Gail Boudreaux: Thank you. And just again, to put a fine point, most of the loss in risk membership, is driven by both the Medicaid redeterminations and the adjustment in the footprint that we’ve shared with you in the past. So, that really is the key driver. Next question please?
Operator: Next, we’ll go to the line of David Windley from Jefferies. Please go ahead.
David Windley: Hi. Thanks for squeezing me in here. I wanted to go to CarelonRx on the revenue growth side. High growth in 2023 low single-digits, I think you’re expecting in 2024. I suspect the BioPlus acquisition inorganically would have contributed to some of that growth in 2023, but I don’t think it bridges the full change. So maybe you could add some color around the slowdown in growth, the lower growth expectations for CarelonRx in 2024? Thanks.
Peter Haytaian: Thanks David for the question. As it relates to 2023 and the growth of around 18.6% that did exceed our initial guidance and as you alluded to, that was driven primarily by the BioPlus acquisition and including BioPlus and our results to a lesser extent, drug mix and trends. But I would say as it relates to 2024, I would say we have tremendous momentum in the business. And we’re really excited about how our strategy is playing through. We’ve talked about assuming the strategic levers that really matter in our business. We’ve done that with Specialty Pharmacy and BioPlus. We’ve done that with Advanced Home Delivery. You heard about the recent announcement of Paragon and infusion, which we’re really excited about.
And then there are several new product launches that are resonating in the marketplace that we’ve talked about previously, like EnsureRx as one of the examples. And this momentum is playing through in our sales in 2024. We are having a good season. Obviously, that activity occurred in 2023. Our retention remains strong. Our sweet spot does remain in that 3,000 to 10,000 range in terms of the business that we’re attracting. And as you know, there’s a little more reticence in terms of the larger jumbo accounts moving. But I would say that a couple of notable wins there. We saw a couple of wins in the 20,000 to 50,000 range. So, we’re really excited about the momentum in Carelon and what we’re doing strategically, and how that’s playing through in the marketplace.
Gail Boudreaux: Thank you, Pete. Our next question will be our last question.
Operator: For our final question, we’ll go to the line of George Hill from Deutsche Bank. Please go ahead.
George Hill: Yes, good morning guys and thanks for squeezing me in after Dave. I’m going to come back to MA margins one more time. And I’m going to ask you if you could expand a little bit if there is a way to disaggregate kind of the MA margin expansion thinking about your pricing initiatives versus utilization expectation versus mix, and kind of the market exits that you guys have targeted. Just trying to figure if you can kind of maybe rank order the contribution on margin expansion in MA from each of those four initiatives?
Mark Kaye: Thanks very much for the question, George. We are not looking to necessarily provide individual margin guidance within the Health Benefit segment. Certainly, we feel comfortable with where we’re guiding to in aggregate for 2024 in the 25 to 50 basis point range. And we think that the qualitative commentary that, we provided in the call today should give you enough to get a feel for how the management team is thinking about this. Given this is my first earnings call, I just want to spend a minute on capital deployment before we close out here. And I just wanted to make the point that, I expect to continue with Elevance Health’s existing strategic policy around capital deployment. As I believe it really strikes the right balance between growth, and the return of capital to our stockholders.
And just as a reminder, we are going to target 50% of our free cash flow towards M&A, or organic reinvestment and approximately 50% is a return of capital to our stockholders, either via the 30% for share repurchases, or the 20% for dividends. And each year may differ. But over the years, we expect to allocate capital consistent with this framework.
Gail Boudreaux: Thank you, Mark, and thank you to everyone who joined us. In closing, we’re pleased to have delivered another strong year in 2023, and we’re confident that the ongoing execution of our strategy and the balance and resilience of our diverse set of businesses positions us well for 2024 and beyond. We’re very excited about our future, and we look forward to sharing more on our progress with you in the coming year. Thank you again for your interest in Elevance Health, and have a great rest of your week.
Operator: Ladies and gentlemen, a recording of this conference will be available for replay after 11:00 a.m. today through February 23, 2024. You may access the replay system at any time by dialing 800-568-3942. International participants can dial 203-369-3812. This concludes our conference for today. Thank you for your participation and for using Verizon conferencing. You may now disconnect.
