AI interpretation based on checked source excerpts. Issuer assertions and evidence limitations remain explicit.
Policy quality-scores-3: six equally weighted categories. The overall score requires full coverage. Missing inputs are not zero. Qualitative grades are sourced interpretations, not probabilities. 5/6 · 28/10/2026
Moat44
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
structural advantage · 3/4 · Territorial brand licenses and their actual deployment across numerous states establish a differentiated franchise. Multi-year provider contracting supports established operations. The claimed competitive unit-cost position lacks a supplied comparative demonstration, so the grade rests primarily on contractual intangible assets rather than a separately proven cost advantage.
durability · 2/4 · Licensing and multi-year provider arrangements support persistence, but the licenses impose continuing obligations and are not uniformly exclusive. Second-Blue bidding rights for specified national employers already dilute territorial protection. The supplied terms support a bounded advantage without establishing exceptional duration or immunity from competitive erosion.
customer dependency · 1/4 · Sydney Health engagement demonstrates use, while substantial medical membership demonstrates reach. Neither establishes material switching friction. Actual membership decline and a partially terminated external care-delivery contract indicate contestable demand, although the passages do not establish that all attrition resulted from dissatisfaction or competitive displacement.
erosion resilience · 1/4 · Premium increases did not prevent nine-month Health Benefits operating-gain deterioration under medical-cost and expense pressure. Carelon improvements provide a demonstrated offset, but broader Blue bidding weakens protection and enacted pharmacy reform adds prospective pressure. The record shows fragile group-wide protection despite areas of recovery.
Pricing power38
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
realized pricing · 2/4 · Nine-month Health Benefits results explicitly attribute higher premium yields to premium increases across all lines, distinguishing price from membership effects. This establishes realized repricing. Medical-cost pressure, attrition and declining operating gain limit evidence that those increases capture durable economic value beyond recovering higher claims costs.
retention · 2/4 · Approximately 44.9 million medical members, Commercial fee-based membership growth and substantial digital engagement support repeat demand indirectly. Annual membership decline and an external contract partial termination offset those strengths. No retention rate is inferred, and disclosed Medicare repositioning and Medicaid attrition prevent treating every membership loss as competitive failure.
margin resilience · 1/4 · Higher premium yields coexisted with lower nine-month Health Benefits operating gain and an elevated benefit expense ratio. CarelonRx profitability and Carelon Services performance improved, providing partial protection. Third-quarter EPS also includes a non-operating benefit, so it cannot independently demonstrate resilient underlying underwriting or pricing economics.
contractual freedom · 1/4 · Certain premium rates require state approval, while Medicare and Medicaid pricing can lag healthcare costs. CarelonRx possesses disclosed prescription-pricing discretion, but enacted rebate-remittance reforms constrain future economics. These are meaningful limits on terms and pricing freedom, despite the demonstrated ability to obtain premium increases.
Predictability100
Financial-sector stability over 5 consecutive reported annual periods: equal weights for nondeclining revenue frequency, revenue-growth volatility (5–40pp), positive consolidated earnings frequency, and net-income/revenue margin volatility (3–20pp). Uses reported accounting scope; not industrial FCF or a growth forecast.
- Nondeclining revenue years (%)
- 100.00
- Revenue growth volatility (pp)
- 3.85
- positiveEarningsShare
- 100.00
- netMarginStdDev
- 0.52
- observedAnnualPeriods
- 5.00
Financial strength—
Insufficient current sector evidence for every criterion; no category score is inferred.
capital adequacy · — · The filing reports regulated subsidiaries exceeding mandatory requirements, but supplies neither a named control-level solvency ratio nor an actual supervisory capital finding. Required statutory RBC and the broader non-DMHC capital/surplus pool have different scopes. Their quotient cannot establish comparable capital sufficiency or headroom under the required standard.
liquidity funding · 2/4 · September parent cash and investments of approximately $2.4 billion and positive quarterly operating cash flow support funding capacity. June consolidated cash includes customer and restricted-purpose funds, while parent obligations depend on regulated subsidiary dividends. Available unrestricted facilities and a complete maturity profile are not quantified in the selected passages.
