“Medical cost trends in our commercial business remain elevated but are broadly in line with our expectations and pricing.”

In context

“we increased our risk adjustment accrual for the 2023 plan year by approximately $225 million. We were disappointed to see such a large change in the final update. We believe this change was in part driven by the significant growth and disruption in the market, particularly late in 2023. For 2024, our population contains a significantly higher proportion of renewing members, and we continue to enhance our revenue integrity efforts to ensure we are appropriately capturing their acuity. As a result of this update, we now expect margins for our individual exchange business to be below breakeven this year; however, we are confident that our 2025 submitted rate filings, which we further enhanced following the 2023 risk adjustment update, will place us back on our multi-year margin trajectory. Medical cost trends in our commercial business remain elevated but are broadly in line with our expectations and pricing. Days claims payable at the end of the quarter were 43.1 days, down 1.4 days sequentially and 3.8 days from the prior year quarter. The decrease versus the prior quarter was primarily driven by elevated reserves held in the first quarter of 2024, including the impact of the Change Healthcare cyber attack. The year-over-year change in DCP was primarily driven by growth in our Medicare business and the impact of increased pharmacy trends. We remain confident in the adequacy of our reserves. Our health services segment generated revenue of approximately $42.2 billion, a decrease of approximately 9% year-over-year primarily driven by the previously announced loss of a large client and continued pharmacy client price improvement. These decreases were partially offset by pharmacy drug mix, incre”