In addition to that, we’ve had some notable wins with the Blues related to our insights business. We’ve talked about this before, but it’s really critical that we prove some of our risk arrangements and our differentiated capabilities in Elevance and then port those to the Blues. And we’ve seen that play through with several notable wins. Lastly, I’d say we’re excited about the ‘25 pipeline. We’re obviously actively in the selling season, our pipeline is very rich. And again, I would say a large focus on our insights businesses, as well as our behavioral health businesses.
Mark Kaye: On your second question, the seasonality of the adjusted diluted EPS in 2024 is expected to be consistent with the past several years with approximately 55% of earnings in the first half of the year. I also want to call out that workday seasonality, given it is a leap year, did result in a smaller than historically normal impact in the first quarter. But we expect the workday seasonality to put slightly more pressure on the third quarter MLR with an offsetting favorability than in the fourth quarter as those workdays normalize.
Gail Boudreaux: Thanks, Mark, and thanks for the question, Whit. And I just want to add to Pete’s comments about just the momentum that we’re seeing inside of Carelon. First, our proof points are within Elevance Health, and then secondarily now seeing some really nice momentum and traction externally. So thanks for the question. And next question, please.
Operator: Next, we’ll go to the line of Nathan Rich from Goldman Sachs. Please go ahead.
Nathan Rich: Great. Good morning, and thanks for the questions. Gail, I wanted to follow up on your comments on the Medicare business and the goal of balancing growth and margins. Could you maybe just elaborate on that, given the tougher rate environment that you highlighted? And I think the companies prioritize margin improvement in Medicare this year. Does that kind of remain on track for 2024? And do you expect to plan for further improvement in 2025?
Gail Boudreaux: Thanks for the question, Nathan. As I shared in my opening comments, first of all, the Medicare rate announcement, as you’ve heard, represents the second year of consecutive cuts to the program that we know will result in increased premiums and reduced benefits for seniors with disabilities and particularly those that have really needed this program. Our approach is very consistent. We’re going to continue to be disciplined in our approach to the Medicare business. Our focus is to get consistency, high-value competitive benefits, and balanced growth and margins. We’re focused on building a sustainable, attractive, long-term business. It’s too early to provide specifics for the 2025 bid at this stage, but again, I’m going to repeat, we’re looking to really balance growth and margins.
As we talked about in our Investor Day, our focus is on keeping our members Blue for life and there we’re focused on particularly our 14 Blue states and continuing to prioritize the very significant business we have in DSNP where our unique competitive advantage is serving the needs of those consumers with complex conditions. So overall, we’re in the midst of the process right now, so we’ll have more as we get through the bid process, but thank you very much for the question. Next question, please.
Operator: Next, we’ll go to the line of Stephen Baxter from Wells Fargo. Please go ahead.
Stephen Baxter: Hi, thanks. Just interested. It seems like now you’re talking about an at least 12% EPS CAGR as your long-term expectations in both the slides and the prepared remarks. Like obviously in the past, you’ve talked about a 12% to 15% EPS growth CAGR target. Just wondering what if anything, we should be reading into that? Thank you.
Mark Kaye: Thank you very much for the question. You should see these two targets as synergistic. We remain firmly committed to achieving a long-term adjusted earnings per share CAGR of 12% to 15% through 2027 as we communicated at our Investor Day event last year. And then as we think more broadly around the long-term, we have confidence that through business cycles and over time, the earnings power of our health benefits and Carelon flywheel will generate the momentum and the foundation that’s needed to sustain a long-term compound annual growth rate of at least 12%.
Gail Boudreaux: Next question, please.
Operator: Next, we’ll go to the line of Sarah James from Cancer Fitzgerald. Please go ahead. And Sarah, your line is open.
Operator: Next, we’ll go to the line of Andrew Mok from Barclays. Please go ahead.
Andrew Mok: Hi. Good morning. Hoping you can give us an update on your transition of specialty scripts to BioPlus and help us understand the contribution that that’s expected to have this year. Thanks.
Gail Boudreaux: Thanks. Let me have Pete address your question.
Peter Haytaian: Yeah, thanks for the question, Andrew. Listen, the integration of BioPlus is going well. As you know, we remain on an accelerated calendar regarding this. I’ll just reiterate, we spent last year building out the infrastructure and the team, and we did begin migrating scripts in January of this year. And we’re doing so really on a staged basis. So we’ll continue to do the migration throughout ‘24 and into 2025 as it relates to the Elevance Health book of business. I’d say overall things are going well. The infrastructure build is going well in addition to the BioPlus dispensing facilities that are in place. We’re live with one additional facility now as we speak and we have two more going live this year. So we feel very good about the capacity, not only with respect to the Elevance Health business, but business beyond that. So we’re excited, we’re on a path, and again it will be staged throughout ‘24 and ‘25.
Gail Boudreaux: Yeah, in addition, I’ll just add to what Pete said, to BioPlus, as you know, we also announced the acquisition of Kroger Specialty Pharmacy, and that is also well aligned to Carelon’s effort to control those levers that matter. So thank you for the question. Next question, please.
Operator: Next, we’ll go to the line of George Hill from Deutsche Bank. Please go ahead.
