Elevance Health

“As part of our operations, we are making investments in certain AI administrative tools and solutions to enhance our operations and positively impact the experience of our members, and we continue to explore further innovation using AI.”

“In addition, connectivity amongst technologies is becoming increasingly important, with recent trends bringing greater consumer engagement in healthcare; therefore, the pace at which our customers will need enhanced technologies with sophisticated applications for mobile interfaces, including tools and products that leverage AI to improve the customer experience, will quicken.”

“We continue to enhance interactions with customers, providers, brokers, agents, employees and other stakeholders through digital technology and improvements to internal operations.”

“Medical cost management is really about investments in analytics and AI-enabled tools that, again, allow us to identify those pressures earlier, but more importantly, allow us to implement clinical oversight, payment integrity, changes in our network, those kind of interventions. Those take time to mature, but we need the data, we need the infrastructure in place this year, and we expect to see that next year.”

“On the investment spend here, the 2026 outlook from the first quarter already included approximately $0.75 of EPS tied to those targeted investment spending that we spoke about at the beginning of the year.”

“Those investments should be viewed as part of the ongoing run rate of the business, and that will support areas like AI adoption and workforce enablement, Carelon scaling, etc.”

“In addition, as we've spoken about this morning, we now expect to deploy approximately $0.80 of net below the line favorability from the second quarter into one-time accelerated investments in the second half.”

“We are looking at these as long-term, durable capabilities. Some are technology, but honestly, they're all driven based on improving the capabilities that we have inside of the business.”

“Operating expense increased primarily due to increases in targeted investments to support and strengthen our workforce and accelerate technology adoption, an increase in expenses to address regulatory matters and an increase in premium tax expenses and assessments.”

“The adjusted operating expense ratio was 11.0 percent, an increase of 100 basis points, driven primarily by targeted investments in our workforce and in capabilities that support our long-term operating model.”

“Beyond our EPS outlook, the principal operating elements of our full-year framework remain unchanged, though we now expect our adjusted operating expense ratio to be in the upper half of our full-year guidance range.”

“As part of our operations, we are making investments in certain AI administrative tools and solutions to enhance our operations and positively impact the experience of our members, and we continue to explore further innovation using AI.”

“In addition, connectivity amongst technologies is becoming increasingly important, with recent trends bringing greater consumer engagement in healthcare; therefore, the pace at which our customers will need enhanced technologies with sophisticated applications for mobile interfaces, including tools and products that leverage AI to improve the customer experience, will quicken.”

“Our digital engagement platform, Sydney Health, is designed to give our members access to personalized health and wellness resources, medical, pharmacy, dental and vision benefits details, and virtual care services, all in one place.”

“In addition, connectivity amongst technologies is becoming increasingly important, with recent trends bringing greater consumer engagement in healthcare; therefore, the pace at which our customers will need enhanced technologies with sophisticated applications for mobile interfaces, including tools and products that leverage AI to improve the customer experience, will quicken.”

“Our digital engagement platform, Sydney Health, is designed to give our members access to personalized health and wellness resources, medical, pharmacy, dental and vision benefits details, and virtual care services, all in one place.”

“Carelon Insights capabilities include payment integrity, subrogation, clinical data exchange through our HealthOS platform, research and data services, reporting and clinical analytics, and information technology services and global business process support.”

“We work to mitigate these trends through various medical management programs such as care and condition management, program integrity and specialty pharmacy management and utilization management, as well as benefit design changes.”

“Our approach to cost management relies on capabilities including provider enablement, value-based networks, member engagement, and utilization management.”

“This data can allow us to more efficiently capture information regarding the risk of our membership and the overall adherence to evidence-based medicine, as well as information to more efficiently perform utilization management administration.”

“Carelon Insights capabilities include payment integrity, subrogation, clinical data exchange through our HealthOS platform, research and data services, reporting and clinical analytics, and information technology services and global business process support.”

“We work to mitigate these trends through various medical management programs such as care and condition management, program integrity and specialty pharmacy management and utilization management, as well as benefit design changes.”

“First, we are managing medical cost trend with greater speed and precision. In a dynamic environment, we're improving our ability to detect cost pressures earlier and respond quickly with targeted action plans across our clinical, network, payment integrity, and operating teams. In many cases, we've compressed months of work into days.”

“Medical cost management is really about investments in analytics and AI-enabled tools that, again, allow us to identify those pressures earlier, but more importantly, allow us to implement clinical oversight, payment integrity, changes in our network, those kind of interventions. Those take time to mature, but we need the data, we need the infrastructure in place this year, and we expect to see that next year.”

“It's not just going to be in our cost structure, our expense cost structure. We expect to see it in our medical cost structure, that's what these investments in medical management are about.”

“We work to mitigate these trends through various medical management programs such as care and condition management, program integrity and specialty pharmacy management and utilization management, as well as benefit design changes.”

“Our approach to cost management relies on capabilities including provider enablement, value-based networks, member engagement, and utilization management.”

“This data can allow us to more efficiently capture information regarding the risk of our membership and the overall adherence to evidence-based medicine, as well as information to more efficiently perform utilization management administration.”

“As part of our operations, we are making investments in certain AI administrative tools and solutions to enhance our operations and positively impact the experience of our members, and we continue to explore further innovation using AI.”

“We continue to enhance interactions with customers, providers, brokers, agents, employees and other stakeholders through digital technology and improvements to internal operations.”

“Our approach includes not only the sales and distribution of health benefits products through digital technology, but also implementing advanced capabilities that improve services benefiting customers, agents, brokers and providers while optimizing administrative costs.”

“Medical cost management is really about investments in analytics and AI-enabled tools that, again, allow us to identify those pressures earlier, but more importantly, allow us to implement clinical oversight, payment integrity, changes in our network, those kind of interventions. Those take time to mature, but we need the data, we need the infrastructure in place this year, and we expect to see that next year.”

“It's not just going to be in our cost structure, our expense cost structure. We expect to see it in our medical cost structure, that's what these investments in medical management are about.”

“Operating expense increased primarily due to increases in targeted investments to support and strengthen our workforce and accelerate technology adoption, an increase in expenses to address regulatory matters and an increase in premium tax expenses and assessments.”

“In the first quarter of 2026, based on a strategic review of our operations, assets and investments, management implemented the 2026 - 2027 Operating Model Transformation Program (the “Transformation Program”) to streamline decision-making, simplify organizational structures, and enhance the use of advanced technologies, including artificial intelligence, across the enterprise.”

“As part of our operations, we are making investments in certain AI administrative tools and solutions to enhance our operations and positively impact the experience of our members, and we continue to explore further innovation using AI.”

“Our approach includes not only the sales and distribution of health benefits products through digital technology, but also implementing advanced capabilities that improve services benefiting customers, agents, brokers and providers while optimizing administrative costs.”

“The Star Ratings are used by CMS to award quality-based bonus payments to plans that receive a rating of 4.0 or higher.”

“As you know, stars remains one of our core enterprise priorities. We've made significant investments that we believe will continue to improve performance over time. We've enhanced our CAHPS infrastructure with AI-powered personalized member engagement, omni-channel outreach, and rewards programs.”

“While we're not prepared or should not be making predictions about payment year 2028 in the future, we feel really good about the trajectory of the business.”

“Our 2026 Star Ratings reflect that approximately 59% of our Medicare Advantage members are enrolled in plans rated at least 4.0 Stars or higher, or the equivalent.”

“We've also invested in clinical data interoperability, strengthening provider engagement, and expanding programs focusing on closing gaps in care, which is obviously very important.”