Anthem, Inc.

Ladies and gentlemen, thank you for standing by and welcome to the Elevins Health first quarter earnings conference call. At this time, all participants are in a listen only mode. Later, we will conduct a question and answer session where participants are encouraged to present a single question. If you wish to ask a question, please press star then one on your telephone keypad. You will hear a prompt that you have been cued. You may withdraw your question at any time by pressing star then two. These instructions will be repeated prior to the question and answer portion of this call. 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.

Good morning, and welcome to Elevance Health's first quarter 2024 earnings call. This is Steve Tennell, Vice President of Investor Relations, and with us this morning on the earnings call are Gail Boudreau, President and CEO, Mark Kay, our CFO, Pete Itayan, President of Carillon, Morgan Kendrick, President of our Commercial Health Benefits business, and Felicia Norwood, President of our Government Health Benefits Business. Gail will begin the call with a brief discussion of the quarter, recent progress against our strategic initiatives, and our updated outlook for the year. 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 certain non-GAAP measures. Reconciliations of these non-GAAP measures to the most directly comparable GAAP measures are available on our website, ElevanceHealth.com. We will also be making some forward-looking statements on this call. Listeners are cautioned that these statements are subject to certain risks and uncertainties, many of which are difficult to predict and generally beyond the control of Elevance Health. These risks and uncertainties can cause actual results to differ materially from our current expectations. We advise listeners to carefully review the risk factors discussed in today's press release and in our quarterly filings with the SEC. I will now turn the call over to Gail.

