“Foundationally, not expecting a meaningful deviation from the still elevated underlying core trends.”

In context

“Bobby: Yeah. All right. Thanks, Steven. Maybe to go one click deeper on the Medicare piece. Important to remember how we built up the 2026 medical trend, Steven. I'll maybe frame it in three ways for you. First, we saw elevated levels of core utilization in 2025. We talked a lot about that, and we assumed that that would continue into 2026. That was kind of the foundation. Second, we adjusted for known year-over-year increases in things like the fee schedule changes and calendar impacts. Then third, we accommodated for some level of potential unknown risk elements. We've mentioned tariffs and other things of that nature. Now, there are a few things I'd point to in terms of why trends to date are a bit lower than our original expectation. First, we've had some positive claims experience as well as in-year benefit from things like the lighter flu and respiratory season and winter storm impacts that Tim mentioned in the prepared remarks. We've also not seen the full emergence of material unknown elements at this stage. However, it's also really important to highlight that while medical trends remain high versus the historical levels, the improvement we're seeing is also the result of targeted actions that we've taken. We've done that through benefit design, product positioning that's resulted in a more favorable membership mix. We've had network curation activities focused on high-quality, low-cost opportunities with providers for our membership. We've had broad affordability initiatives. Then we continue to invest in aligned provider models like value-based care. Overall, I feel good about our assumptions for 2026, where we currently sit versus our expectations. Yet remain intensely focused on affordability given the still elevated levels of medical trend versus the historical baseline. Then to your question on 2027. Still probably a little bit too early to talk a lot of specifics there, but at the highest level, we did plan reflective of our current experience with appropriate adjustments then for things like fee schedule updates and other natural year-over-year changes. Foundationally, not expecting a meaningful deviation from the still elevated underlying core trends. Thanks for the question.”