1、REFINITIV STREETEVENTSEDITED TRANSCRIPTELV.N-Q1 2025 Elevance Health Inc Earnings CallEVENT DATE/TIME:APRIL 22,2025/12:30PM GMTOVERVIEW:Company SummaryREFINITIV STREETEVENTS|Contact Us2025 Refinitiv.All rights reserved.Republication or redistribution of Refinitiv content,including by framing or simi

2、lar means,is prohibited without the prior writtenconsent of Refinitiv.Refinitiv and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies.CORPORATE PARTICIPANTSNathan Rich Elevance Health Inc-Vice President,Investor RelationsGail Boudreaux Elevance Health Inc-Preside

3、nt,Chief Executive Officer,DirectorMark Kaye Elevance Health Inc-Chief Financial Officer,Executive Vice PresidentPeter Haytaian Elevance Health Inc-Executive Vice President and President,Carelon and CarelonRxFelicia Norwood Elevance Health Inc-Executive Vice President,President-Government Business D

4、ivisionCONFERENCE CALL PARTICIPANTSAJ Rice UBS Equities-AnalystLance Wilkes Bernstein&Co.LLC-AnalystStephen Baxter Wells Fargo Securities,LLC-AnalystAndrew Mok Barclays-AnalystLisa Gill JPMorgan-AnalystAnn Hynes Mizuho Securities USA-AnalystRyan Langston TD Securities-AnalystErin Wright Morgan Stanl

5、ey&Co-AnalystBen Hendrix RBC Capital Markets-AnalystJoshua Raskin Nephron Research-AnalystSarah James Cantor Fitzgerald-AnalystJustin Lake Wolfe Research-AnalystJoanna Gajuk BofA Securities,Inc-AnalystGeorge Hill Deutsche Bank-AnalystWhit Mayo Leerink Partners-AnalystMichael Ha Robert W.Baird&Co.,In

6、c.-AnalystPRESENTATIONOperatorLadies and gentlemen,thank you for standing by and welcome to the Elevance Health first-quarter earnings conference call.(Operator Instructions)As a reminder,todays conference is being recorded.I would now like to turn the conference over to the companys management.Plea

7、se go ahead.2REFINITIV STREETEVENTS|Contact Us2025 Refinitiv.All rights reserved.Republication or redistribution of Refinitiv content,including by framing or similar means,is prohibited without the prior writtenconsent of Refinitiv.Refinitiv and the Refinitiv logo are registered trademarks of Refini

8、tiv and its affiliated companies.APRIL 22,2025/12:30PM,ELV.N-Q1 2025 Elevance Health Inc Earnings CallNathan Rich-Elevance Health Inc-Vice President,Investor RelationsGood morning and welcome to Elevance Healths first-quarter 2025 earnings call.My name is Nathan Rich,Vice President of Investor Relat

9、ions.With us this morning on the earnings call are Gail Boudreaux,President and CEO;Mark Kaye,our CFO;Pete Haytaian,President of Carelon;Morgan Kendrick,President of our Commercial Health Benefits business;and FeliciaNorwood,President of our Government Health Benefits business.Gail will begin the ca

10、ll with a review of the progress weve made against our strategic initiatives and a discussion of our first quarter performance.Mark will then discuss our financial results and outlook in greater detail.After our prepared remarks,the team will be available for Q&A.During the call,we will reference ce

11、rtain non-GAAP measures.Reconciliations of these non-GAAP measures to the most directly comparable GAAPmeasures are available on our website,.We will also be making forward-looking statements on this call.Listeners are cautionedthat these statements are subject to certain risks and uncertainties,man

12、y of which are difficult to predict and generally beyond the control ofElevance Health.These risks and uncertainties can cause actual results to differ materially from our current expectations.We advise listeners tocarefully review the risk factors discussed in todays press release and in our quarte

13、rly filings with the SEC.I will now turn the call over to Gail.Gail Boudreaux-Elevance Health Inc-President,Chief Executive Officer,DirectorGood morning and thank you for joining todays call.At Elevance Health,we began 2025 with focus,momentum,and a deep commitment toadvancing our purpose to improve

14、 the health of humanity.Across our enterprise,this purpose is not an abstract mission.Its what drives how we serve our members,support care providers,and partner with communities.In the first quarter,weve seen that commitmentcome to life in powerful ways.Let me begin by highlighting just a few examp

15、les of the difference were making.We believe the healthcare experience should be simpler,more affordable,and more human.Thats why weve made sustained investments tofundamentally transform how people experience their care.In Q1,our patient advocacy solutions supported over 6 million members,deliverin

16、gpersonalized guidance to navigate benefits,manage chronic conditions,and access behavioral health services.With a 95%satisfaction rate,its become a valuable differentiator,especially among employers seeking holistic,proactive care for their employees.We also continue to scale HealthOS,our digital p

17、latform that integrates clinical data and insights into provider workflows.It now supports more than 88,000 care providers and over 1,200 provider organizations,enabling real-time decision making and seamless priorauthorizations when documentation is accurate and complete.And for high performing pro

18、viders,weve gone a step further,eliminating priorauthorization requirements on more than 400 outpatient procedures to reduce administrative friction and speed up access to care.These efforts are helping us reduce complexity,rebuild trust,and create a more connected care experience for both members a

19、nd care providers.Across every line of business,were addressing the full spectrum of physical,behavioral,and social health to drive better outcomes and lower totalcost of care.Were expanding our value-based oncology care model to Medicare Advantage this year following success in commercial last year

20、 which reducedinpatient admissions and higher adherence to treatment protocols.These are the kind of outcomes that matter most to members and care teamsalike.3REFINITIV STREETEVENTS|Contact Us2025 Refinitiv.All rights reserved.Republication or redistribution of Refinitiv content,including by framing

