What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-04-22 compared with 2025-10-21 · 154 added, 191 removed, 312 unchanged (53% of the section changed)

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References to the “states” include the District of Columbia and Puerto Rico, unless the context otherwise requires.

Results of operations, cost of care trends, investment yields and other measures for the three and nine months ended September 30, 2025 are not necessarily indicative of the results and trends that may be expected for the full year ending December 31, 2025, or any other period.

Results of operations, cost of care trends, investment yields and other measures for the three months ended March 31, 2026 are not necessarily indicative of the results and trends that may be expected for the full year ending December 31, 2026, or any other period.

Elevance Health is a health company with the purpose of improving the health of humanity.

We are one of the largest health insurers in the United States in terms of medical membership, serving approximately 45.4 million medical members through our affiliated health plans as of September 30, 2025.

We are an independent licensee of the Blue Cross and Blue Shield Association (“BCBSA”), an association of independent health benefit plans.

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Revenues from the Medicare and Medicaid programs are dependent, in whole or in part, upon annual funding from the federal government and/or applicable state governments.

Product pricing remains competitive.

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.

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We continue to participate in the Individual state- or federally-facilitated marketplaces (the “Public Exchange”) in nearly all of our Anthem Blue Cross and Anthem Blue Cross and Blue Shield service areas.

We have expanded into select service areas in Florida, Maryland, and Texas in 2025, using our Simply Healthcare and Wellpoint brands.

In 2025, we expanded our operations into select service areas in Florida, Maryland and Texas and in 2026, into Washington through our Simply Healthcare and Wellpoint brands.

Going forward, we expect the Public Exchange to be influenced by policy and regulatory changes, particularly around federal subsidies, compliance requirements, and market stability.

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The federal budget reconciliation legislation, known as the One Big Beautiful Bill Act (the “OBBBA”) was signed into law on July 4, 2025.

The OBBBA contains a variety of provisions that could impact our business and operations including:

changes to Medicaid renewal and eligibility rules, such as more frequent redeterminations for beneficiaries receiving coverage through the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act of 2010, as amended, (collectively, the “ACA”), and a requirement for certain adults made eligible under the ACA, to meet work or community engagement standards;

changes to federal requirements regarding Medicaid state directed payments and provider taxes, including taxes on managed care organizations;

delays in the implementation of Medicaid final regulations on certain eligibility and enrollment provisions;

application of cost sharing to certain services for adults made eligible under the ACA’s Medicaid expansion;

reduction of the allowable home equity asset threshold for members seeking eligibility for Medicaid long term care services;

authorization of the U.S.

Department of Health and Human Services (“HHS”) to approve certain state home and community-based services waivers;

elimination of the repayment limit for excess advanced premium tax credits under the ACA;

modification of the rules regarding Health Savings Account eligible plans under the ACA and a permanent extension of the safe harbor first established under the Coronavirus Aid, Relief, and Economic Security Act, allowing pre-deductible coverage of telehealth services for HSA eligible high-deductible health plans;

and establishment of a new Rural Health Transformation program, among other provisions.

Additional federal and state guidance is being issued to implement these OBBBA provisions, most of which have effective dates in 2027 and 2028, although some states may look to implement certain of these provisions in 2026.

In addition, in June 2025, the Centers for Medicare and Medicaid Services (“CMS”) finalized the Marketplace Integrity and Affordability Regulation which modifies the ACA exchange open enrollment period beginning in plan year 2027 and eligibility for premium tax credits among other requirements.

The OBBBA includes provisions that could impact our business and operations including:

requiring more frequent Medicaid redeterminations for beneficiaries receiving coverage under a state ’ s Medicaid expansion program implemented pursuant to the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act of 2010, as amended, (collectively, the “ACA”);

and imposing work or community engagement requirements on certain adults in the ACA Medicaid expansion population.

