For 2024, I give you some directional indicators at this point in time. First, big picture for the enterprise. We expect it to be another attractive year of growth for the Cigna Group in aggregate, specific to the commercial marketplace, we expect within the commercial marketplace portfolio, our results continue to be led by our sustained strong performance. The combination of our select segment and our middle market segment where our value proposition and our products and services are resonating quite well. Strong retention and good new business adds within that portfolio. And then specific to National Accounts. Currently, our outlook for 2024 is on the benefit side of the equation, after some outsized growth in 2023, 2024 will look a little bit more normalized relative to prior years.
And to remind you, strategically for that segment, we’ve expected to see that segment be a flat to slightly shrinking segment in the market in aggregate within the employer landscape. Our strategy has us maintaining share and deepening our relationship with our clients through our further expanding portfolio of specialty services. So to put a circle around it, it will be another strong year of growth for the Cigna Group in aggregate, and the commercial portfolio in 2024 will be led by the sustained strength of the select and the middle market business. Specific to Villages, a quick tee up to your comment. Our commercial employers today already are seeing a step function to benefit from our relationship with Village and then the Village Summit acquisition in the nature in which we’ve structured that relationship.
So we were able to deliver a step function of value to our commercial clients already, be they self-funded, be they shared returns, be they guarantee cost from that standpoint. And then the team is aggressively at work to further enhance the value proposition there. And Eric, I’ll just ask you to provide a little color in terms of the way in which the teams are working together to advance the value-based care traction.
Eric Palmer: Sure. Stepping back a bit for Village, have you think about both the financial and the strategic component of our relationship with Village, as you know, we got a minority stake of ownership now. And so that’s performing consistent with our expectations. From a strategic perspective, think of our work with Village is one Village and us being committed partners to work together. We’re working to build an alignment of an ecosystem of high-performing providers where we can ramp Village and Summit’s operations with some of our clinical assets, raft and support with the data and insights from both organizations to help to ensure patients can get to the best care they need, the best specialists they need, the highest quality, et cetera.
And I really think of that as ultimately applicable across commercial or government plans. Our focus in the near term has been, I’ll say, more skewed towards the commercial market, but it’s an approach that works across any payer here, right, because it focuses on getting to the highest quality, best care available for an individual. And that transcends across all the markets. Over time, we’ll work to continue to expand this. But to date, off to a good start and pleased with the progress and the momentum that we’re building with our partnership with Village.
Operator: Our next question comes from Scott Fidel with Stephens.
Scott Fidel: I was hoping maybe we could just toggle over to MA for a second, and maybe just give us sort of a framing of uppers on how sort of MLR was performing, and pretax margin sort of baseline versus the long-term government 3% to 5% target for ’23? And then, if you want to give us some initial observations on how the AEP seems to be developing for you, and how you feel about MA growth next year versus, let’s call it, the industry forecast around 7% growth.
David Cordani: Scott, it’s David. Just a couple of comments, and I’ll ask Brian to peel back a couple of your specific points. First, as I noted in my prepared remarks, we’re pleased with the Stars position, the stable, strong Stars position we have, and continued traction of our ongoing focus to expand our geographic footprint. And then I’ll ask Brian to expand on a little bit more significantly, as well as our ongoing investments in terms of our broad set of capabilities. 2023 was a very good year of growth for us in terms of this business portfolio, and our market expansion plans are on track for 2024. Brian, could I ask you to expand on that a little bit?
Brian Evanko: Sure, David. Scott, maybe I’ll take your questions in a little bit of a reverse order, and start with AEP and the growth expectations, then I’ll get to the margin profile. As David just referenced, we’re really pleased with the growth in the MA book year-to-date. Customers are up 13% year-to-date 2023. And since 2019, as you know, we’ve gradually expanded our geographic footprint in this business, from covering just 20% of Medicare Advantage eligibles in 2019 to over 40% today. And for 2024, we have some further expansion transpiring, and we’ll now have offerings in about 45% of the addressable market. As we approach the 2024 bid cycle, we employed a micro market posture as we always do, and this resulted in stable benefits in most geographies and a few areas where we had targeted pullbacks and benefits in light of the funding environment.
Now it’s really early in the AEP, as you can appreciate, and there’s still several weeks to go. But taken all together, based on what we know today, we would expect to see net customer growth again in 2024. As it relates to the margin profile, as we expected, our 2023 margins continue to be below our long-term target margin range, which is 4% to 5% on this book of business. You can think of this as primarily driven by administrative expenses as we have outsized investment spend and geographic expansion, product expansion and new capabilities. So you should think of the MA margins as representing a source of future embedded earnings power that will contribute toward our long-term growth in Cigna Healthcare segment income over a multiyear basis.
For 2024, we expect to continue running below our long-term target margin range in this business. The final projected margin here will also be a function of geographic mix, product mix and customer duration mix, depending on how that shakes out in the AEP and across the balance of the year. So we’ll certainly be prepared to give you more detailed guidance during the fourth quarter call, but hopefully, that helps turn out.
Operator: Our next question comes from Gary Taylor with Cowen.
Gary Taylor: I just wanted to go back and ask one more question about the exchange business and expectations for next year. When we look at the pricing actions you guys took about across markets, it looks very, very outsized versus what the rest of the industry did. So I think that’s it’s a huge positive in terms of the margin expectation. But historically, companies that have done that have seen really significant deterioration of enrollment. So I guess the question is, how much of the at least $28 in 2024 is dependent upon exchange earnings? If we saw the enrollment decline by 30%, 40%, something like that, yet the margin was better, is that impactful to getting to the 24% guidance? Like how much should we care about where we see the enrollment numbers come in?