asset liability risk · 2/4 · The disclosed fixed-maturity portfolio is diversified with approximately A average quality, but June current-security credit-loss allowances increased from $21 million to $55 million. Actual medical-cost pressure and continuing ceded-policy liability demonstrate insurance exposure. Missing reserve-development, reinsurance-recoverability and duration detail limits assessment of matching and tail risks.
earnings resilience · 2/4 · GAAP shareholder earnings remained positive through 2025, and first-half 2026 consolidated net income remained positive despite declining year over year. Third-quarter Carelon improvements add support, but the risk-adjustment accrual, Health Benefits pressure and material non-operating EPS benefit prevent interpreting the latest earnings improvement as uniformly resilient operating performance.
Capital allocation56
Qualitative insurance assessment: equal-weight average of four current evidence-backed grades (0–4), scaled to 100. Policy financial-industry-1; not an industrial ratio score or credit rating.
capital efficiency · 2/4 · First-half consolidated net income of $3.214 billion divided by average beginning/end total equity of $44.524 billion implies approximately 7.2% for six months, without annualization. This GAAP consolidated measure includes noncontrolling interests and is not a statutory-capital return. Positive productivity is tempered by lower earnings and missing September equity.
distributions and buffers · 2/4 · First-half dividends of $749 million and repurchases of $1.358 billion were below consolidated net income of $3.214 billion. September parent cash and investments support a liquidity buffer. Subsidiary dividend restrictions and the absence of comparable numerical solvency headroom prevent a stronger judgment about distribution capacity under insurance stress.
dilution and cost · 3/4 · Nine-month diluted weighted-average shares declined to 218.6 million from 225.6 million. First-half share-based compensation fell to $130 million from $162 million, alongside actual net debt repayments. These outcomes demonstrate dilution control, although buyback valuation quality and optimal financing cost are not established by the supplied evidence.
investment discipline · 2/4 · Improved specialty-pharmacy and specialty/home-based care performance support some productive reinvestment, without isolating acquisition returns. Mosaic received $34 million of additional funding without equity, and lending receivables increased. Targeted technology spending also contributed to operating pressure; its intended benefits remain unproven. Outcomes therefore support a mixed assessment.
Management50
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
capital discipline · 2/4 · First-half operating cash generation supported distributions, capital spending and net debt repayments, although liability movements contributed materially. September parent liquidity provides additional support. Mosaic required funding without additional equity and increased lending exposure; the passages establish active capital management but mixed evidence of superior allocation outcomes.
incentive alignment · 2/4 · Actual ownership-guideline compliance, mandatory holding of profit shares until requirements are met and a clawback policy support alignment. However, the Committee approved increasing completed-period PSU payouts from 41.0% to 62.5% of target. That actual discretionary adjustment weakens mechanical pay-for-performance discipline; it is not merely a proposed award.
execution · 2/4 · Third-quarter Carelon operating gain rose 17%, and nine-month specialty and home-based services improved. The improved future-payment-year Stars mix is another achievement, not realized bonus revenue. Health Benefits deterioration, unfavorable contracts and the historical risk-adjustment exposure accrual keep the demonstrated execution record mixed.
governance · 2/4 · Eleven independent directors out of twelve, independent committees and externally facilitated evaluations support oversight. The classified board and approved upward PSU adjustment temper accountability. The risk-adjustment accrual warrants scrutiny but does not itself establish misconduct or prove oversight failure. Formal governance arrangements do not establish exceptional effectiveness.
Evidence
BCBSA Licenses
We are a party to license agreements with the BCBSA that entitle us to the exclusive, and in certain areas, non-exclusive, use of the Blue Cross and Blue Shield names and marks in assigned geographic territories.
2025 Form 10-K, filed 2026-02-06, business: BCBSA Licenses · Filed 06/02/2026
Although previously we did not have a right to sell products and services using the BCBS names and marks outside of our exclusive service areas, under the terms of the In re Blue Cross Blue Shield Antitrust Litigation subscriber settlement agreement and release (the “Subscriber Settlement Agreement”), some large national employers with self-funded plans (specifically identified in the Subscriber Settlement Agreement) have a right to request a second Blue plan bid in addition to a bid from the local Blue plan, effective as of September 2024.