21、 or similar means,is prohibited without the prior writtenconsent of Refinitiv.Refinitiv and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies.APRIL 22,2025/12:30PM,ELV.N-Q1 2025 Elevance Health Inc Earnings CallThrough Carelon Services,we continue to expand our e

22、xternal reach.In Q1,we launched new post acute and behavioral health contracts withhealth plan clients,validating our ability to deliver risk-based outcomes for complex populations and reinforcing Carelons role as a scalable platformfor whole person care.We also completed the acquisition of CareBrid

23、ge at the end of last year,further strengthening our capabilities in home and community-basedservices.By integrating these offerings into our Medicaid&Duals platforms,were delivering high touch in-home support to individuals withcomplex needs,helping to avoid ER visits and institutional stays.And as

24、 we scale our risk-based care model,were leveraging Carelons advanced data-driven capabilities to deepen collaboration with providersand close gaps in care.These value-based arrangements are not only improving quality,but have also driven nearly$100 in per member per monthsavings across medical and

25、pharmacy,highlighting the impact of our whole health approach.Now turning to our first quarter results.We delivered performance in line with our expectations,reflecting consistent execution and disciplinedoperations despite an elevated trend environment.Across our businesses,were staying focused on

26、what we can control,delivering operationalresults,engaging proactively with partners,and advancing our long-term strategy.In Medicaid,we continue to make progress on rate alignment with April adjustments coming in as expected and early discussions for the Julycohort underway.These conversations refl

27、ect a shared understanding of the need to align reimbursement with the current level of acuity of ourmembership.At the same time,were partnering with states to rethink care delivery.Our long-term care model continues to deliver better outcomes at lowercost by integrating home-based services,behavior

28、al health and care coordination.Our recent acquisition of Centers Plan for Healthy Living in New York will expand our whole health approach to deliver improved care for membersand greater value for the state.In Medicare Advantage,performance was consistent with expectations,retention remains strong,

29、and growth wastargeted and disciplined,supporting both margin and membership sustainability.We remain confident in the long-term outlook for MA.Stronger retention not only improves member satisfaction,its associated with better carecoordination,fewer inpatient stays,and lower overall Medicare spendi

30、ng.In commercial,were seeing strong engagement with our integrated offerings.Employers increasingly value our differentiated approach,whichbrings together advocacy,behavioral health,pharmacy,and specialty care into a seamless experience.Were encouraged by the momentum we have heading into the 2026 s

31、elling season.And while individual ACA effectuation rates have been lower,we still expect solid growth in 2025.Our expansion into three new states supports our broader strategy to build lifetime value through coordinatedACA and Medicaid coverage.Carelon continues to be a strategic growth engine for

32、Elevance Health.In the first quarter,we significantly expanded our relationships with externalpayers,including Many Blues plans for solutions in post-acute,behavioral health,specialty care,and palliative,further validating Carelons abilityto deliver outcomes beyond our own membership.These relations

33、hips underscore the strength of Carelons operating model and its alignment with what clients are asking for-solutions that driveoutcomes,reduce cost,and simplify care.Were executing with consistency,advancing our strategy with discipline,and delivering measurablevalue across the enterprise.What sets

34、 Elevance Health apart is not just how we perform,but why we perform.Through a purpose-driven model that focuses on whole personhealth,supports our partners,and delivers outcomes that matter.4REFINITIV STREETEVENTS|Contact Us2025 Refinitiv.All rights reserved.Republication or redistribution of Refin

35、itiv content,including by framing or similar means,is prohibited without the prior writtenconsent of Refinitiv.Refinitiv and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies.APRIL 22,2025/12:30PM,ELV.N-Q1 2025 Elevance Health Inc Earnings CallBefore I turn it ov

36、er to Mark,I want to thank our more than 100,000 associates.Their commitment and passion continues to define our culture,power our performance,and strengthen our impact.This quarter,Elevance Health was named once again to Fortunes 100 Best Companies to WorkFor,recognized as one of Americas most inno

37、vative companies,and included in the JUST 100 by JUST Capital,reflecting both the values we upholdand the difference we strive to make every day.With that,Ill turn it over to our CFO,Mark Kaye to take you through the financial results and outlook.Mark?Mark Kaye-Elevance Health Inc-Chief Financial Of

38、ficer,Executive Vice PresidentThank you and good morning,everyone.As you just heard from Gail,were encouraged by our strong start to 2025,delivering results that are aligned with the expectations we laid out atthe beginning of the year.In the first quarter,and as we reported on our Form 8-K filing l

39、ast week,GAAP diluted earnings per share was$9.61 andadjusted diluted earnings per share was$11.97,reflecting year over year growth of more than 10%,underscoring the resilience of our diversifiedbusiness and disciplined execution across our strategic initiatives.We ended the first quarter with 45.8

40、million medical members,up 99,000 from year end,driven primarily by targeted expansion and better thanexpected retention rates in Medicare Advantage.While our individual ACA membership grew approximately 11%sequentially,we anticipate amoderation in membership during the second quarter as effectuatio

41、n rates on renewing members are tracking below our initial expectations.Operating revenue in the quarter was$48.8 billion,an increase of over 15%,principally driven by higher premium yields in our health benefitssegment,growth in our Medicare Advantage and individual ACA membership,and CarelonRx pro

42、duct revenue.In addition,our revenue result reflects contributions from recent acquisitions,particularly in pharmacy services and home health,two areas criticalto advancing our whole health strategy.These investments strengthen our ability to deliver more connected care,and we are actively integrati