Thank you, Steve, and good morning, everyone. We appreciate you joining today's earnings call. I'm pleased to report that Elevance Health delivered first quarter gap earnings per share of $9.59 and adjusted diluted earnings per share of $10.64, reflecting growth of 12.5%. These results reflect disciplined execution of our strategic initiatives during a dynamic time for our industry. Given the solid start to the year, We have increased our guidance for adjusted earnings per share by 10 cents to be greater than $37.20. We are making significant progress on our enterprise strategy in 2024 to accelerate capabilities and services, invest in high growth opportunities, and optimize our health benefits business. On Monday, we announced the next step in our journey to expand access to high-quality, patient-centered, value-based care in our local market. After years of experience working closely with care providers to advance value-based care, we are confident that our hyper-local approach, which aligns the right incentives, real-time patient information, and clinical decision support tools, delivers better health outcomes, improved consumer and provider experience, and greater affordability. Accordingly, we entered into an agreement to form a strategic partnership with Clayton, Dublier, and Rice to build a payer-agnostic advanced primary care and physician enablement business serving consumers across commercial, Medicare, and Medicaid health plans, consistent with the diversity of our own medical membership. Upon formation, the combined company will serve nearly 1 million consumers. The new venture will bring together the strengths of three innovative care provider entities, including certain care delivery and enablement assets of Carillon Health. Importantly, we have worked closely with these companies and their management teams and are confident in the value they deliver for our Medicare, Medicaid, and commercial health plan members and employers. We're excited. to collaborate with CD&R and a broad range of care provider partners to accelerate innovation, enhance healthcare experiences, and improve health outcomes for consumers. The collaborative development of the business will advance our enterprise strategy by accelerating the provision of value-based care for our members and consumers more broadly. with our Caroline businesses providing capabilities to integrate and personalize the care delivered. In time, Elevance Health will have full ownership of what we expect will be a leading platform for value-based care delivery and physician enablement at scale across commercial group, ACA, Medicare, and Medicaid health plans, advancing our role as a lifetime trusted health partner for the consumers we are privileged to serve. In the first quarter, we made tangible progress on our strategic initiatives, notably in Carillon, where we continue to scale our flywheel for enterprise growth. CarillonRx closed its acquisition of Paragon Healthcare, a leading provider of infusion services. We are looking forward to expanding its geographic reach and therapeutic coverage to serve more consumers and Elevance Health members for years to come. If Carol and Rx furthers our enterprise commitment to address the whole health needs of our members, notably those with chronic and complex conditions, we are accelerating the build out of our own specialty pharmacy. For example, we recently entered into an agreement to acquire Kroger's specialty pharmacy business, the sixth largest specialty pharmacy in the country. The acquisition will bolster the growth of our existing pharmacy and infusion businesses while increasing Carillon Rx's access to limited distribution drugs. Carillon Services is also off to a strong start this year, as we implemented and were awarded multiple new contracts, a testament to the value Carillon Services provides. For instance, Carillon Behavioral Health was selected by the Maryland Department of Health to provide behavioral health management services to more than 1.7 million Medicaid members starting in 2025. And in California, our team will partner with the public school system to expand behavioral health management services for students later this year. This initiative represents a major step forward in addressing the critical need for mental health support in educational settings and demonstrates our commitment to improving the health and well-being of our communities. Momentum with external clients is building and underscores the value Carillon Services is creating for health plan customers through better consumer experiences and improved affordability. Our health benefits business is similarly off to a solid start. Commercial margin continues to recover from pandemic-era lows, and we are enjoying momentum and membership growth. notably in our individual ACA plans and among large self-insured employers. Existing clients are demonstrating their confidence in our offerings by consolidating their business with us after years of offering our solutions side by side with those of our competitors. In our Medicaid business, we were pleased to be selected in Florida and Virginia to serve beneficiaries across traditional and complex populations statewide. including those with serious mental illness in Florida and sole source foster care in Virginia. These awards and their pull-through opportunities for Carillon services underscore the distinct value Elevance Health delivers. In the first quarter, our Medicaid business performed in line with our expectations. We estimate that nearly 90% of our members have had their eligibility redetermined. Further, Our team continues to work tirelessly to maximize access to care for Medicaid members subject to eligibility redeterminations, helping them to understand their options in the face of ongoing logistical and operational challenges. Holistically, we are proud of the work we have done in contacting more than 4.5 million Medicaid beneficiaries through our omnichannel approach. Nonetheless, A majority of members who have lost coverage for administrative reasons have not yet returned. We're seeing a gradual increase in Medicaid re-enrollment and anticipate continued upticks in rejoiner rates as more Medicaid beneficiaries recognize their need to re-enroll, aligned with the trends that we have observed in recent months. Turning to Medicare, we were pleased to announce last month that CMS updated the STAR scores for four of our contracts. which increased the percentage of our members in four-star or higher rated contracts to nearly 50%, up from 34%. While this will improve our star quality bonus revenue in 2025, our goal is to have our star quality ratings at the high end of all plans in our local markets, which will be a multi-year journey. Funding for Medicare in 2025 will be challenging for the entire industry. We are disappointed that CMS has decided to cut Medicare Advantage rates for the second consecutive year, which will negatively impact seniors, notably those at the lower end of the income spectrum who rely on the program for their health and well-being. While we remain committed to serving seniors through plan offerings that focus on their unique needs, we will also continue to demonstrate discipline in our Medicare Advantage bids, seeking to balance growth and margin while continuing to deliver exceptional value for seniors. Across the enterprise, our focus on delivering whole health for the consumers we are privileged to serve remains steadfast. We recently released our 2023 Advancing Health Together Progress Report which underscores the strides we are making through value-based care. The report showcases examples of our success, facilitated by the unique partnerships that we've created with care providers across the healthcare ecosystem. I'd like to highlight a particular achievement that underscores our innovative approach to improving quality and value in healthcare. Recently, Elevance Health was honored by the NCQA with its Innovation Award featuring quality accelerators in healthcare for leading-edge strategies that improve quality and value, specifically for our Obstetrics Specialty Provider Enablement Program. The impact of these value-based partnerships and clinical interventions has led to consistent improvements in health outcomes and costs, including reducing preterm birth rates by 12% and low birth weight babies by 20%. all while improving access to timely prenatal care and postpartum follow up. For those interested in learning more about these transformative initiatives and other examples of our progress, I encourage you to visit our Advancing Health Together website. In closing, I want to extend my deep gratitude to our 100,000 associates who embody our purpose of improving the health of humanity through their tireless commitment. It's also heartening to see their efforts recognized externally. We were honored to be named to Fortune Magazine's 100 Best Companies to Work For list for the fourth year in a row. We were also included in their world's most admired companies and America's most innovative companies list. With that, I'd like to turn the call over to our CFO, Mark Kay, to provide more on our operating results and outlook. Mark? Thank you, Gail.