistically billion, the our returning shares full in bringing of strategic investing our to initiatives. year billion shareholders exceeding capital In We fourth committed to remain $X.X X.X and million repurchased for total initial repurchases a while $X.X we to quarter, forecast.

to XXXX, our $XX.XX of share adjusted specificity project our exchange million expected $XX.XX provide by we ahead year-end Looking for total of ACA XX.X to We fee-based greater earnings to the XX.X Advantage. growth plans for around million year. are introducing and commercial per expected by Medicare view membership, a XXXX, to driven Medicare performance our of range membership diluted in

with reflecting million, single-digit planned million X.XX an Medicare growth enrollment membership Advantage in ending to individual group MA. expansion Following expectations, X.X and XXXX in with anticipate in period high we annual our line MA of

we anticipate range, CareBridge. in the performance, line low bolstered acquisitions to top by single operating revenue double-digit In percent to of terms grow high like

We basis D expect to roughly particularly incorporates our redesign This consolidated points, well and XX or from within at the cost plus basis around Part point impacts Medicare increase acquisitions medical be XX midpoint. loss trends, as as persistence XX.X%, elevated the Medicaid, of ratio recent changes. minus a benefit

expense actions structure. to enhance to plus slight minus operating basis XX.X%, a adjusted be we year-over-year expected improvement our implying cost or ratio targeted Our points, as is XX pursue

billion For a normalized first approximately or repurchases the to XXXX, cash half of with we billion roughly the a net towards bias anticipate flow income. towards GAAP We $X.X Xx $X operating plan of year. more allocate share

with annual our to the to first the This just per increase dividend I'm to has quarterly Directors announce shareholder in seasonality, increase. XX% and that our adjusted a first approved more half returns a pleased commitment to reflects than of figure our quarter. slightly expect over half consecutive coming half earn share, XXth business the $X.XX to earnings in we of Regarding XXXX, balance of resilience also strong of delivering our EPS speaks model. of Board first X% in that our and

to XXXX, and the diversified We of and Elevance remain value providers are growth. and priorities expansion foundation building sustainable confident even our while With our business our for strong we continued shareholders our on in our members, execute capabilities, a Carelon's in to meeting objectives. deliver to strategic ability Health greater model investments in long-term financial position

to back you Thank your the operator questions. time your today. will for call for I now turn the

Operator

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

Albert Rice

are here, this you're which your you've that full discussion you've but And the enrollment. think financial lot of attracted open you down targeting of know I Advantage So agents in biggest the demographic there like of has so it's the in fully to what not been of from or members largely? you community certainly of the business, open Medicare mid-X% for -- types in X% enrollment the enrollment? as of seeing got business about it's a drill view year. that at just Is point? you sort Looks reflective Maybe

think the be then was for below Medicare the the in but Medicare still might And 'XX Advantage quarter that just Is so -- on your modestly your Advantage. margin I that targets still step long-term comment third thinking? up

Gail Boudreaux

you, few Well, comments. thank I A.J. just a have

very good the enrollment had retention is a did for Medicare guidance and feel positive confident that that think gave expectations the huge we It we First, set, in we line about Advantage. come and member we in with we very good for us.

we'll overall, we where good the little detail in ask give of you So bit end product but geography and really of and Felicia terms to maybe positioning think a do it, I'll overall, that's the more year. about and

more So little Felicia, bit on a that. guidance maybe

Felicia Norwood

you thank the for question. And

said, markets of period. member really the that our market were predominantly year. significant for we was reflect balanced value driven with retention growth opportunities As Performance the enrollment to trends and enrollment really our The with on our saw local annual favorable were Gail in really pleased approach. very us. our our outcome in this focused they strategy by where the very our offerings we aligned in placed we that amid disruptions expectations, capturing stability And that are we ensure effectively were most core seniors strong

less growth, growth We in pleased very design, composition and markets the we growth. HMO are strong product looking geographic very growth. We PPO that that by and the were with the of for saw

in right last growth in results X%. right member expectations provided XXXX to AEP with our with we confident that around perspective, year. hand line So Advantage of guidance from now, are we X% our Medicare a it's Which,

year. around the are how throughout to rest continue manage growth very obviously the be vigilant going We to we of

are there that we some actions dual eligibility. that the of we will predominantly and maintain strategies that But within agents confident be you guide As come growth in and we said, result a the individuals as to have provided. in

