“As we think about 2026, we expect some margin degradation due to the continued dislocation of premium funding and what we're seeing in terms of elevated medical cost trends. But we do see 2026 as the trough for that performance.”

In context

“gs. And on PDP, really kind of no material contributor or risk to rest of your outlook on that one either. So overall, feel pretty good about how we're stepping into '26 on PDP. Operator: Our next question comes from Ann Hynes with Mizuho Securities. Ann Hynes: Great. My question is focused on Medicaid. At the last call, I believe, you said margins should be in the negative 1% to negative 1.5% range. Is that still a good bogey. And just like looking with the One Big Beautiful Bill, is there anything that would prevent like a path to Medicaid margin recovery in 2007 and 2028? Stephen Hemsley: Mike, do you want to take that? Unknown Executive: Yes, Ann, thanks for the question. As Tim indicated, our view for Medicaid has not changed from last quarter. We expect breakeven in 2026 or in 2025. As we think about 2026, we expect some margin degradation due to the continued dislocation of premium funding and what we're seeing in terms of elevated medical cost trends. But we do see 2026 as the trough for that performance. Our elevated trends are driven as the industry has by specialty pharmacy, behavioral health and also as we look at home health services. We think, over time, the One Big Beautiful Bill, there will be some transformation and work as we collaborate with states. But we see over time about an 18- to 24-month period, we will be able to return to a rate of margins of around 2%. Operator: Our next question comes from Lance Wilkes with Bernstein. Lance Wilkes: Could you talk a little bit about the employer market? And specifically, what's the medical cost trends you're seeing this year and next? And given the pressures on employers, what are some of the strategies they're looking at for the '26 and looking out to '27 on the selling seasons, in particular, any interest in adoption of value-based c”