43、ngthese assets across our health benefits and Carelon platforms to improve outcomes for members and accelerate our enterprise flywheel.Our consolidated benefit expense ratio was 86.4%,an increase of 80 basis points year over year.The increase was due to higher cost trends in ourMedicaid business,par

44、tially offset by out of period Medicaid premium taxes that had no material impact on operating gain.The ratio also benefited from favorable seasonality in Medicare Part D,specifically related to the Inflation Reduction Act changes.Overall,utilizationpatterns in our health benefit segment remain elev

45、ated,but consistent with the assumptions embedded in our full year guidance.In our Medicare Advantage business,the first quarter developed in line with expectations that high costs trends would persist in 2025,and wehave maintained a prudent posture in our outlook appropriate for this early stage of

46、 the year.The adjusted operating expense ratio stood at 10.7%,an improvement of 60 basis points,reflecting our commitment to disciplined expensemanagement and thoughtful prioritization of strategic investments.Health benefits operating gain of$2.2 billion declined slightly on higherMedicaid costs,pa

47、rtly offset by operating efficiencies.Carelons operating gain of$1.1 billion grew 34%driven by growth in pharmacy volumes and the improved performance of deployed risk-basedcapabilities.Net investment income exceeded our expectations for the first quarter.The factors driving this outperformance were

48、 incorporated in our full year guidance,though the timing was earlier than anticipated.As such,wecontinue to expect our 2025 net investment income to align closely with our initial guidance.5REFINITIV STREETEVENTS|Contact Us2025 Refinitiv.All rights reserved.Republication or redistribution of Refini

49、tiv content,including by framing or similar means,is prohibited without the prior writtenconsent of Refinitiv.Refinitiv and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies.APRIL 22,2025/12:30PM,ELV.N-Q1 2025 Elevance Health Inc Earnings CallTurning to our balan

50、ce sheet.We ended the quarter with a debt to capital ratio of approximately 41%,preserving flexibility for strategic investmentsand future capital deployment.Days in claims payable were 44 days as of March 31 when adjusted for the acquisition of CareBridge.The increasing DCP of 0.5 days sequentially

51、 reflects our consistent and prudent approach to reserving.We continue to expect DCP to trend towardsthe low 40s over time.Operating cash flow totaled$1 billion and reflected timing-related items that negatively impacted working capital in thequarter.Importantly,we expect these timing items to rever

52、se as the year progresses with our outlook for operating cash flow of approximately$8 billionremaining unchanged.We continue to approach the pacing of share repurchases opportunistically.In the quarter,we repurchased 2.2 million shares of common stock for approximately$880 million,demonstrating our

53、confidence in the intrinsicvalue of our shares.Overall,we are pleased with our start to the year and are reiterating our guidance for adjusted diluted earnings per share tobe in the range of$34.15 to$34.85.Regarding earnings seasonality,we continue to expect more than 60%of adjusted earnings per sha

54、re to be realized in the first half of the year.And with that,operator,please open the call for questions.QUESTIONS AND ANSWERSOperator(Operator Instructions)AJ Rice,UBS.AJ Rice-UBS Equities-AnalystMaybe just try to flush out some of the issues that have been raised regarding Medicare Advantage.I kn

55、ow its not as large a business for you as itis for some others,but certainly,theres been some discussion about Group MA.Are you seeing anything unusual there?Theres concern about the IRA impact.How is that shaping up so far relative to the changes and how youveincorporated them in their outlook?And

56、then I know you said youve got an elevated trend that seems to be in the individual market tracking yourexpectations.Is-do you feel like you got a good read on it or do we really need to get to the second quarter before we have full visibility on howthats all trending?Mark Kaye-Elevance Health Inc-C

57、hief Financial Officer,Executive Vice PresidentThanks for the very comprehensive first question there.Anticipating were likely to get a couple of questions on trend during the time togetherthis morning,let me start from a Broad perspective.Medicare costs overall remain elevated but manageable to sta

58、rt the year,very consistent withour fourth quarter experience and very much in line with our expectations for the first quarter.Effectively,nothing has materially changed with respect to our prior commentary.In the first quarter,we did see flu and respiratory illnesses causeslightly higher utilizati

59、ons.Those costs moderated as the quarter came to a close,very much as youd expect for seasonal conditions.6REFINITIV STREETEVENTS|Contact Us2025 Refinitiv.All rights reserved.Republication or redistribution of Refinitiv content,including by framing or similar means,is prohibited without the prior wr

60、ittenconsent of Refinitiv.Refinitiv and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies.APRIL 22,2025/12:30PM,ELV.N-Q1 2025 Elevance Health Inc Earnings CallWe are also very closely tracking weekly claims data,prior authorizations,and provider level interaction

61、s to identify emerging patterns quickly.And thats going to enable us to detect shifts and respond accordingly.But based on the most recent data review that weve conducted by ourteams,we remain comfortable with the trend environment and the cost trajectory weve seen here to date.Gail Boudreaux-Elevan

62、ce Health Inc-President,Chief Executive Officer,DirectorAnd sort of just reiterating what Mark said,I think we feel very much aligned with our expectations to start the year.So again,I appreciate thequestion and next question,please.OperatorLance Wilkes,Bernstein.Lance Wilkes-Bernstein&Co.LLC-Analys

63、tCould you talk a little bit about the Carelon Services really strong growth?And in particular,could you talk to cross sales into the Anthem book ofbusiness and how thats progressing?And then maybe if you could quantify or give us more details on sales into the Blues and other plans there.And I gues

64、s as part of that if you want to talk a little bit about specialty pharmacy ramping into CarelonRx as well and how far along you are in thatprocess,that would be great.Gail Boudreaux-Elevance Health Inc-President,Chief Executive Officer,DirectorA number of questions there.Well try.Ill ask Pete Hayta