Mark Kaye

management A.J., positioned factors disciplined achieve many on XXXX stability then Felicia And through between in your cost question, and mentioned, that are to margin we a of retention. well margin the a strong

Gail Boudreaux

A.J. Mark, Thanks,

Operator

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

Lance Wilkes

cetera. perhaps Great. like for MA and about a you're you you're far give little were by Could seeing talk terms XX? medical what that to what in outpatient, you In as like bit could any in be you in great. you terms your seeing categories And about if commentary commercial, talk can assumptions how thinking utilization? trends product of of particular, would of et on as cost That trend inpatient, and

Mark Kaye

our question we the much business. anticipated quarter very in stability, morning. thanks with lines of trend for would as fourth Cost Lance, the developed say, across largely I this

elevated mix the And following quarters changes They impact elevated. we've the we services. this health as remained quarter stable, in post-acute the our in prior out trends think some Medicaid, saw really We Again, they expectations stabilized the were membership ongoing bids primarily and of here, including at care inpatient of notable consistent of point. In has drivers because Specifically, cost were very fourth XXXX. trend particularly that the similarly prior called and services. with were it's way behavioral Medicare, redeterminations priced we've in and for manageable.

approach the to side, that commercial I the in date. would we've strong pricing line remains with say disciplined performance On adopted

expect elevated the particularly as so of XXXX, we Medicaid. And do to year, persist about these think half we the first in in really trends

side, the the expected stable similarly current Medicare at remain On levels. they're to

ensure a our say taking would approach again dynamics. for these long-term incorporates guidance deliver value. I we really 'XX so sustainable to outlook prudent And to We're

Gail Boudreaux

again, very question, I from Lance. shared is reiterate, you're And what seeing Mark, on in we've terms I'll just is. and what approach you, thanks a think prudent very to the Thank utilization us for of consistent where

Operator

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

Stephen Baxter

a that. on Just follow-up

is You 'XX. MLR year-over-year of in Medicaid that the mentioned that an expecting influencer you're higher

quarter constructive. what expectations, of embedding the sense like this were previous a And pretty rates your year than get just potentially you're change to something discussed I X/X explicitly stable love guidance. last has conversation MLR in Medicaid around full sounds better for more it you think I that. for been

Mark Kaye

question. with the more much in the very Medicaid thanks trend Maybe quarter detail. a Stephen, for bit me fourth start little let

cost fourth line during So quarter, October. the the with expectations Medicaid in in communicated trends,developed we

with elevated remain And generally trends completed. Specifically, given the our consistent the redeterminations membership in we levels materially just September. observed that reflects stabilization again, of base, again,

as the into why matter? Medicaid matters not have caught trends, prudent XXXX. first And and to on maintaining expect ago a forward really higher-than-typical cost As yet cost Well, these moment our rates elevated rebound current to how fully particularly that of up because going persist the to reflects margins we also we're mentioned we're adjustments XXXX, state in to inpatient both that but the so XXXX. trends, first in cost quickly health we half, of look working behavioral does and Medicaid half I it care, partners. with expect to this the simply are we And rate stance incremental in continue on a the level these trends

heightened And of part as followed of the in so the half as about tale cost the second being fully X you year begin stabilization rate to could by a think improvement the really more year, pressures. instruments early in of Medicaid reflect halves, the

Operator

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

Lisa Gill

to understand things. X want Just

talking you're about of you growth. when mid-teens about improvement the that about impact around CarelonRx how the redesign. the And understanding investments XXXX, is The First that for think talk would making D in MLR? you we specific you're Mark, just comments organic? that can secondly, to talk you much be Can margin Part the performance the then talked about about XXXX? into going