The OBBBA also makes changes to federal requirements regarding Medicaid state directed payments and provider taxes, including taxes on managed care organizations;

delays implementation of Medicaid final regulations on certain eligibility and enrollment provisions;

reduces the allowable home equity asset threshold for individuals seeking eligibility for long-term care under Medicaid;

establishes a new Rural Health Transformation program;

eliminates the repayment limit for excess advanced Premium Tax Credits ( “ PTCs ” ) under the ACA;

modifies the rules regarding Health Savings Account ( “HSA” ) eligible plans under the ACA;

and makes permanent an extension of the safe harbor first established under the Coronavirus Aid, Relief, and Economic Security Act, allowing pre-deductible coverage of telehealth services for HSA eligible high-deductible health plans;

among other provisions.

Additional federal and state guidance is being issued to implement these OBBBA provisions.

Implementation dates vary, with many provisions impacting commercial plans effective January 1, 2026, and many Medicaid-related provisions effective in 2027 and 2028.

States may choose to implement certain Medicaid provisions as early as 2026.

In February 2026, Congress 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 30 months after enactment.

The legislation also imposes extensive reporting requirements and delinks pharmacy benefit manager compensation in Medicare Part D by prohibiting pharmacy benefit managers from receiving remuneration related to Part D drugs in any form other than bona fide service fees that cannot be based on a drug’s price, effective in 2028.

There continues to be the potential that similar or additional legislation may be adopted at the state or federal level.

In addition, in June 2025, the Centers for Medicare and Medicaid Services (“CMS”) finalized the Marketplace Integrity and Affordability Regulation, which modifies the Public Exchange open enrollment period beginning in plan year 2027 and eligibility for PTCs, among other requirements.

In September 2025, a federal court delayed the effective dates for several provisions of the Marketplace Integrity and Affordability Regulation pending the resolution of ongoing litigation challenging the legality of those provisions.

Also, in September 2025, CMS issued guidance modifying eligibility requirements for ACA catastrophic plans.

In September 2024, the HH S, the U.S.

Department of Labor, and the U.S Department of the Treasury (collectively, the “Tri-Agencies”) issued final regulations related to mental health parity that will require health plans to make administrative and operational changes to comply with these final regulations.

While some provisions became effective on January 1, 2025, additional guidance from the Tri-Agencies will be necessary to assess the full impact of these regulations on our operations and financial results.

Litigation has been filed by third parties challenging these final regulations.

The Consolidated Appropriations Act of 2023 decoupled Medicaid eligibility redeterminations from the COVID-19 Public Health Emergency initially declared in January 2020.

In September 2024, the U.S.

Department of Health and Human Services , the U.S.

Department of Labor, and the U.S.

Department of the Treasury (collectively, the “Tri-Agencies”) issued final regulations related to mental health parity that will require health plans to make administrative and operational changes to comply with these final regulations.

While some provisions became effective on January 1, 2025, additional guidance from the Tri-Agencies is necessary to assess the full impact of these regulations on our operations and financial results.

Litigation has been filed challenging the final regulations.

The Consolidated Appropriations Act of 2023 separated Medicaid eligibility redeterminations from the COVID-19 Public Health Emergency initially declared in January 2020.

As a result, states were permitted to begin removing ineligible beneficiaries from their Medicaid programs starting April 1, 2023, and the majority of our Medicaid markets began doing so as of June 30, 2023.

Although most states have completed this process, CMS has provided that states have until December 31, 2025 to complete these eligibility redeterminations.

The Inflation Reduction Act of 2022 (“IRA”) contains a variety of provisions that have impacted, and continue to impact, our business, including by extending the American Rescue Plan Act of 2021’s enhanced Premium Tax Credits (“PTC”) through 2025;

CMS required states to complete Medicaid eligibility redeterminations by December 31, 2025.

In addition, subsequent budget reconciliation legislation enacted during 2023 through 2025 included provisions affecting Medicaid eligibility enrollment and program financing, which may influence state Medicaid policies and beneficiary coverage dynamics over time.

