And we’ve gone through that first phase that we’ve been talking about over the last several years on consolidation, data aggregation, et cetera. The second adjustments were really to our workforce. And that, again — last year, we aligned our structure on benefits and services. This gave us an opportunity to look at redundancies across our business and our processes and eliminate handoffs, streamlined, very focused on ensuring that members because of our large benefit businesses can move between those businesses. It’s an integral part of our strategy. And so that’s been an important part of streamlining our work processes, simplifying our member experiences. And so as you think about the investments that we’ve been making in technology, particularly our front-door applications and things that automate some of our work, this was an opportunity for us to make sure that we had the right scaling of our workforce.
And again, in the bigger scheme, these are not significant numbers. But again, I think it’s really important that we constantly look at our cost structure. Then the last part is we went to a hybrid work environment. We’ve been evaluating the size and locations of our work sites, and we took the opportunity to further optimize those to make sure that we were located in the right places and had the right footprint. So as you think about all those, it’s an approximately $700 million of charges, and it results in a run rate of about $750 million. Again, as John said, it doesn’t all drop to the bottom line but that we think is important to support our long-term growth in our enterprise strategy. So that gives you a bit of a sense of how we thought about these as an ongoing opportunity to continue to optimize our cost, which we think is important for affordability in healthcare.
So thanks very much for the question, and next question.
Operator: Next, we’ll go to the line of Sarah James from Cantor Fitzgerald. Please go ahead.
Sarah James: Thank you and echo my congratulations to John. I was hoping that you guys could give a little bit more context around the recapture rate of the terminated Medicaid lives. So are you seeing recapture within Medicaid from the appeal process yet? And then on the ACA side, how do you think about the 30% recapture maturing into 2024 with your members, but then also potentially there’s more people looking for ACA plans in 2024.
John Gallina: Thank you for the question, Sarah. So in terms of the Medicaid redeterminations, as I stated, we’re three to four months into the process. And it’s a little early to have definitive in a very specific data points, but we do have certainly the bias. We’ve seen at 10% to 20% of the members who lost coverage in Medicaid in June reenrolled with us in the third quarter. So we certainly expect trends like that to continue. That’s just one data point. And certainly, there’s more time, but there are gaps in coverage. And then on the individual ACA, we are seeing by the time that folks leave Medicaid, there’s typically a couple of month gap before they become enrolled an ACA plan. So, some of the membership this enrollment is temporary and there’s gaps in coverage.
So we’ve seen that throughout but we think we have a great opportunity in our 14 Blue states. You look at the number of members that were added to Medicaid in our 14 Blue states, that was about 8 million people across all 14 states, about 1.5 million of those were enrolled in Elevance Health Medicaid plans, which means that those other 6.5 million that went to a different carrier if that different carrier is able to retain 40% to 45% of those Medicaid similar to us, which I think is a reasonable expectation, that means that over half of the $6.5 million are in play. And we have leading market share in virtually every market we operate in, both in employer-sponsored as well as very strong in the ACA products. And so we do believe that you will see an acceleration of individual ACA membership in the early 2024 and mid-2024 for Elevance Health so hopefully, that answers your questions.
Thank you for the question.
Gail Boudreaux: Yes. Thanks, John. And Sarah, I think just to sort of put a bow on this, I think it’s really important just to frame it, almost 75% are administrative disenrollments and then over almost 37% are children under 18. So those are two areas, obviously, we’re intensely focused on and there’s a timing issue associated with this. So there’s some delays in coverage and some coverage gaps, and we’ve been working really closely with our states. But as John said, we are seeing some encouraging signs where that 30% or more of our Medicaid members who are terminated prior to the end of June are now returning and retaining coverage with Elevance. So we expect that reenrollment to accelerate in the coming quarters. So I think that’s important to keep in mind as we’re all working through this process And certainly, the states are working through this process, and we have been continuing to adapt how we get to these members particularly the ones that were just enrolled for administrative reasons.
So again, we feel pretty comfortable with the numbers that we shared and the guidelines we showed, and we are seeing pickup certainly in the individual business as this progresses. So thanks again for the question. And next question please.
Operator: Next, we’ll go to the line of Michael Ha from Morgan Stanley. Please go ahead.
Michael Ha: Thanks and congrats to John as well. I wanted to ask a quick question first regarding BioPlus. I wanted to confirm, did you mention you’re going start migrating specialty script away from your legacy platform early next year. Would that imply you’ve made the decision to in-source your specialty drug spend away from CBS? And then my real question, just regarding MA and STAR ratings, in terms of the improvement efforts for CAP specifically, how much of the overall underperformance would you attribute to the providers pivot? And how can you fix those results for that without actually having ownership of providers? I mean how can you effectively drive your provider network to make the necessary changes to improve your results? Curious what the plan is there.
Gail Boudreaux: Thanks for the question, Michael. I’ll have Pete start, and then I’ll address your question on MA.