Gail Boudreaux

then to your Pete Carelon your we excited ask growth, the to and has. Is. which are please? Mark execution really part talk first the and question, have address about with pleased going of I'll strategies about, I'm Mark,

Mark Kaye

question morning. much very Lisa, thanks for this the

we're MLR the the to XX bps of higher increase primary There here. an than prior the are X.X%, factors are X So 'XX, guiding driving at midpoint. at for year that's approximately and that

First is the changes. in impact Medicare, of Part growth our the D strategic mix including

acquisitions. then trends. cost view is towards one medical is a third really Second And prudent

well growth mix at in changes So the increased point, range, basis run to has of, as changes D by CareBridge businesses MLR driven your specifically, inclusive stronger benefit which as the organic running relative business the our point the structure, Part XX-ish really direct and Medicare expected businesses; that's than higher subsidy. in to a in the our are the

In because the does stable reflect guidance MRR a us minutes heard but historical cost norms. ago, environment we're a about more couple elevated addition, talk operating in that than cost trends dynamic you of

Gail Boudreaux

thoughts Pete, share on your maybe Carelon.

Peter Haytaian

a Yes, appreciate talk the internal growth as really We and came excited for it. to very, what's off And we're growth with Carelon about I'll in saw terms We in broadly and growth. very balanced external Carelon, you what very had of question. quarter strong going strong the respect our another about versus of thanks on I think XX%, opportunities. growth.

way, relates That our into XXXX. revenue to to of nice one penetration growth then points arrangements will in the health, expand 'XX. And Xx across by internally of solutions. years lot in a risk of continue year, that momentum growth, best We have we've we external of And oncology, doing terms our the talked one about Blues. of seeing post-acute about across key last ever really terms continue we're historically, externally, versus [indiscernible] other the

our of very see growth. XX% part over significant You'll services growth business the with in

certainly internal to side both outside of importantly, we're above services our external adds the excited then growth, the CareBridge, As on Mark and But addition even mentioned, of is it. well XX%. CareBridge, that about organic

that. pleased very with So

in service also and good large the and Lisa. story say story Morgan really has feel on some how in actually accounts, focus and this think continue referenced high-touch things to Rx and you build. Momentum and closely very I one marketplace commercial the upmarket resonating And in that's about I'll I account enabled very our to really growth marketplace. does working with resonating cut of team. And We're is advocacy. national us is the Rx, our the win real that

then doubling market and experience we pharmacy. sweet that's we're a and we pleased really both We are It's the do spot, medical terms of strong really about patient well across playing sure importantly, down our continue on about talk from how [indiscernible] how experience they and making to market. mid-market in in out. have that what And

growth. I overall, So in small story a loan think very terms core of

Gail Boudreaux

Yes. externally inside One, Thanks, about things. just couple question, the a internally Lisa. momentum, punctuate excited to in deepening of Pete, Carelon. a thanks heard the maybe And both of from We're you couple things. for as capabilities and really And and of more happened we've about Carelon, that see and so that Both we're strategy can validation external advance I sharing the and areas risk, our around we additional talked in whole with numbers and plus 'XX, strategically. clients. that health X in can Pete, then what

Operator

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

Andrew Mok

still around Medicare I think your some confusion XXXX. Advantage growth there's members for

up and So hoping clear of accounts is, this that you year was what your actual to outlook. the growth much AEP for of I full us some tell how could

Gail Boudreaux

have share that. her on I'll Felicia thoughts

Felicia Norwood

much So you Andrew, question. thank for that very

very was with. we're came a a pleased commercial group is lot account AEP frankly, that, particular with. we membership relationship Our group had growth certainly and that That long-standing account in, that reflects a of strong, a that growth

the growth, with a of dynamics with in the demographics and Medicare group. And very in -- we So line expectations terms associated it's our with familiar, right lot Medicare then Advantage provided. that that of individual

throughout the overall total, the business. around Advantage left Medicare our in to we to expect So in year. year is growth, we X% we'll to continue range rest growth place And X% the that manage in which have of this the we are appropriately actions with, right which you