65、ian to address those,but appreciate the recognition of the very strong results that weveseen in both internal and external growth with Carelon Services and CarelonRx.So Pete?Peter Haytaian-Elevance Health Inc-Executive Vice President and President,Carelon and CarelonRxGreat question.Like Gail said,w

66、ere really pleased with the momentum were seeing on the services side in Carelon.I think you saw it in the quarter,we had over 60%growth.We continue to track to the 50%-at least 50%for the year.And to your point,were seeing really nice balanced growth internally and externally.To speak first interna

67、lly,you asked about that.Were seeingreally nice expansion.You heard it in the prepared remarks around products like total cost of care for oncology which weve been expanding lastyear into our commercial business now,into Medicare this year.So were seeing that proliferate across the portfolio as well

68、 as in Medicaid in areas like behavioral health where we continue to expand our seriouslymentally ill offering as well as other offerings.And then externally,we came off a really strong year in 24 as you know and heard around CarelonServices growth.As it relates to this year,we feel very confident i

69、n the growth that were seeing this year in 2025 across Carelon Services.And again,were seeingdiversity in what were selling across all our offerings,across PAS,across our specialty care services business,across behavioral health.And then of course,with the addition of CareBridge,which were really ex

70、cited about.So we will see in 2025 the most significant external growthacross the Carelon Services portfolio.As it relates to CarelonRx,again,Im very confident and happy about performance as it relates to our strategythere,continuing to follow through as it relates to SpecialtyRx and our migration i

71、n that business.7REFINITIV STREETEVENTS|Contact Us2025 Refinitiv.All rights reserved.Republication or redistribution of Refinitiv content,including by framing or similar means,is prohibited without the prior writtenconsent of Refinitiv.Refinitiv and the Refinitiv logo are registered trademarks of Re

72、finitiv and its affiliated companies.APRIL 22,2025/12:30PM,ELV.N-Q1 2025 Elevance Health Inc Earnings CallAnd as you know,we started with acquiring BioPlus and then Kroger Specialty Pharmacy.And so were being very thoughtful about how we managethat,very thoughtful around the patient and the provider

73、 experience.And well continue to migrate scripts both for Elevance as well as Kroger over the next year or so in addition to the work that were doing aroundParagon and our infusion businesses.So overall,very,very pleased across the portfolio in Carelon.Gail Boudreaux-Elevance Health Inc-President,Ch

74、ief Executive Officer,DirectorThank you,Pete.And next question,please.OperatorStephen Baxter,Wells Fargo.Stephen Baxter-Wells Fargo Securities,LLC-AnalystThanks for the color on the exchanges.I was hoping if you could expand a little bit maybe quantitatively on kind of how different the effectuation

75、rate is actually coming in.I guess how much of a membership step down youre expecting when we get to the second quarter?And how much,if at all,are these dynamics impacting?How youre thinking about exchange profitability for the year inside your guidance?Mark Kaye-Elevance Health Inc-Chief Financial

76、Officer,Executive Vice PresidentWeve been very pleased with our sustained growth in the individual ACA market.And we expect 2025 to be another year of growth likely at orabove market levels.Our member effectuation rates,which are essentially the proportion of all members who have paid their premiums

77、,are indeedtracking a little bit lighter than our initial expectations.And this is really due in part to a surge in passive renewals among people transitioning from Medicaid who are now paying premiums in 2025.Given the 90 day grace period has now ended,we do project membership attrition in the mid

78、single digit percent range in early Q2,after whichwell anticipate our membership or ACA membership base will stabilize for 2025.And importantly,these revised membership assumptions are factored into our reaffirmed 2025 EPS guidance.And so you could think aboutcommercial risk-based membership really

79、ending the year in the range of 4.9 million to 5 million members.Gail Boudreaux-Elevance Health Inc-President,Chief Executive Officer,DirectorThanks,Mark.Next question,please.OperatorAndrew Mok,Barclays.8REFINITIV STREETEVENTS|Contact Us2025 Refinitiv.All rights reserved.Republication or redistribut

80、ion of Refinitiv content,including by framing or similar means,is prohibited without the prior writtenconsent of Refinitiv.Refinitiv and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies.APRIL 22,2025/12:30PM,ELV.N-Q1 2025 Elevance Health Inc Earnings CallAndrew

81、Mok-Barclays-AnalystIt looks like todays MLR finished better than what was implied from your comments at our March conference.Can you help us understand whatdeveloped favorably in the back half of March to drive that better MLR performance and how is that shaping your view on trend for the balanceof

82、 the year?Mark Kaye-Elevance Health Inc-Chief Financial Officer,Executive Vice PresidentAs expected,our Medicare Part D medical cost ratio in the quarter ended up where we expected.And the primary drivers here really come fromboth the IRA as well as a premium tax that we incurred that was larger tha

83、n anticipated specifically on the premium tax related to one of our largerMedicaid states,and that premium tax had the dual effect of both lowering current period benefit expense ratio and increasing the current periodoperating expense ratio.But importantly,with no material impact on overall operati

84、ng earnings.And this adjustment effectively accounts for the majority of that positivevariance that youre seeing between our reported benefit expense ratio and the updated analyst consensus estimates.Gail Boudreaux-Elevance Health Inc-President,Chief Executive Officer,DirectorThanks,Mark.Next questi

85、on,please.OperatorLisa Gill,JPMorgan.Lisa Gill-JPMorgan-AnalystI appreciate the comments around Medicare elevated but manageable.Can you maybe just talk about new members versus existing membersand how those new members came on when we think about risk coding?And then just lastly,Mark,can you help u