2025 Form 10-K, filed 2026-02-06, BCBSA Licenses: second Blue bidding rights · Filed 06/02/2026
We are required to pay an annual license fee to the BCBSA based on enrollment and to comply with various requirements and restrictions regarding our operations and our use of the BCBS names and marks.
2025 Form 10-K, filed 2026-02-06, BCBSA license obligations · Filed 06/02/2026
Our provider networks give us a highly competitive unit cost position and provide distinctive service levels which allow us to offer a broad range of affordable health benefit products to our customers.
2025 Form 10-K, filed 2026-02-06, competition: issuer claim concerning provider-network costs · Filed 06/02/2026
In addition, the pharmacy industry is highly competitive, and CarelonRx is subject to competition from national, regional and local pharmacy service providers, insurers, health plans, large retail pharmacy chains, large retail stores, supermarkets, mail order pharmacies, web pharmacies and specialty pharmacies.
2025 Form 10-K, filed 2026-02-06, pharmacy competition categories · Filed 06/02/2026
In addition, Congress recently passed the Consolidated Appropriations Act of 2026, which includes pharmacy benefit manager reforms requiring pharmacy benefit managers to remit all rebates, fees (other than bona fide service fees), and other remuneration received from entities such as manufacturers and group purchasing organizations to commercial plan sponsors, and to provide detailed commercial claims reporting, effective thirty months after enactment.
2025 Form 10-K, filed 2026-02-06, enacted pharmacy benefit manager reforms and effective timing · Filed 06/02/2026
Across our markets, we deploy multi-year contracting strategies, including fixed rates and standard fee schedules, to enhance cost predictability, mitigate exposure to medical cost inflation, and establish long-term stability with providers.
2025 Form 10-K, filed 2026-02-06, multi-year provider contracting · Filed 06/02/2026
As of December 31, 2025 and 2024, all of our regulated subsidiaries exceeded the minimum applicable mandatory RBC requirements and/or capital and solvency requirements of their applicable governmental regulator.
2025 Form 10-K, filed 2026-02-06, statutory information: regulated-subsidiary compliance · Filed 06/02/2026
The statutory RBC necessary to satisfy regulatory requirements of our statutory basis insurance and HMO subsidiaries was approximately $9,100 as of December 31, 2025.
2025 Form 10-K, filed 2026-02-06, statutory RBC required at December 31, 2025 · Filed 06/02/2026
Statutory-basis capital and surplus of our insurance and HMO subsidiaries and capital and surplus of our other regulated subsidiaries, excluding the DMHC regulated entities, was $22,611 at December 31, 2025.
2025 Form 10-K, filed 2026-02-06, capital and surplus excluding DMHC-regulated entities · Filed 06/02/2026
Our ability to pay dividends and credit obligations is significantly dependent on receipt of dividends from our subsidiaries.
2025 Form 10-K, filed 2026-02-06, parent dependence on subsidiary dividends · Filed 06/02/2026
The payment of dividends to us by our insurance and HMO subsidiaries without prior approval of the insurance departments of each subsidiary’s domiciliary jurisdiction is limited by formula.
2025 Form 10-K, filed 2026-02-06, regulated-subsidiary dividend restrictions · Filed 06/02/2026
The result is a well-diversified portfolio of fixed maturity securities, with an average credit rating of approximately “A.”
2025 Form 10-K, filed 2026-02-06, fixed-maturity portfolio diversification and average credit quality · Filed 06/02/2026
We remain primarily liable to policyholders under ceded insurance contracts and are contingently liable for amounts recoverable from reinsurers in the event that such reinsurers do not meet their contractual obligations.
2025 Form 10-K, filed 2026-02-06, reinsurance: continuing policyholder liability and recoverability exposure · Filed 06/02/2026
We control a number of bank accounts that are used exclusively to hold customer funds for the administration of customer benefits, and we have cash and cash equivalents on deposit to meet certain regulatory and contractual requirements.