Gail Boudreaux

year, minimal confusion. we don't you, growth. which like That be strong I Thank essentially X%, -- retention. of Andrew, the with growth the Felicia expect to want X% don't just to for and Yes. because We've clear rest any significant

positioning. that's how similarly we're example, Aligned some for you 'XX that, what in So we've of to the given projecting our confidence just just give market in that. seen, to sense

Operator

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

Ryan Langston

there's from ago, environment. I a maybe on true? And acquisition deal. a know to guess of more broadly I but that Louisiana the stepped Cross just Blue is I still then believe you back revisit little potential while the that

us You your 'XX forward closed beyond remind closed targets? Paragon, going Kroger priority just of into potential and closed Specialty, you on CareBridge. Maybe acquisition

Gail Boudreaux

Yes. We Thanks partnership them and don't closely that. We or for Cross the of with a question. the work really acquisitions Louisiana. on in mean I duals have posture good some Carelon. our with Blue of Medicare comment we a number Shield actually products on Blue in Medicaid and in

our of us many which continue with really some capabilities. we to because talk partners, provide heard So you've unique Blue about, we have services

CareBridge Let your me question. to on Pete ask comment

Peter Haytaian

a Yes. No, thanks lot.

I again, really our with empathy, think in I face plan and of we've off partners interest in solutions whole really terms question we're our and and try those talked strategy about in so strategy deliver where like care affordability of areas in. about terms on that solve what we doing of always interested differentiated talk at and of the health, to and health And Carelon's identify reside. risk. we're your health to to with overall focused complexity

transactions, path. down the seen services through play on in And that on be we'll it and side, pharmacy continue the really that our or you've side,

interest how of that the eos trend you are different So is, specialty impacts there many think lines of where about business. when

ways health enhance be pharmacy whole think We on We'll that. the opportunistic experience. additional sort the side. are We continue of to to there evaluate

health you're around of enabling and think we tremendous enhancing a and the what opportunity in the and said care as experience, before, whole data data with fragmentation seeing experience. And see today, experience, we and better overall health importantly, technology much a patient the Gail

as areas are those So in forward. we move interested very we're that

Operator

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

Justin Lake

the business. on question A health care benefits

up expected First, can it's XXXX talk then year. including should how year-over-year. the the full hoping for versus And you guidance, margin QX on down like seasonality Health look to looks XXXX, your Benefits

talk what's maybe the flat, You've it And coming of being talked can commercial flat. you Is driving in on about to and commercial? Medicaid the being that that side. magnitude Medicare

Mark Kaye

question. very thanks for your Justin, much

level the margins, Let me I'll benefit bit go the ahead seasonality, operating about with and little then a start that. talk and after

seasonality, more remarks our full morning, prepared the we expect this heard XX% you of slightly than during half For a of earnings than the that the anticipate weighted And within up period. first little towards in EPS then year more those to adjusted first as earnings more year, of then be show do quarter. the to first occurring in bit half, we half

X One seasonal And mix. then and that sort reflects typical is dynamics, two our things. business evolving of is

be As you expect can larger a in of to going the think contributing here to retention I first and continued dynamics, about typically in think year, disciplined seasonal business earnings with the commercial if strong then about half we continue same share the the and pattern that's pricing, XXXX.

half course, quarter. inflation fit. D Part Medicare in first state reflected changes margins first reduction On year benefit at Medicaid, from of then, we've leap partners the the rate are That's the second And more our back-end the story. of as updates half, loaded, especially and to also

me comments So point I a lot to going on with seasonality, let made. those but early

points we year-over-year. of I line with a decline would On basis there are of couple but XX XX for outside And margin the expectations, a expect expectations, core impacts call discrete performance, to our operating in that's do out what operating you.

is be in nonrecurring cycling that we're expense had first XXXX. that via going we benefits The to

D little bit Part business change. through get mix inclusive a of growth the we're in design the of lines stronger Medicare our commercial, to going compared of Medicare relative to impacts Second, slightly

excluding sort would point make would the And businesses health those benefits across margins the then have the impacts discrete I of been stable.

