“We have also raised our expectations for RSV-related costs in the second half based on our experience in the first quarter.”

In context

“previous guidance of at least $5.4 billion. We now expect our 2024 medical benefit ratio to be approximately 89.8%, an increase of 210 basis points from our previous guidance. In the first quarter, Health Care Benefits medical costs, primarily attributable to Medicare Advantage, came in approximately $900 million above our expectations. If we break that down further, we estimate that roughly $500 million of that variance is specific to the quarter or seasonal, including the larger-than-expected impact of seasonal respiratory and RSV costs and a return to inpatient seasonality patterns that look much more like pre-pandemic periods. As Karen mentioned, early indicators for April inpatient authorization support our current seasonality projections and their return to pre-COVID patterns. We have also raised our expectations for RSV-related costs in the second half based on our experience in the first quarter. The remaining approximately $400 million of medical cost pressure in the first quarter is driven by elevated utilization trend that our guidance now assumes will persist for the remainder of 2024. The primary drivers of this projected variance include outpatient service categories, such as mental health and medical pharmacy, as well as supplemental benefits such as dental. Partially offsetting some of this pressure is better-than-expected volumes, expense management and increased net investment income, which together are expected to contribute approximately $500 million more than we assumed in our previous full year guidance, with roughly half of this offset occurring in the first quarter. In our Health Services segment, we are updating our estimate for 2024 adjusted operating income”