86、s understand on Part D and the changes on IRA,what the specific impact was to medical cost trend orMLR in the first quarter?Mark Kaye-Elevance Health Inc-Chief Financial Officer,Executive Vice PresidentLet me maybe start firstly with the Part D piece.Weve received a lot of questions from investors o

87、n this topic in the last little while.So let me takemaybe a moment just to first provide some additional context about the Part D Inflation Reduction Act changes,and then Ill get to your specificquestion.There are really two key factors at play here in 2025.First is the lower$2,000 member maximum ou

88、t of pocket cap,which really accelerates whenbeneficiaries reach their cost sharing limit,and that effectively shifts more liability onto the health plans early in the year.Second is the offset from the enhanced CMS direct subsidies that replace some of that cost burden that members and plan sponsor

89、s carried inprior years.And when taken together,these changes effectively reverse the usual quarterly seasonality pattern for Part D.And that results in stronger financial performance in the earlier quarters and lower margins in the later quarters.And although its still early,weare seeing this new s

90、easonality pattern play out from both a pricing and a forecasting perspective.9REFINITIV STREETEVENTS|Contact Us2025 Refinitiv.All rights reserved.Republication or redistribution of Refinitiv content,including by framing or similar means,is prohibited without the prior writtenconsent of Refinitiv.Re

91、finitiv and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies.APRIL 22,2025/12:30PM,ELV.N-Q1 2025 Elevance Health Inc Earnings CallAnd so to your question,you could think about Part D seasonality now much more closely resembling that of a broader medical benefits

92、 businesswith a much steeper slope as more members enter into that catastrophic phase of coverage as the year progresses.And then briefly just on Medicare Advantage membership,we are carefully managing the new volume and we are delivering targeted growthacross specific populations,products,and geogr

93、aphy.Gail Boudreaux-Elevance Health Inc-President,Chief Executive Officer,DirectorAnd I guess I would just reiterate in terms of your membership,we feel really good about where we grew the products,where we grew and thegeography.So in terms of the strategy that we laid out last year and shared with

94、you,we feel that thats playing out and feel this is very consistentwith the expectations we set.So thank you and next questions,please.OperatorAnn Hynes,Mizuho Securities.Ann Hynes-Mizuho Securities USA-AnalystEarlier in the conference call,you cited that Medicare trends were in line with your expec

95、tations.Can you actually remind us what is embedded inguidance,meaning are you assuming 2024 trends growing high single digits or mid single digits?Any clarification,I think would be very helpful.Mark Kaye-Elevance Health Inc-Chief Financial Officer,Executive Vice PresidentI think we feel pretty com

96、fortable that trends have emerged consistent with the expectations that were managing.And maybe if I take this questionfrom a slightly different angle thinking through the margin perspective,we really do feel good about our positioning in Medicare,having seen thecomposition of our membership.And imp

97、ortantly,the results to start the year.Just as a reminder,we do expect to see stable margins in 2025.And thats going to come throughstrong retention rates,disciplined cost management,and importantly,the improved recognition of that member acuity following the elevatedutilization trends that weve see

98、n in recent years.Gail Boudreaux-Elevance Health Inc-President,Chief Executive Officer,DirectorNext question,please.OperatorRyan Langston,TD Cowen.Ryan Langston-TD Securities-AnalystYou mentioned flu and respiratory was affecting the quarter.Sorry if I missed it,but can you just give us a sense on h

99、ow much of the specific impactthat was on the first quarter MLR and if those respiratory trends were different between your service lines or patient populations?10REFINITIV STREETEVENTS|Contact Us2025 Refinitiv.All rights reserved.Republication or redistribution of Refinitiv content,including by fra

100、ming or similar means,is prohibited without the prior writtenconsent of Refinitiv.Refinitiv and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies.APRIL 22,2025/12:30PM,ELV.N-Q1 2025 Elevance Health Inc Earnings CallMark Kaye-Elevance Health Inc-Chief Financial Of

101、ficer,Executive Vice PresidentWe entered the year of modeling in influenza and influenza-like season to follow the pre-COVID norms,which are somewhat higher than what weobserved during the pandemic era.And despite those prudent assumptions,first quarter flu-driven costs came in modestly above our ow

102、nexpectations.And importantly,here,the severity of those flu cases was in line with our assumptions.And given the recent decrease in flu incidence rates,wedont anticipate any outsized impacts in the second quarter.So for the first quarter,to your question,you can think about the impact of the benefi

103、texpense ratios between 15 basis points and 20 basis points.Gail Boudreaux-Elevance Health Inc-President,Chief Executive Officer,DirectorThank you,Mark.Next question,please.OperatorErin Wright,Morgan Stanley.Erin Wright-Morgan Stanley&Co-AnalystAppreciate the detail on the EPS cadence,and theres a l

104、ot of moving pieces with the Medicaid state rate dynamics and how that progresses overthe course of the year has anything changed on that front,but you also have respiratory that you just called out,Part D seasonality.I guess what is-where does that leave us for MLR in the second quarter?And anythin

105、g else to call out that we should be aware of as were thinkingabout the upcoming quarter?Mark Kaye-Elevance Health Inc-Chief Financial Officer,Executive Vice PresidentWe are pleased with our results in the first quarter with Id say seasonality consistent with what we anticipated in the January guida

106、nce.A coupleof key factors to call out here.First,our first quarter benefit expense ratio did benefit from that favorable workday calendar that effectively pulledforward some earnings into the first quarter.Second,as you noted,there was the Part D benefit design changes,and that has notably shifted