Operator

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

Joshua Raskin

us to And on I I then can just know it to are you side, priced what for? looked speak with was you improvement that's you've Could the XXXX ended, side expectations the like And still growth some CMS of midpoint for the of trend those within rest I the on you lot above heard your guidance, slowing full your maybe that why the you've actions the growth was growth? the already MA thought taken data expecting the a year cover actions, expectation. understand, and sure if commercial? above previous and distribution Just make year. just help in you I a and margin commercial I the not -- taken want of but of just guidance. slightly what's

Mark Kaye

question. and do much stay ahead, streams very hard for view importantly, underwriting and our very we've anticipate 'XX a disciplined discipline expected historical we ensure It's really that market. priced is taken cost has market, very commercial most here. strategy. accounted those for. our On trends of a between a above about your averages. competitiveness in of something and pricing thanks to very feel looking good pricing approach this trends, We Morgan balance Josh, commercial forward-looking we've But our for are those rational to that

on is the is robust. side, retention remain strong, commercial margins pricing So strong, certainly,

Gail Boudreaux

is settle of you Thanks, is, this we few as of about over which Josh. second part take your out I'll of think AEP, expect to view. the the next question, kind our data Part months. the

growth We the well. growth. But significant sort view year our in cadence note, other our AEP still I looking normal of and secondarily, a in of So retention, of the sales, we why you'll trajectory products a XXXX that and at like. And a rest of strong think that's feel confident looked cadence, as we placement we just you of new each of actually what then And and have as example. pace, expect just better duals but that our businesses. don't very than saw expect the of for

Operator

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

David Windley

The X-parter. revenue on in Question commercial flat. guidance for of pricing, or ASO kind revenue fee a

we margin, in there stable saying of the membership, move early I think no And as into you is Your you're XXXX. of I stable expecting hear part MLR, up, there? Medicaid, kind pricing

Jan the think I XX% repriced in book X. of

the from And actually an or benefit about curious into so price margins. move pattern I'm Medicaid just to your thereof lack you that in improving

So pricing Medicaid on ASO. and

Gail Boudreaux

of ask first, in We'll there's join question. other then here Maybe a answers. try I'll colleagues Mark? the in lot -- to of that rest address on some embedded to the and Mark the

Mark Kaye

thanks for the much question. Dave, very

portion to we're as one on fee Carelon fee-based really convert targeting The Meaning, service wins Services, from flat our of arrangements the expansions expecting a to and is revenues primarily guide year-over-year. business main the simple contract of on we're a first drivers fee-based is shift one within arrangements. risk-based those relatively of This new because risk-based contracts. approximately to

service so rather line. we'll fee necessarily premium through And than record that the

Gail Boudreaux

parts Felicia Next other answer the to question. of will your be

Felicia Norwood

we Yes. sound the to rates. the be sure Certainly, year me ring January, cycle, for tied Dave, but for make about that getting we at states focused actuarially saying you our question. by membership. our have we are rest partners have very start let thank on our working with of continue look tirelessly the that XX% of the a our rest When to we we then rating take members of to

expect and and our premium And narrow that the rates the point, the in this half state XX% line side. January critical our Medicaid what gap, and Medicare. good in will as heard we continue And strong about At mention earlier, of year expected, then very into just came in of but with in, work improvement we on visibility July well insufficient to Mark you constructive back as have with the we conversations partners. to see be close as

