“As we previously discussed, we expect a return of certain variable corporate expenses. We also expect higher interest as we annualize the expense from our May 2024 financing, a decline in net investment income, and modest dilution from the increase in our share count.”

In context

“h in 2025 and beyond. While we will not give formal 2025 guidance until next year when we have better visibility on our 2025 medical cost baseline and our changing membership, I want to provide an update on some of the key headwinds and tailwinds. Starting first with the headwinds, in our PCW segment we expect earnings to decline in line with our long term guidance framework. As David mentioned, we are encouraged by the adoption of CVS CostVantage and the shift of commercial scripts to this model on January 1. We expect 2025 to be a transition year that positions us for outperformance of our long term growth target in future years. We also remain cautious in our outlook for front store sales, which have been pressured in recent quarters, consistent with the broader macroeconomic backdrop. As we previously discussed, we expect a return of certain variable corporate expenses. We also expect higher interest as we annualize the expense from our May 2024 financing, a decline in net investment income, and modest dilution from the increase in our share count. Shifting now to the tailwinds, we expect improvement in contributions from our healthcare benefits segment. We believe our deliberate approach to our 2025 Medicare Advantage bids and our focused changes to our footprint, which we expect to result in membership disenrollment of 5% to 10%, when combined with our improved star ratings will result in margin recovery. This is a significant first step on our journey back to target margins of 3% to 5%. We continue to view the dislocation between acuity and rates in Medicaid as temporary and expect this to be resolved over subsequent pricing cycles; however, we do not expect the dislocation to be fully resolved before the end of 2025. We expect improvement in our individual exchange business as a result of our pricing actions and deliberate produ”