June 2026 Form 10-Q, filed 2026-07-15, cash accounting: customer funds and regulatory or contractual requirements · Filed 15/07/2026
Consolidated Balance Sheets June 30, 2026 December 31, 2025 (Unaudited) (In millions, except share and per share data) Assets Current assets: Cash and cash equivalents $ 10,232 $ 9,491 Fixed maturity securities (amortized cost of $25,962 and $25,773; allowance for credit losses of $55 and $21) 25,719 25,884 Equity securities 1,563 740 Premium receivables, net 10,991 10,073 Self-funded receivables, net 5,583 5,162 Other receivables 6,818 6,307 Other current assets 6,278 5,344 Total current assets 67,184 63,001 Long-term investments: Fixed maturity securities (amortized cost of $1,263 and $1,116; allowance for credit losses of $0 and $0) 1,259 1,121 Other invested assets 11,130 10,839 Property and equipment, net 4,645 4,679 Goodwill 28,339 28,344 Other intangible assets 10,983 11,200 Other noncurrent assets 2,898 2,310 Total assets $ 126,438 $ 121,494 Liabilities and equity Liabilities Current liabilities: Medical claims payable $ 18,463 $ 17,084 Other policyholder liabilities 3,463 3,632 Unearned income 1,640 1,493 Accounts payable and accrued expenses 6,632 7,322 Short-term borrowings — 150 Current portion of long-term debt 375 1,099 Other current liabilities 13,681 10,255 Total current liabilities 44,254 41,035 Long-term debt, less current portion 30,669 30,797 Deferred tax liabilities, net 2,206 2,110 Other noncurrent liabilities 4,287 3,526 Total liabilities 81,416 77,468 Commitments and contingencies – Note 10 Shareholders’ equity Preferred stock, without par value, shares authorized 100,000,000; shares issued and outstanding – none — — Common stock, par value $0.01, shares authorized 900,000,000; shares issued and outstanding – 216,841,146 and 220,723,898 2 2 Additional paid-in capital 8,917 8,938 Retained earnings 36,675 35,393 Accumulated other comprehensive loss (711) (451) Total shareholders’ equity 44,883 43,882 Noncontrolling interests 139 144 Total equity 45,022 44,026 Total liabilities and equity $ 126,438 $ 121,494 See accompanying notes.
June 2026 Form 10-Q, filed 2026-07-15, consolidated balance sheets; millions except share and per-share data · Filed 15/07/2026
Consolidated Statements of Cash Flows (Unaudited) Six Months Ended June 30 2026 2025 (In millions) Operating activities Net income $ 3,214 $ 3,928 Adjustments to reconcile net income to net cash provided by operating activities: Net losses on financial instruments 134 595 Equity in net earnings of other invested assets (567) (138) Depreciation and amortization 720 753 Deferred income taxes (123) (226) Impairment of property and equipment 37 — Share-based compensation 130 162 Changes in operating assets and liabilities: Receivables, net (1,831) (4,097) Other invested assets — (35) Other assets (1,441) (604) Policy liabilities 1,216 387 Unearned income 147 53 Accounts payable and other liabilities 4,124 1,690 Income taxes 488 603 Other, net (3) — Net cash provided by operating activities 6,245 3,071 Investing activities Purchases of investments (7,867) (8,102) Proceeds from sale of investments 6,070 7,683 Maturities, calls and redemptions from investments 984 748 Changes in securities lending collateral (142) (466) Purchases of subsidiaries, net of cash acquired 5 54 Purchases of property and equipment (522) (463) Other, net (11) (38) Net cash used in investing activities (1,483) (584) Financing activities Repayments of long-term borrowings (750) (1,250) Proceeds from short-term borrowings 825 — Repayments of short-term borrowings (975) (5) Changes in securities lending payable 142 466 Changes in bank overdrafts (1,181) 631 Repurchase and retirement of common stock (1,358) (1,258) Cash dividends (749) (771) Proceeds from issuance of common stock under employee stock plans 63 21 Taxes paid through withholding of common stock under employee stock plans (35) (40) Other, net 9 (11) Net cash used in financing activities (4,009) (2,217) Effect of foreign exchange rates on cash and cash equivalents (12) 2 Change in cash and cash equivalents 741 272 Cash and cash equivalents at beginning of period 9,491 8,288 Cash and cash equivalents at end of period $ 10,232 $ 8,560 See accompanying notes.