Operator

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

Joanna Gajuk

I -- X.X%, XXXX. the by your talk that your about the you seem that margin X% get I So when no and slides noticed slide long-term longer to be you at looking to targets, CAGR was to targeting

really that margins get happen to for that And when the way target? So what I And also, it? the achieved? case, if to is be the guess, to to to would should we that that's read expect need

Mark Kaye

and sharp very Joanna, great question a eye.

our annual start goal that significant specifically, our operating we for acceleration ranges business. or target deliberate exceeding at very we've has that faster shared to power of EPS has XXXX either and, and growth projected embedded positive our XX% growth in businesses Carelon taken revenue committed and changed. has other me words, targets led evolved our that we're across deepen Investor adjusted deliver say, an or versus enhance least actions growth not introduced emphasizing by the of changed when remain We've expectations. at average our has is Day. those delivered long-term financial original margin, is is expectations this businesses. What the we to Let to And our changed that in set about our to than risk-taking I'd those And targets we our conviction In Carelon we've nothing growth. capabilities earnings very XXXX what we pleased maybe the the

that's it's example, to the of positive capabilities, XXXX deals in XXs. significantly So that's reach, today's our new it original Carelon, the In teens numbers. since growth putting of it margin for margin those very for anticipate the a Services to shifts above for low to newer Just for XXXX. grow right? given target CAGR And revenue guidance, high time normal Carelon we dynamics range going levels. at XX% but to take near-term And also mature over earnings

in our and business earnings other power have strong, remains timing changed. So mix but words, the

the year. here earnings couple Investor look, So I'd confident in is of provide at But the really later this a details probably end embedded change. the our We'll with, remain of we this businesses. more call representative Day

Operator

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

Erin Wilson Wright

follow-up thoughts. I of the of regulatory a Medicare A wanted that Medicaid, about broader here in MA, to the terms where in seems of hear wanted final and can a And I bigger how answer. political it thinking and on advanced from to rate the just picture to across light be more But go in your period questions on initial lot of and are your guess, I notice of your but business no supportive where rate maybe guess environment catch-up there's hear there's mainly the implications, thoughts in notice. you incorporating and Advantage. rest

Gail Boudreaux

try sort not it's Erin. to some about Again, of on preliminary, that it's we talk a that. we'll Obviously, have think final. We'll heading. question, address I'll of Maybe more and fulsome positive. we're Felicia share very details how directionally, kind

So Felicia?

Felicia Norwood

that helps have provide it older million it Sure, and have Erin. to keep care that in depend on. to in disability, to adults with this the people country, us There deliver XX we be proactively value chosen and choose much benefits seniors continue was to high-quality really that Medicare value the MA. Thank mind Advantage question. that all and able Rate provides stability delivers. you that benefits very for for

consecutive advanced MA the see MA to cuts of we earlier program, rate this notice years pleased out advanced came notice, X are to after the the very direction that month. Regarding of

while of past that progress, the think, light towards program, more over I rate cost reflects still Now believe the insufficient the base trends it's seen that adequate year. funding the we've we in in

proposed we changes forward in administration of to improve new on the the in the which look long very the D program of model notice, collaboratively particularly reforms our terms with we will Part believe to advanced working risk other recommendations respect So term. policies with some the and in

months in next we certainly sure with and the advances have look the forward this to few to working weeks notice final to rely that a that come So the make country over on. administration program seniors

Gail Boudreaux

just Erin, and Medicaid And on comments briefly around the of your there. environment sort

long working about a benefits administrations of the this states. and as worked critical I couple in deep that history we've particularly have with years expertise, across and Just I a multiple think mean things. to space, members the you think our in expertise providing deep the we

we with innovative government value. provide lot and to I where these can What think looking work members to better partnership the think I'd really and private say we can even bring that a states forward programs our we're really benefit

A in many, across discussion. partnership But we're long So and I working the years. a think this history different There of it's for approaching again, are of many this lot we're -- early. no also firm private public proposals.