107、that earnings cadence of our Medicare drug plans.And well expect that Part D seasonality going forward to more closely resemble our medical benefits business I mentioned earlier.And then finally,we are seeing a more front loaded earnings contribution,thanks to our shift in membership mix,namely lowe

108、r Medicaid membershipand then higher ACA growth.And all of this gets back to our point of continuing to expect more than 60%of earnings to be realized in the firsthalf of the year.Gail Boudreaux-Elevance Health Inc-President,Chief Executive Officer,DirectorAnd sort of just to reiterate based on the

109、number of questions sort of on our expectations,I guess I would say we came into the year very respectfulof the environment and had planned and are seeing an elevated season.But feel that weve accounted for that and feel quite frankly that werejust going to continue to monitor the situation,but as M

110、ark has shared,feel comfortable in the ranges and the reiteration of our guidance.Next question,please.11REFINITIV STREETEVENTS|Contact Us2025 Refinitiv.All rights reserved.Republication or redistribution of Refinitiv content,including by framing or similar means,is prohibited without the prior writ

111、tenconsent of Refinitiv.Refinitiv and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies.APRIL 22,2025/12:30PM,ELV.N-Q1 2025 Elevance Health Inc Earnings CallOperatorBen Hendrix,RBC Capital Markets.Ben Hendrix-RBC Capital Markets-AnalystI was getting a lot of ques

112、tions about visibility into the remainder of the year,and I appreciate your comments about MA new members and yourability to detect trends sooner.But I was wondering if you could specifically talk about your new member engagement strategy.How many of those new members youve actually reached out to a

113、nd engaged and kind of how youre thinking about that translating to primarycare activity and outpatient referrals later down the road?Gail Boudreaux-Elevance Health Inc-President,Chief Executive Officer,DirectorIm going to ask Felicia Norwood,who leads our Government business to address that.Felicia

114、 Norwood-Elevance Health Inc-Executive Vice President,President-Government Business DivisionI mean certainly,as soon as members come into Elevance Health,we are very focused on making sure that we engage those members early.A verydedicated focus around getting individuals to have their annual wellne

115、ss visits,expediting care early on,and making sure we understand whattheir health risk assessments look like so that we are able to be very focused on the type of care that they need and the care coordination thatcomes from our clinical team.Previously,we would have waited longer on some of those.We

116、ve accelerated a lot of those to make sure that we are doing complete and accuratecapturing of those individuals and their health conditions,all with the expectation that we do everything that we can to maintain quality and makesure that those individuals have a very strong experience with us.So wer

117、e very focused on making sure that individuals get the care they need,being able to get them to see their physicians early and establishinga plan of care early into our relationship with them going forward.Gail Boudreaux-Elevance Health Inc-President,Chief Executive Officer,DirectorAnd just a few ot

118、her things that I would like to reiterate about our membership.One,if you think about our product mix,its heavily HMO.Andweve also been moving much more aggressively into value-based care,where our physicians are much more actively engaged with their patientsearlier in the year.And specifically,incr

119、easing our upside downside risk percentage of that.So if we look at our Medicare book,we feel very good about the activeengagement and the more accurate capture of our clinical conditions across the board.And again,as we shared,I think in some of our comments,we feel good about the disciplined strat

120、egy that we executed this year around growthand geographies and specifically,on our product types.So overall,we feel that thats playing to the expectations that we laid out and theyre goingto continue to manage it and continue to engage our patients to ensure that they get the right care and that we

121、 align them appropriately withour value-based providers.But thank you very much for the question and next question,please.12REFINITIV STREETEVENTS|Contact Us2025 Refinitiv.All rights reserved.Republication or redistribution of Refinitiv content,including by framing or similar means,is prohibited wit

122、hout the prior writtenconsent of Refinitiv.Refinitiv and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies.APRIL 22,2025/12:30PM,ELV.N-Q1 2025 Elevance Health Inc Earnings CallOperatorJosh Raskin,Nephron Research.Joshua Raskin-Nephron Research-AnalystIf you think

123、 about your MA bid strategy in the coming years,how important is the lifetime value of the member and the opportunity to penetratethat member with additional say Carelon Services and which Carelon Services specifically benefit most from that growth in MA?Gail Boudreaux-Elevance Health Inc-President,

124、Chief Executive Officer,DirectorIm going to ask Felicia first to just address our overall Medicare strategy and then Pete to comment a little bit about how were embedding boththe Carelon Services but also,as I mentioned a minute ago,our value-based care.So Felicia,first and then Pete.Felicia Norwood

125、-Elevance Health Inc-Executive Vice President,President-Government Business DivisionI mean we absolutely want to make sure that we have members for life.At the end of the day,we want to be a lifetime trusted partner and reallyvalue the relationship that we have with our members.Members choose Medica

126、re Advantage because of the value that it brings,and we thinkthat value is significant relative to fee for service.If we think about our bid strategy for 2026,its certainly still early.But I can assure you that it will be a very thoughtful and disciplined one thatsvery much focused on stability and

127、sustainability in our Medicare Advantage program and making sure that we are leveraging and engaging ourCarelon partners and making sure that those individuals receive the highest quality care,particularly for those with complex conditions.Pete?Peter Haytaian-Elevance Health Inc-Executive Vice Presi

128、dent and President,Carelon and CarelonRxI think its a really great question,Josh.I appreciate it very much.Were trying to be very targeted around what we do.And as Felicia said,we faceoff with our health plan partners in this case,to your question,Felicia and the government programs team identify th

129、ose areas of complexity andhigh cost and how we can effectively build clinical and engagement strategies around them.If you look at our portfolio of offerings,were being very,very intentional about that.So starting off on our value-based care strategy and how wereapproaching that through Mosaic.Youv