June 2026 Form 10-Q, filed 2026-07-15, consolidated cash flows for six months ended June 30; millions · Filed 15/07/2026
We serve our members as the Blue Cross licensee for California and as the Blue Cross and Blue Shield (“BCBS”) licensee for Colorado, Connecticut, Georgia, Indiana, Kentucky, Maine, Missouri (excluding 30 counties in the Kansas City area), Nevada, New Hampshire, New York (in the New York City metropolitan area and upstate New York), Ohio, Virginia (excluding the Northern Virginia suburbs of Washington, D.C.) and Wisconsin.
June 2026 Form 10-Q, filed 2026-07-15, actual Blue licensee operating territories · Filed 15/07/2026
Premium rates for certain lines of business are subject to approval by the Department of Insurance of each respective state.
June 2026 Form 10-Q, filed 2026-07-15, premium-rate approval requirements · Filed 15/07/2026
CarelonRx determines whether it is the principal based on its contractual rights to design and develop a listing of prescription drugs offered to the customer (formulary management); its control over establishing the pharmacy network available to the customer to have its prescription fulfilled (network management); and its discretion over establishing the pricing for prescription drugs.
June 2026 Form 10-Q, filed 2026-07-15, CarelonRx contractual control and prescription pricing discretion · Filed 15/07/2026
Pricing of the Medicare and Medicaid programs may not adequately reflect current underlying healthcare cost trends given the timing lag between when pricing is established and the start of the applicable contract, which could adversely affect our financial results.
June 2026 Form 10-Q, filed 2026-07-15, Medicare and Medicaid pricing timing risk · Filed 15/07/2026
•Fully independent Audit, Compensation and Talent, Finance and Governance Committees
•Annual Board, committee and individual director performance evaluations facilitated by an external party
2026 proxy, filed 2026-03-27, independent committees and externally facilitated evaluations · Filed 27/03/2026
•Independent Board – 11 of 12 directors are independent
2026 proxy, filed 2026-03-27, board independence · Filed 27/03/2026
•Commitment to declassify the Board if the Blue Cross and Blue Shield Association ("BCBSA") requirement for a classified board is no longer applicable
Stock Ownership / Compensation
•Significant director and executive stock ownership and holding requirements
2026 proxy, filed 2026-03-27, conditional board declassification and ownership requirements · Filed 27/03/2026
•Clawback policy for executive officers’ incentive compensation, including for reputational harm
2026 proxy, filed 2026-03-27, executive incentive clawback policy · Filed 27/03/2026
All covered participants must hold 100% of their profit shares (after-tax gain) from RSU and PSU vesting until their ownership requirement is met.
2026 proxy, filed 2026-03-27, executive profit-share holding requirement · Filed 27/03/2026
As of the date this Proxy Statement is filed with the SEC, each of our NEOs owns sufficient shares to meet his or her ownership requirement under the guidelines.
2026 proxy, filed 2026-03-27, actual NEO ownership-guideline compliance at filing · Filed 27/03/2026
Improve Accessibility Sydney Health, our digital engagement platform for health plan members, had approximately 20 million registered users in 2025, and nearly 50% of registered users engaged with Sydney Health in the fourth quarter of 2025.
2026 proxy, filed 2026-03-27, Sydney Health registrations and fourth-quarter 2025 engagement · Filed 27/03/2026
We also advanced quality performance, improving Payment Year 2027 Medicare Stars results to 59% of our Medicare Advantage members in 4+ Star plans as of January 1, 2026, up from 40% in the prior year.