Operator

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

Unknown Analyst

XXXX, just product more This little outpatient? what's for to commercial Gaby saw bit quarter on guidance by and assumed Gaby in on just the 'XX? a for maybe for cost trends this line line inpatient, more reiterate is trends commercial evolve then cost in fourth how the -- in the Sarah. Could the you you And speak is for overall

Mark Kaye

be Gaby, I'm a welcome. apologize going might advance, bit And of answer. in this short to a little

So say year, from quarter stable, I'd throughout couple see performance cost simply remained the We to note and in part, strong the priced the But were trend for a of for. in for elevated most for continued line importantly, of little driver-related we XX. most they fourth same the categories, what were come I'd of the that commercial they inpatient key And ER. XX a example, exactly outpatient some developed medical, with bit expect.

penetration feel We'll mix Our expand of initiatives of pricing ongoing. and good about we're to but margin look the how some very via positioned. we products, to continue are specialty

Gail Boudreaux

we we mean, in It's that seen and feel really you, have good business. our hardened Thank commercial Mark. across results very And reiterating, a priced. market strong commercial just I

question. that So for thank you

Operator

George we'll Bank. line Next, Hill of the go Deutsche from to

George Hill

Mark, that exchange political business. enhanced show would happens color government number members people what verification of January income up an the expectation helpful. do experienced on you in guys percent the like What given be subsidies back a kind on guess, to have the paid actually -- premiums of Any And turn last there? then year what change and two, one the here parts for actually of expecting when the kind cycle? to is the have X your part upcoming exchange The a relative the premiums have pay part as guys of I nuanced is you one.

Gail Boudreaux

then Morgan first me your Let second. your question address have Mark and

Morgan? So

Morgan Kendrick

the question for there. thanks George, So

trends markets fact the markets. ACA the It's additional particularly into First non-Blue into slowly. to that quite good actually commercial be taken the with turned of They've are. priced as a has out we've approach pleased and with where expanded in geographies really several X pleased various that This the one. growing we're all, year, as to seen been we've they for. one we're methodical business years, That performance. past we've getting very a over you've And noticed prudent

an overall So we at space. as really white look this

it ACA. for as a us. taking We care, risk, continue It's for between complementary us create that there's long-term That indeed said, occurs. is Certainly, actual reduction and this growth some elimination, business. a or believe the promising sorts, really space if the a in business really, solid opportunity that that the a which have certainly certainly like created the absolutely white harmonious would to for of we to subsidies market at we shrink market connection kind caid in and

it or Mark benefits benefits. of health and balance And the government commercial I'll both to together question. brings it So your to pass

Mark Kaye

we've rates being the assumptions. very the thanks. assumptions. this say released time, in there's And in I'd for really no a guidance with observed those morning, George, been years. we change little [indiscernible] that effectuation part in bit has At conservative consistent prior incorporates the what membership this the our

Gail Boudreaux

considering be extension partial. when an And -- in it of a flexibility one one nothing lot the of things final to a no doesn't still extension -- Adjustments where has There's of full I all consider the include discussions. decision. thing that or think or that terms can a to Congress just so of Obviously, an there's And there's about policy. lot have Federal of Government. subsidy,

this So we're that impact these just go subsidies through has members them. process, it obviously as we to and for value have sharing the the our

Operator

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

Scott Fidel

get just wanted to question. a clarification a then I and

enrollment Health breakdown on group are if the the commercial those still by and Mark's could the appreciate guidance clarification give 'XX. 'XX would operating you between I dynamics the for whether if for Just can Mark, commercial us Carelon margin was targets you And comments was growth taxed evolved? and be exchanges. also on or the hoping just maybe, just curious margin I elaborate risk in guys then have also Benefits