130、e heard us talk a lot about post acute care and what were doing through our PAS offerings.Most recently,with CareBridge,and I think a real differentiated way to manage care in the home,highly scalable,I think in a capital efficient way.And then services at the end of life and in some cases,in the mo

131、st complex periods of members around palliative care.On the pharmacy side,youlook at the areas that were very focused in on around SpecialtyRx,et cetera.So were being very thoughtful around Government programs business,around Medicare specifically and trying to touch members in the momentsthat matte

132、r in these areas of real high cost complexity in healthcare and its really what powers the flywheel that we talk about in the company.Gail Boudreaux-Elevance Health Inc-President,Chief Executive Officer,DirectorNext question,please.13REFINITIV STREETEVENTS|Contact Us2025 Refinitiv.All rights reserve

133、d.Republication or redistribution of Refinitiv content,including by framing or similar means,is prohibited without the prior writtenconsent of Refinitiv.Refinitiv and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies.APRIL 22,2025/12:30PM,ELV.N-Q1 2025 Elevance H

134、ealth Inc Earnings CallOperatorSarah James,Cantor Fitzgerald.Sarah James-Cantor Fitzgerald-AnalystI wanted to go back to the RAF score availability because I think its an important point and likely knowable at this time.So one of your peers sawa lower portion of new members on boarding with RAF scor

135、es than normal.How did the portion of new members that onboarded with existing RAF scores compare to historical average for Elevance?And can you give ussome context of what the typical step up is of what portion new members have RAF scores typically versus year two when theyre renewing withyou?What

136、portion have RAF scores?Mark Kaye-Elevance Health Inc-Chief Financial Officer,Executive Vice PresidentSo risk adjustment remains a critical component of how we ensure that member benefits are aligned with their healthcare needs.And over thepast couple of years,weve navigated two consecutive years of

137、 reimbursement changes to the program,including shifts in the underlying riskmodel.And while the base-the recent base rate release was more reflective of actual trend,it doesnt fully restore the impact of prior underfunding.Andyou can think about us as remaining disciplined in how we approach benefi

138、t design and coding.And our focus on accurately documenting member conditions better ensures we can support their clinical needs.And ultimately,we do see riskadjustment thats helping to ensure seniors receive the comprehensive care they deserve while also supporting a sustainable,stable marketplacef

139、or the long term.Gail Boudreaux-Elevance Health Inc-President,Chief Executive Officer,DirectorAnd I would just say our members are aligned with the expectations we set.So thank you for the question.OperatorJustin Lake,Wolfe Research.Justin Lake-Wolfe Research-AnalystCan you tell us how Medicaid MLR

140、margin trended from Q4 last year to Q1 this year?Just flat,up,down?And then does your guidance still anticipateMedicaid margins being flat year over year in 2025 before improving in 2026?Mark Kaye-Elevance Health Inc-Chief Financial Officer,Executive Vice PresidentMaybe at a very high level,the bene

141、fit expense ratio did decrease sequentially more from the fourth quarter of last year to the first quarter of thisyear than is typical.And you could think about that really as being driven by a workday dynamics in the first quarter and Medicare Part D seasonalitychanges.14REFINITIV STREETEVENTS|Cont

142、act Us2025 Refinitiv.All rights reserved.Republication or redistribution of Refinitiv content,including by framing or similar means,is prohibited without the prior writtenconsent of Refinitiv.Refinitiv and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies.APRIL 2

143、2,2025/12:30PM,ELV.N-Q1 2025 Elevance Health Inc Earnings CallOn Medicaid,I would say trends remain elevated but decelerated as expected during the first quarter.And that reflects the stable membershiplevels and utilization patterns and this really aligns with our broader view that recovering Medica

144、id margins is likely to be a tale of two halves.Were going to see stabilization early in the year and then improvements materializing in the latter half of the year as rate updates continue tocome in.Gail Boudreaux-Elevance Health Inc-President,Chief Executive Officer,DirectorThank you.Next question

145、,please.OperatorJoanna Gajuk,Bank of America Securities.Joanna Gajuk-BofA Securities,Inc-AnalystActually,to follow up on this last comment in terms of Medicaid rate outlook.Like you say,you expect some improvements that can have.So anyupdate you might have?I mean I understand that July rate update r

146、ight will be important here but any indications there?And also when will youknow those July rate updates?Gail Boudreaux-Elevance Health Inc-President,Chief Executive Officer,DirectorThanks for the question.Felicia?Felicia Norwood-Elevance Health Inc-Executive Vice President,President-Government Busi

147、ness DivisionOur Medicaid team is in constant communication with our state partners,advocating for actuarially sound rates that adequately account for theelevated acuity and cost trend that we certainly experienced late last year.Today,our January and April rate renewals were in line with our expect

148、ations and really reflect progress towards bringing rates back to a level thatwill prospectively cover cost trends.When we think about July,our July renewals represent about one-third of our membership,and early discussionswith our states are underway,but its far too soon to comment around where we

149、are because those discussions have really just commenced.I will say that we will continue to provide regular updates to our state partners and work very closely with them to make sure that our go-forwardrates align with the level of trend were experiencing in our Medicaid book.Gail Boudreaux-Elevanc

150、e Health Inc-President,Chief Executive Officer,DirectorAnd as we said,I think theyve been very constructive discussions with our state to align rates to the acuity of the population.Next question,please.OperatorGeorge Hill,Deutsche Bank.15REFINITIV STREETEVENTS|Contact Us2025 Refinitiv.All rights re

151、served.Republication or redistribution of Refinitiv content,including by framing or similar means,is prohibited without the prior writtenconsent of Refinitiv.Refinitiv and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies.APRIL 22,2025/12:30PM,ELV.N-Q1 2025 Eleva