2026 proxy, filed 2026-03-27, Payment Year 2027 Medicare Stars mix as of January 1, 2026 · Filed 27/03/2026
(In millions, except per share data) Year Ended December 31, 2025 Year Ended December 31, 2024 Year Ended December 31, 2023 Shareholders’ net income $ 5,662 $ 5,980 $ 5,987 Add / (Subtract): Net losses on financial instruments 653 445 694 Amortization of other intangible assets 628 580 885 Transaction and integration related costs 236 224 213 Business dispositions and related items 41 281 — Litigation and settlement expenses 24 692 (2) Gain on sale of business — (201) — Business optimization charges (38) 268 719 Tax impact of non-GAAP adjustments (402) (575) (628) Net adjustment items 1,142 1,714 1,881 Adjusted shareholders’ net income $ 6,804 $ 7,694 $ 7,868 Shareholders’ earnings per diluted share $ 25.21 $ 25.68 $ 25.22 Add / (Subtract): Net losses on financial instruments 2.91 1.91 2.92 Amortization of other intangible assets 2.80 2.49 3.73 Transaction and integration related costs 1.05 0.96 0.90 Business dispositions and related items 0.18 1.21 — Litigation and settlement expenses 0.11 2.97 (0.01) Gain on sale of business — (0.86) — Business optimization charges (0.17) 1.15 3.03 Tax impact of non-GAAP adjustments (1.79) (2.47) (2.65) Rounding Impact (0.01) — — Net adjustment items 5.08 7.36 7.92 Adjusted shareholders’ earnings per diluted share $ 30.29 $ 33.04 $ 33.14 Income before income tax expense $ 6,710 $ 7,904 $ 7,715 Net investment income (2,194) (2,051) (1,825) Gain on sale of business — (201) — Net losses on financial instruments 653 445 694 Interest expense 1,402 1,185 1,030 Amortization of other intangible assets 628 580 885 Reportable segments operating gain $ 7,199 $ 7,862 $ 8,499 2026 Proxy Statement 84 Table of Contents Corporate Impact Recognitions & Ratings We were included in Fortune’s 2025 “100 Best Companies to Work For” list and Fortune's "Best Workplaces in Health Care 2025," ranking second in the large company category.
2026 proxy, filed 2026-03-27, 2023–2025 GAAP earnings and operating-gain reconciliation; millions except per-share data · Filed 27/03/2026
Accordingly, the Committee approved an increase to the PSU awards above the percentage calculated using the as-reported results for the performance measures from 41.0% of target to 62.5% of target.
2026 proxy, filed 2026-03-27, approved upward adjustment to completed-period PSU payout · Filed 27/03/2026
Net amounts receivable under these arrangements were $188 for the term loan and $188 for line of credit borrowings at September 30, 2026 and $188 for the term loan and $94 for line of credit borrowings at December 31, 2025, which are included under the caption “Other invested assets” in our consolidated balance sheets.
September 2026 Form 10-Q, filed 2026-10-21, Mosaic term-loan and line-of-credit receivables · Filed 21/10/2026
In addition to the term loan and line of credit, we committed to providing $70 of additional funding with no additional equity interest in Mosaic Health to meet any shortfall in operating cash flow and regulatory capital requirements of certain businesses that were contributed by us to Mosaic Health through December 31, 2026.
September 2026 Form 10-Q, filed 2026-10-21, Mosaic funding commitment without additional equity · Filed 21/10/2026
Additional funding of $0 and $34 was provided during the three and nine months ended September 30, 2026, respectively.
September 2026 Form 10-Q, filed 2026-10-21, actual Mosaic funding during three and nine months · Filed 21/10/2026
The denominator for basic and diluted shareholders' earnings per share for the three and nine months ended September 30, 2026 and 2025 is as follows:
Three Months Ended
September 30
Nine Months Ended
September 30
2026
2025
2026
2025
Denominator for basic shareholders' earnings per share – weighted-average shares
216.6
223.3
217.8
225.0
Effect of dilutive securities – employee stock options and non-vested restricted stock awards
1.0
0.4
0.8
0.6
Denominator for diluted shareholders' earnings per share
217.6
223.7
218.6
225.6
During the three months ended September 30, 2026 and 2025, weighted-average shares related to certain stock options of 1.6 and 2.2, respectively, were excluded from the denominator for diluted shareholders' earnings per share because the stock options were anti-dilutive.
September 2026 Form 10-Q, filed 2026-10-21, basic and diluted weighted-average share denominators · Filed 21/10/2026
Our benefit expense ratio increased primarily due to elevated medical cost trend in our Medicaid business, partially offset by improved performance in our Individual ACA and Medicare programs and decreases in Carelon Services benefit expense related to the partial termination and modification of a care delivery services contract with an unaffiliated customer.