Mark Kaye

you margin. for just on Thank very Benefits much the Scott, question. the Health

the of some my reiterate importance to commentary. just So from prior

changed. vision long-term [indiscernible]. and earnings confident for And businesses we our continue these do and Health to embedded the margin the power haven't in they that's Benefits in drive remain health business objectives So growth

the made this growth that positive about businesses. in In and to a the change part I the really faster than spoke ago, terms projected, across Carelon of feedback that reflect based we was we've delivered this quarter minute investor on

year's which where we also with more investments our those about at that, opportunities more the stand and to long-term target about prudent Benefits support together hear you'll the this provide investor to stay pace mix with concurrent business that that, come want We'll evolving time. conference about growth So details and we at at margins. Health

Gail Boudreaux

as really Thanks, I embedded believe really that strong executed has message and we earnings key is Carelon our power, that again, Yes. there's well. Mark. guess And

to So share we are that's that trying today. message really the

Operator

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

Hua Ha

revisit A.J.'s in ask question to it wanted a different and bit I way.

line healthy say, case expectations, growth healthy worst only through averting your for Elevance high-growth achieved had. still this growth investors okay, level the investors said, regarding MA scenarios So back and who may that in on guide, 'XX growth aggressive that confident. with company push suppression trying plan With this level Curious business. confidence the conviction know MA your context, I'm the response you're very margins of and given the mispriced of tactics,and sense still that to But get to still I this better hear that. to the year. a

Gail Boudreaux

to sort business. strong in around I geography mean, for you duals very guess question. specific certain level to our growth link set and continue the types marketplace, of obviously, our of our we were kind just Thank of view. I product, well growth by target as as

individual question, would our good growth. quite Medicare book, in So reframe sustainable to positioned retention. I us well is answer, had Advantage think, the that And your I really long-term has we I guess

guide way. and we right into plays where going, vision our trend, strategy. We're prudent that actually around of we is sure Mark the this of as shared Medicare business in all make around being So our feel that want to sort long-term

that pleased our inherent and really with we brand saw, for strong in this have And we've I again, that experience and worked is over those And positive part think some with. the client an in a strength from is convert delivered group service significant MA significant delivery, also, other we The growth because of I year, customer that the growth which and with large customer. have we're we And strategy that that the saw a our that's and many, we this to have group of that stronger we is think, And is growth. of years. did many members with.

for geography our the positioning said my product is where on of growth, we guide we match it guess right about So I capabilities are. we good going and ending we is and where were quite were to mix to growth, feel

Operator

Partners. we'll Mayo line And for the Leerink Whit to from our last of question, go

Benjamin Mayo

year what or growth margins to Puerto not driving and versus of you in about are any views thinking this stabilization your contribution margins. the how that's the to did wanted perform your last I just get And a business, quick performance MA whether Rico targets? that year overall on update on

Gail Boudreaux

I'll you. address Thank ask to that. Felicia

Felicia Norwood

much question. so you Thank the for

to into that we and to same 'XX, demonstrated into we And Puerto membership. decisions headed to As made you place success in our say that get as respect 'XX and of I sure stabilizing in It AEP be well environment. our continue ability to solid. We worked we reductions to were will that a that some strategy business, balancing with know, our very every needed was Rico to we strategic we the supplemental of XXXX. make able time that as we headed very margin benefits significant making

feel about are in sure we strategically we Rico that well So make of and Rico, look residents to forward continuing Puerto how we the positioned program. to to in deliver very value MA Puerto the

much So thank you very for question. that

Gail Boudreaux

over in affordable our meaningful and XXXX health system And care We that be accessible thank interest And us will impact continued members. to want Elevance for to ensure in time. our confident simple, efforts our I everyone Whit. growth today for you, line to actions make that and algorithms to entered resolute business your and we're question. will our the in and 'XX Thank Health. the return for joining on last long-term our position the support

a your for of great again your much interest in so rest you and have Thank Health, Elevance week.

Operator

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

the You Verizon may any conference and and for participants Thank replay by time dial (XXX) can at system for today. for XXX-XXXX, XXX-XXXX. using (XXX) international you our This dialing participation access concludes Conferencing. your

You disconnect. may now

Elevance Health (ELV) 23 Jan 252024 Q4 Earnings call transcript