Elevance Health Inc Q1 2025 Earnings Call Summary

The following is excerpted from the question-and-answer section of the transcript.

Question: AJ Rice - UBS Equities - Analyst : Maybe just try to flush out some of the issues that have been raised regarding Medicare Advantage. I know it's not as large a business for you as it is for some others, but certainly, there's been some discussion about Group MA. Are you seeing anything unusual there? There's concern about the IRA impact. How is that shaping up so far relative to the changes and how you've incorporated them in their outlook? And then I know you said you've got an elevated trend that seems to be in the individual market tracking your expectations. 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 how that's all trending?

Question: Lance Wilkes - Bernstein & Co. LLC - Analyst : Could 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 of business and how that's progressing? And then maybe if you could quantify or give us more details on sales into the Blues and other plans there. And I guess 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 that process, that would be great.

Question: Stephen Baxter - Wells Fargo Securities, LLC - Analyst : Thanks 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 rate is actually coming in. I guess how much of a membership step down you're expecting when we get to the second quarter? And how much, if at all, are these dynamics impacting? How you're thinking about exchange profitability for the year inside your guidance? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent 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

Question: Andrew Mok - Barclays - Analyst : It looks like today's MLR finished better than what was implied from your comments at our March conference. Can you help us understand what developed favorably in the back half of March to drive that better MLR performance and how is that shaping your view on trend for the balance of the year?

Question: Lisa Gill - JPMorgan - Analyst : I appreciate the comments around Medicare elevated but manageable. Can you maybe just talk about new members versus existing members and how those new members came on when we think about risk coding? And then just lastly, Mark, can you help us understand on Part D and the changes on IRA, what the specific impact was to medical cost trend or MLR in the first quarter?

Question: Ann Hynes - Mizuho Securities USA - Analyst : Earlier in the conference call, you cited that Medicare trends were in line with your expectations. Can you actually remind us what is embedded in guidance, meaning are you assuming 2024 trends growing high single digits or mid single digits? Any clarification, I think would be very helpful. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent 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

Question: Ryan Langston - TD Securities - Analyst : You mentioned flu and respiratory was affecting the quarter. Sorry if I missed it, but can you just give us a sense on how much of the specific impact that was on the first quarter MLR and if those respiratory trends were different between your service lines or patient populations?

Question: Erin Wright - Morgan Stanley & Co - Analyst : Appreciate the detail on the EPS cadence, and there's a lot of moving pieces with the Medicaid state rate dynamics and how that progresses over the 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 anything else to call out that we should be aware of as we're thinking about the upcoming quarter?

Question: Ben Hendrix - RBC Capital Markets - Analyst : I was getting a lot of questions about visibility into the remainder of the year, and I appreciate your comments about MA new members and your ability 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 you've actually reached out to and engaged and kind of how you're thinking about that translating to primary care activity and outpatient referrals later down the road? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent 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

Question: Joshua Raskin - Nephron Research - Analyst : If you think about your MA bid strategy in the coming years, how important is the lifetime value of the member and the opportunity to penetrate that member with additional say Carelon Services and which Carelon Services specifically benefit most from that growth in MA? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent 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

Question: Sarah James - Cantor Fitzgerald - Analyst : I wanted to go back to the RAF score availability because I think it's an important point and likely knowable at this time. So one of your peers saw a lower portion of new members on boarding with RAF scores 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 us some context of what the typical step up is of what portion new members have RAF scores typically versus year two when they're renewing with you? What portion have RAF scores?

Question: Justin Lake - Wolfe Research - Analyst : Can you tell us how Medicaid MLR margin trended from Q4 last year to Q1 this year? Just flat, up, down? And then does your guidance still anticipate Medicaid margins being flat year over year in 2025 before improving in 2026?

Question: Joanna Gajuk - BofA Securities, Inc - Analyst : Actually, to follow up on this last comment in terms of Medicaid rate outlook. Like you say, you expect some improvements that can have. So any update you might have? I mean I understand that July rate update right will be important here but any indications there? And also when will you know those July rate updates?

Question: George Hill - Deutsche Bank - Analyst : This 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 the V28 risk model change this year kind of as it relates to last year? And what I'm really trying to focus on is, is this kind REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent 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 of a lapping effect as it relates to the implementation of the risk model or a stacking effect? And I don't know if it's too early to think about like what happens as we move from '25 into '26.

Question: Whit Mayo - Leerink Partners - Analyst : Just wanted to follow up on Group MA. I don't think I heard you directly comment on this, but are you seeing any different trends with care activity or utilization patterns versus individual MA, not versus your expectations per se, but just anything different about group MA?

Question: Michael Ha - Robert W. Baird & Co., Inc. - Analyst : Regarding Part D, I just wanted to double click into it a bit more. Based on the emerging Part D claims data you're seeing year to date, I was wondering if 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 normal of utilization behavior? And I guess the fear is if there was going to be higher than expected Part D utilization levels and it doesn't materialize until the back half of this year, then plans may end up missing it in their June bid. So is there any way at all that you could help us sort of assuage those concerns?