September 2026 Form 10-Q, filed 2026-10-21, nine-month benefit-expense-ratio drivers · Filed 21/10/2026
Nine Months Ended September 30, 2026 Compared to the Nine Months Ended September 30, 2025
Health Benefits
Operating revenue increased primarily as a result of higher premium yields driven by premium increases in all of our lines of business, partially offset by deliberate repositioning in our Medicare Advantage business and Medicaid membership attrition.
September 2026 Form 10-Q, filed 2026-10-21, nine-month Health Benefits premium yields, repositioning and attrition · Filed 21/10/2026
Operating gain decreased primarily due to higher overall medical costs and increases in operating expenses primarily due to targeted investments to support and strengthen our workforce and accelerate technology adoption, partially offset by higher operating revenue.
September 2026 Form 10-Q, filed 2026-10-21, nine-month Health Benefits operating-gain decline · Filed 21/10/2026
The increase in operating gain was primarily driven by improved specialty pharmacy profitability and lower operating expenses, partially offset by normal timing variations in recognition of performance-related adjustments.
September 2026 Form 10-Q, filed 2026-10-21, nine-month CarelonRx operating-gain improvement and timing qualifier · Filed 21/10/2026
These increases were partially offset by decreases related to the partial termination and modification of a care delivery services contract with an unaffiliated customer.
September 2026 Form 10-Q, filed 2026-10-21, nine-month Carelon Services external contract partial termination and modification · Filed 21/10/2026
-46-
The increase in operating gain was primarily driven by the continued expansion and improved performance within our specialty care and home-based care services.
September 2026 Form 10-Q, filed 2026-10-21, nine-month Carelon Services gain improvement · Filed 21/10/2026
The increase was partially offset by less favorable results on certain contracts and lower health plan membership within our post-acute solutions services.
September 2026 Form 10-Q, filed 2026-10-21, Carelon Services less favorable contracts and lower membership · Filed 21/10/2026
•3Q 2026 diluted EPS1 of $6.27 and adjusted diluted EPS2 of $6.99; results reflect improved operating performance and a net non-operating benefit of $1.85 per share
Third-quarter 2026 earnings release, filed 2026-10-21, diluted EPS and non-operating benefit · Filed 21/10/2026
Operating cash flow of $1.3 billion in the quarter increased $0.1 billion relative to the prior year, primarily reflecting favorable working capital dynamics.
Third-quarter 2026 earnings release, filed 2026-10-21, quarterly operating cash flow and working-capital explanation · Filed 21/10/2026
As of September 30, 2026, cash and investments at the parent company totaled approximately $2.4 billion.
Third-quarter 2026 earnings release, filed 2026-10-21, September 30 parent-company cash and investments · Filed 21/10/2026
Medical membership of approximately 44.9 million as of September 30, 2026 decreased by 487 thousand compared to the prior year.
Third-quarter 2026 earnings release, filed 2026-10-21, September 30 medical membership and annual decline · Filed 21/10/2026
The decline reflected lower enrollment in our Medicaid, Medicare Advantage, and Employer Group risk-based businesses, partially offset by growth in Commercial fee-based membership.
Third-quarter 2026 earnings release, filed 2026-10-21, membership decline and Commercial fee-based growth · Filed 21/10/2026
Operating gain for Carelon totaled $0.9 billion, an increase of 17 percent year over year, reflecting strong performance of Carelon Services risk-based solutions and the improved profitability of our specialty pharmacy.
Third-quarter 2026 earnings release, filed 2026-10-21, Carelon quarterly operating gain and growth drivers · Filed 21/10/2026
Operating Gain for the nine months ended September 30, 2026 also included $935 million for the Company's current best estimate of the identified potential exposure for certain historical Medicare Advantage risk adjustment data related to the CMS notice to the Company dated February 27, 2026.
Third-quarter 2026 earnings release, filed 2026-10-21, nine-month $935 million historical risk-adjustment exposure accrual · Filed 21/10/2026
It does not include net investment income, net gains/losses on financial instruments, interest expense, amortization of other intangible assets, gains/losses on extinguishment of debt or income taxes, as these items are managed in a corporate shared service environment and are not the responsibility of operating segment management.
Third-quarter 2026 earnings release, filed 2026-10-21, operating-gain exclusions · Filed 21/10/2026
