Steve Baxter

Krista Nelson and Sandeep Dadlani described growth avenues and AI product momentum, but gave no top-line growth figures for either business.

Bobby explained the three-part trend build and the drivers of favorability, but declined to give a specific 2026 point estimate or 2027 bid assumption.

Bobby said UNH would like to find a path to yes but notable challenges with current structure. Participating in Bridge demo starting July. Provided specific recommendations to CMS believed to serve all stakeholders. Did not commit to BALANCE participation.

Bobby Hunter said aspiration is upper half of 2-4% long-term margin range for 2027 while delivering quality and value. For 2026, feels good about achieving the 50 basis point year-over-year margin advance. Acknowledged widely expected trend still meaningfully above funding levels.

DeVeydt said Medicaid view unchanged with some margin contraction expected in 2026. Projecting rate increases of 6 to 7% in aggregate still below medical trend. January rates somewhat in line with expectations. Some membership contraction expected as they continue managing the business.

Hunter broke down 1 million contraction: 600,000 from plan exits, balance split evenly between group MA pricing discipline with competitor dislocation and individual MA. Expects 2026 industry growth in line with 2025 progression. Benefit cuts, plan closures and broker commission changes constraining growth. Believes in long-term MA growth potential but emphasized importance of program stability.

Conway detailed cohort progression: years 1-2 at negative margins (40% of current membership), years 3-4 at 2%, years 5+ at 8%+. Plans to shift portfolio so years 1-2 become 25-30% and years 5+ become 40%+ to reach 5% VBC target. Rex explained lower target reflects more time and investment needed. Will continue growing VBC for the next decade or more.

Noel said 2025 MA margins still within targeted range despite guidance cut. For 2026, can accommodate current care activity levels and return to historical planning target levels when including elevated trends in bid pricing.

Noel declined to speculate on preliminary rates. Witty expressed hope for rational rate-setting under new administration, noting states in Medicaid have shown rational behavior despite timing lags.

Asher confirmed the math and attributed the remaining improvement to relative risk position and cost trend viewed in tandem, plus added conservatism in back-half sloping.

Drew explained Q1 booking differs from full-year forecast which targets slight receivable by year-end, with June Wakely data needed for accounting corroboration. Sarah added downside scenario would not revert to original meaningful payable assumption from initial guidance, confirming conservative anchor point for current 3% pretax marketplace margin.

Drew detailed 5-6% member month reduction comprising: ~1%+ per quarter continued attrition (consistent with 2025 pace), Florida CMS program rolling off 10/1, probability-weighted RFP puts and takes, and ~140K New York essential plan members rolling off 7/1 due to OB3 provision. Very few OB3 membership impacts in 2026 overall.

Drew explained ex-retro Q3 Medicaid HBR was 94.0%, expecting sequential Q4 improvement from 9/1 and 10/1 rate cohort plus soft November day count to reach approximately 93% for Q4, yielding full year 93.7%.

Drew confirmed baking in over 4% cost PMPM lift in 2H vs 1H. 5% composite rates hitting 29% of revenue in Q3, another 19% on 10/1. Florida retro and New York risk adjustment not in forecast as potential upside.

Drew detailed that full-year 4%+ rates imply mid-3s for back half. Additional levers include pharmacy management returning in one state and behavioral health/home health improvements.

Sarah confirmed no structural differences, states increasingly open to retros and midyear adjustments to properly fund programs.

CFO said Other profit growth of 15-18% is broad-based across all three businesses, with 2pp from Strive and Adapt diabetes M&A, and told Baxter not to read into the ordering of drivers; Nuclear remains strong with double-digit Theranostics growth.

CFO expressed confidence in long-term 12-14% EPS growth targets but noted more planning needed before providing FY2027 specifics. Deferred to Q4 earnings call.

CEO explained potential $200M refund with approximately half shared with customers, yielding ~$100M net benefit. None recognized in P&L yet due to timing and administration uncertainty.

Aaron implicitly confirmed Steve's $10-15M estimate for the individually immaterial items. On revaluation details, directed to upcoming 10-K filing.

Jason confirmed tariff analysis based on current rates. Relative tariff rates matter for sourcing decisions. Now one-third of production value from US, North America over 50%.

Jason indicated Q2-Q4 guided to more normalized growth levels. Favorable mix was Q1-specific, ongoing cost reductions continue. COVID headwind baked into Q2.

Steve Nelson said commercial is a strong, in-line performer and that CVS has accounted for the No Surprises Act IDR pressure, calling the dispute process abused by a small group of players.

Management confirmed core outperformance from medical cost management not yet reflected in updated guidance; maintaining prudent view on cost trends given early stage of year.

Newman confirmed 2026 mid-teens growth off $6.60 minus $0.45 of out-of-period items. Walked through $900M first half items plus $150M provider settlements to get to $750M/$0.45.

Nelson confirmed half of group MA up for renewal in 2026 with disciplined approach, but noted target margins may take more than one cycle. Did not quantify current margin level.

Cowhey clarified $1.6B gross development does not translate to bottom line; net $400M drove guidance raise. IFP exit yields $350-400M variable loss elimination but fixed costs uncertain.

Cowhey confirmed MA margins at negative 4.5-5% for 2024, improving but still loss-making in 2025. Nelson expressed confidence in multi-year path to 3-5% target margins.

Mark said final 2025 risk adjustment was favorable but declined to quantify the in-quarter benefit, pointing to sequential ACA revenue disclosures and citing prudent reestablishment.

Gail provided high-level cost trend commentary citing solid enterprise-wide execution but did not specifically differentiate Medicare vs Medicaid moderation dynamics as asked.

Mark quantified investments at approximately $1 of EPS across three areas: AI/technology adoption, Carelon scaling, and operational/quality initiatives. Gail elaborated on AI deployments including personalized provider matching, reduced denials by 68%, peer-to-peer reviews down over 100%, and new OpenAI partnership.

Gail emphasized constructive state engagement with faster data sharing. Mark added Medicaid margins still expected positive for full year and showing year-over-year improvement in H2.

Mark quantified single-digit percent Q2 attrition from lower effectuation among Medicaid transitioners. Risk-based commercial membership to end at 4.9-5 million. Factored into reaffirmed guidance.

Mark described Medicaid as a first-half/second-half story with elevated trends persisting in H1 and improvement in H2 as rates catch up.

Hazen committed to a view that 2027 coverage loss will be less than 2026 and stated the assumption underlying it, while flagging policy and market variables.

Mike reaffirmed $400M full year resiliency target and framed Q1 EBITDA growth of 1.9% against full year midpoint of ~2.8-2.9%, expecting to be back on plan for remaining quarters.

Mike explained Atlas termination notice by departing commissioner, new commissioner reviewing for potential reinstatement. Texas pause is ~1/3 of $250-450M decline. Other two-thirds: Virginia retro non-repeat and Tennessee reverting to 4 quarters.

Sam cited 18 consecutive quarters of growth, more capital coming online, expanding ambulatory reach, and population growth in HCA markets. Exchanges are a small component of overall diversified demand.

Mike confirmed 5.4% total managed care growth includes exchanges. Core employer-sponsored insurance grew just under 0.5%, with exchanges driving the majority of managed care growth at 22%.

Mike acknowledged supplemental payments came in higher than Q3 guidance, framed Q4 as consistent launching point for 2025 midpoint. Also cited tougher Q4 2023 comp and depressed respiratory season.