“As a result, our updated guidance range now reflects the trends in the second half of 2024 could be higher than levels seen in the first half.”

In context

“ome in a range of $2.25 billion to $2.55 billion. We expect HCB’s full year medical benefit ratio to be in a range of 90.6% to 90.8%, an increase of 80 to 100 basis points versus our prior guidance. At the midpoint, our MBR shows a 150 basis point increase from the first half to the second half of 2024, consistent with historical patterns. In our Medicare Advantage block, first half results remain largely in line with our prior expectations, although they have developed differently than we previously projected. Medical cost trends remained elevated in the second quarter at levels consistent with our restated first quarter experience, which benefited from strong prior period development; however, early indicators for July suggest we may see incremental pressure, particularly in in-patient. As a result, our updated guidance range now reflects the trends in the second half of 2024 could be higher than levels seen in the first half. It is worth noting that if trends persist at elevated levels, we may be required to take an in-year 2024 premium deficiency reserve in our Medicare business. While this premium deficiency reserve should not have an impact on our revised full year expectations for the healthcare benefits segment, it could change the cadence of earnings between the third and fourth quarters. At this time, we have no expectation that we will need a premium deficiency reserve related to our Medicare Advantage block for 2025. Our updated guidance also reflects the continuation of the Medicaid acuity pressure we saw in the second quarter. Our teams are working closely with state partners to align Medicaid rates with higher acuity; however, we are assuming no material improvement in the dislocation between rates”