152、nce Health Inc Earnings CallGeorge Hill-Deutsche Bank-AnalystThis is probably one for Mark and for Pete is I have a question about V28.And I guess could you talk about the-your expected impact from theV28 risk model change this year kind of as it relates to last year?And what Im really trying to foc

153、us on is,is this kind of a lapping effect as it relatesto the implementation of the risk model or a stacking effect?And I dont know if its too early to think about like what happens as we move from25 into 26.Mark Kaye-Elevance Health Inc-Chief Financial Officer,Executive Vice PresidentIll get starte

154、d here.The V28 risk adjustment model has introduced changes to the way that the Medicare Advantage plans obviously receive fundingbased on members clinical and demographic profiles.And these modifications obviously affect how we document and report chronic conditions,factors that really ultimately h

155、elp align planned payments with the healthcare needs of our members.That said,these changes were anticipated and incorporated into our 2025 planning and pricing.And were going to continue to take a disciplinedapproach to benefit design and remain focused on driving that value through strong member e

156、ngagement and effective care coordination.And over time,we really believe our operational execution and our diversified portfolio position put us in a good place to navigate this transition.Gail Boudreaux-Elevance Health Inc-President,Chief Executive Officer,DirectorThank you.Next question,please.Op

157、eratorWhit Mayo,Leerink Partners.Whit Mayo-Leerink Partners-AnalystJust wanted to follow up on Group MA.I dont think I heard you directly comment on this,but are you seeing any different trends with care activityor utilization patterns versus individual MA,not versus your expectations per se,but jus

158、t anything different about group MA?Mark Kaye-Elevance Health Inc-Chief Financial Officer,Executive Vice PresidentThe utilization patterns that we observed in the first quarter do not indicate any meaningful acceleration in cost trend for our group MA business.And just to remind you,that represents

159、about 15%of our total Medicare Advantage enrollment.And as a reminder,our MA growth this year does include meaningful contribution from really one large group MA account,and so retention acrossour book remains strong.Well also continue to approach this segment with discipline,ensuring that the offer

160、ings are sustainable and aligned withour long-term margin objectives.So Id say while trends are elevated,its early in the year for completion factors to fully mature,but weve not seen changes in utilization patternsfrom what we expected.Gail Boudreaux-Elevance Health Inc-President,Chief Executive Of

161、ficer,DirectorAnd I think we have one last question in the queue.16REFINITIV STREETEVENTS|Contact Us2025 Refinitiv.All rights reserved.Republication or redistribution of Refinitiv content,including by framing or similar means,is prohibited without the prior writtenconsent of Refinitiv.Refinitiv and

162、the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies.APRIL 22,2025/12:30PM,ELV.N-Q1 2025 Elevance Health Inc Earnings CallOperatorMichael Ha,Baird.Michael Ha-Robert W.Baird&Co.,Inc.-AnalystRegarding Part D,I just wanted to double click into it a bit more.Based on th

163、e emerging Part D claims data youre seeing year to date,I was wonderingif you could discuss the utilization,what percent of your MA Part D members are already through their maximum out of pocket limits?How does that compare to your expectations?Basically,how much clarity do you have on the new norma

164、l of utilization behavior?And I guess thefear is if there was going to be higher than expected Part D utilization levels and it doesnt materialize until the back half of this year,then plansmay end up missing it in their June bid.So is there any way at all that you could help us sort of assuage thos

165、e concerns?Mark Kaye-Elevance Health Inc-Chief Financial Officer,Executive Vice PresidentPerhaps the best place for me to start is to say that we are comfortable with the mix of our Medicare Advantage membership that weve attractedthis year.We always balance benefit design against risk management an

166、d price discipline so that ultimately,we remain confident that our MAmembership mix is aligned with a sustainable high quality risk pool.With respect to Part D,weve also not observed a substantial variation to our plan this year.And any higher utilization that we might hypotheticallysee would of cou

167、rse Michael,as you know,be balanced by risk corridors,rebates,and other contractual offsets,and thats the way I would thinkabout this.Gail Boudreaux-Elevance Health Inc-President,Chief Executive Officer,DirectorThat was the last question.I just want to reaffirm a few things.One,that we are pleased w

168、ith the start of the year.Were remaining disciplined.Were respectful of theenvironment,and youll continue to see that from us for the course of this year.And I also want to thank everyone on the line for your questions today and your interest in Elevance Health.Were pleased,as I said,with the strong

169、start to the year and were confident that our actions are going to have and make meaningful impact and make healthcare simple,affordable,andaccessible for our members,communities,and care partners.We look forward to updating you on our progress in the quarters ahead.Have a great rest of the week.Tha

170、nk you again for joining us.OperatorLadies and gentlemen,a recording of this conference will be available for replay after 11:00 AM today through May 22,2025.You may access thereplay system at any time by dialing 800-396-1242,and international participants can dial 203-369-3272.This concludes our co

171、nference for today.Thank you for your participation and for using Verizon conferencing.You may now disconnect.17REFINITIV STREETEVENTS|Contact Us2025 Refinitiv.All rights reserved.Republication or redistribution of Refinitiv content,including by framing or similar means,is prohibited without the pri

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178、DECISIONS.2025,Refinitiv.All Rights Reserved.16309320-2025-04-22T19:57:45.43718REFINITIV STREETEVENTS|Contact Us2025 Refinitiv.All rights reserved.Republication or redistribution of Refinitiv content,including by framing or similar means,is prohibited without the prior writtenconsent of Refinitiv.Refinitiv and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies.APRIL 22,2025/12:30PM,ELV.N-Q1 2025 Elevance Health Inc Earnings Call