Scott Fidel

Hazen gave HCA's in-network posture and the Valesco integration context, and was candid that he could not speak to the industry-wide effect.

Sam highlighted strong cardiac, trauma up 2.5%, and patient logistics center transfers up 2.4% driving higher acuity despite respiratory drag.

Sam confirmed case mix and respiratory impacts were consistent across all payer classes.

Sam highlighted cardiac/electrophysiology demand, ER investment for throughput and supply, and rising case mix driven by patient acuity in medical space. No single division >10% of profits, no service line >15% of revenue.

Mike broke out MA up 4.8%, traditional up 90bps. CMI up slightly for traditional, MA flat. Overall volume improvement across Medicare, Medicaid (positive for first time), and commercial.

Mike outlined mitigation strategies (fixed pricing, supply chain diversification) but acknowledged inability to size tariff impact. On immigration, noted HCA does not hire undocumented workers.

Brian said no need for new end markets, staying focused on U.S. employer (customers up 5%, stop-loss over $8B) and international; Ann flagged stranded overhead and a modest capital release from the exchange exit. Direct.

Brian outlined three growth platforms (Specialty ~35% income, PBS ~25%, Cigna Healthcare ~40%) and three intensification areas: AI personalization, affordable care modalities, and upstream preventive care.

Brian confirmed unchanged adoption milestones: Cigna Healthcare fully insured 2027, 50%+ Evernorth by end 2028. Two revenue streams: core admin fee (per member/script, delinked from drug price) and clinical program fees with risk-based compensation. David emphasized model built customer-first with Price Assure technology.

Brian cited stop-loss repricing tailwind partially offset by absence of Medicare divestiture contributions and individual exchange true-ups. Ann provided detailed stop-loss update: rate execution, persistency, and paid MCR all tracking as expected with enhanced analytics reinforcing full year outlook.

Brian noted two-thirds of stop loss premium renews in Q1, limiting 2025 repricing opportunity. Integrated offerings provide persistency advantage over standalone stop loss carriers.

Mark said OBBBA-related acuity pressure in 2027 is not a broad-based reset like the PHE unwind; Felicia said work requirements affect roughly 20% of the book and are manageable and phased.

Mark detailed disciplined risk management approach with mix of subcapitated full risk and fee-based offerings. Risk-based oncology expanded from commercial to Medicare, with Medicaid launch planned for H2 2026.

Mark confirmed more conservative near-term capital allocation focused on balance sheet strength, targeted investments for margin stabilization, and opportunistic share repurchases. Lower M&A activity in 2026 with priority on integration execution. Long-term framework unchanged.

Felicia confirmed strong HMO and duals investment strategy aligning with Medicaid footprint and Carelon capabilities. PPO never a strong focus for Elevance, with positions further reduced. Expects meaningful progress toward 3% to 5% long-term Medicare margin target range.

Mark reiterated unchanged long-term Health Benefits margin targets but noted more details will come at investor conference. Did not provide specific exchange enrollment breakdown.

Answered both parts: Part D tracking in line to slightly better, and the demo cancellation was inside the band of expectations built into bids.

James emphasized nothing inherently good or bad about any product type, all about pricing and structure. Industry spent 2 years repricing PPO, growth rebalancing between HMO and PPO. Celeste confirmed new and concurrent members in line to better on claims. George said PDP in line with expectations, member behavior and pharmacy trends tracking.

David declined to break out specific growth rates but emphasized balanced margin across HMO and PPO. New strategy eliminates loss-leader plans; both product types can be accretive, more balanced than in the past.

David said growth looks even across segments and geographies, not disproportionate anywhere. George detailed PDP growth from basic/value plans with double the auto-enrollment states.

George detailed Medicaid growth from Virginia launch and Kentucky allocation. Noted 45% of 2025 members in states with <3 years experience, but Florida proof point at expected margins. James confirmed specialty Rx elevated but stable.

London reframed state budget pressure as a managed care opportunity including specialty population carve-ins, but did not address provider tax or 1115 waiver mechanics directly.

Drew detailed membership split at roughly 1/3 basic (LIS) and 2/3 enhanced (non-LIS). Non-LIS specialty trends remain very high from $2K max out-of-pocket IRA provision, with pharma also taking advantage. Had 2025 data to set 2026 bids assuming continuation of high non-LIS trend. Curtailed somewhat but still very high absolute, just below forecast. CMS risk model proposal to accelerate IRA recognition was not adopted, so direct subsidy expected to increase significantly again for 2027.

Drew explained 2025 expanded risk corridor provided breathing room for non-LIS specialty trend from $2K max out-of-pocket, now reverting to statutory corridor for 2026. Membership growing from 8.1M to 8.7M across both LIS auto-assigns and non-LIS. Revenue growth largely from direct subsidy yield increase. PDP now $26B product with good margin.

Drew confirmed multi-year OCF averages 1.3-1.4x adjusted net income, $2B share repurchase embedded in 2025 guidance. Weak 2024 OCF didn't impact capital return.

Management expects a cyclical Medicaid recovery toward target margins around 2028 but gave no average margin view for the 2027 to 2030 period.

Schumacher said 500,000-plus attributable to exchange business with remainder from general market decline, pricing posture, and migration to self-funded. Exchange margins expected around 1% plus or minus. Group margins encouraged by January performance with more than half the gap to 7-9% target expected to close in 2026. Full recovery to target in 2027.

DeVeydt confirmed no changes to dividend practices. Capital deployment priority: pay down debt, then buyback, then strategic acquisitions. Hopes to return to normal practices in back half of 2026. On Optum Health, Hemsley described reshaping back to original conception with likely geographic market withdrawals, practice reshaping, and delivery system alignment.

Rex said H1/H2 relatively balanced for earnings. MCR quarterly pattern familiar: Q1 below 86.5% midpoint, Q4 above, trending up through mid-year. Part D changes will impact slope somewhat.