The Inflation Reduction Act of 2022 (“IRA”) includes several provisions that have impacted, and continue to impact, our business.

These provisions include extending the American Rescue Plan Act of 2021’s enhanced PTCs through 2025;

imposing a new corporate alternative minimum tax;

providing a one percent excise tax on repurchases of stock;

allowing CMS to negotiate prices on a limited set of prescription drugs in Medicare effective in 2026;

establishing a one percent excise tax on repurchases of stock by issuers;

authorizing CMS to negotiate prices on a limited set of Medicare prescription drugs beginning in 2026;

instituting caps on insulin cost sharing in Medicare;

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and delaying the implementation of the Trump Administration Medicare drug rebate rule until at least 2032.

The extension of the enhanced PTC has allowed for growth in Individual Public Exchange enrollment and has supported continuity of coverage since Medicaid eligibility redeterminations resumed in 2023.

If Congress does not act to extend the enhanced PTC, they will expire at the end of 2025, which could have a material adverse effect on our business and results of operations.

From 2021 to 2025, Individual market enrollment grew significantly, driven in part by enhanced PTCs, which reduced Public Exchange coverage premiums for individuals who qualified.

This, in combination with lower membership effectuation rates, particularly in geographies with high concentrations of highly subsidized members, have driven a market-wide increase in morbidity, resulting in elevated medical cost trends.

The enhanced PTCs expired on December 31, 2025.

As a result, the cost of Public Exchange coverage premiums has increased for those individuals previously receiving the enhanced PTCs, which may negatively impact our Individual market enrollment.

The ACA continues to impact our business and results of operations, including pricing, minimum medical loss ratios, and the geographies in which our products are available.

We also expect further and ongoing regulatory guidance on a number of issues related to Medicare, including evolving methodology for ratings and quality bonus payments.

CMS also frequently proposes changes to its program that audits data

submitted under the risk adjustment programs in ways that could increase financial recoveries from pla ns.

For example, in May 2025, CMS announced plans to substantially increase the scale and pace of Risk Adjustment Data Validation (“RADV”) audits of Medicare Advantage plans, which could adversely affect our financial condition and results of operations.

CMS also frequently proposes changes to its program that audits data submitted under the risk adjustment programs in ways that could increase financial recoveries from pla ns.

For example, in May 2025, CMS announced plans to substantially increase the scale and pace of Risk Adjustment Data Validation (“RADV”) audits of Medicare Advantage plans.

The outcome of RADV audits could adversely affect our financial condition and results of operations.

For additional discussion regarding regulatory trends and uncertainties, and risk factors that could cause actual results to differ materially from those contained in forward-looking statements, see Part I, Item 1, “Business – Regulation,” Part I, Item 1A, “Risk Factors” and the “Regulatory Trends and Uncertainties” section of Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our 2025 Annual Report on Form 10-K.

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Business and Operational Matters

In the first quarter of 2026, based on a strategic review of our operations, assets and investments, management implemented the 2026 - 2027 Operating Model Transformation Program (the “Transformation Program”) to streamline decision-making, simplify organizational structures, and enhance the use of advanced technologies, including artificial intelligence, across the enterprise.

The Transformation Program includes initiatives to reduce organizational layers, realign roles and responsibilities, and design workflows to support more efficient, technology-enabled operations.

These actions also include the modernization of certain information technology platforms, targeted workforce reductions and role realignments.

Actions to be taken under the Transformation Program were ongoing as of March 31, 2026.

Pursuant to CMS’ Medicare Advantage Star Ratings system, CMS annually awards between 1.0 and 5.0 Stars to Medicare Advantage plans based on performance in several categories.

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CMS released our 2026 Star Ratings in October 2025, which will be used to determine our Medicare Advantage bonus payments in 2027.

Our 2026 Star Ratings reflect that approximately 55% of our Medicare Advantage members are enrolled in plans rated at least 4.0 Stars or higher.

Business Acquisitions

Investments in Joint Ventures and Completed Acquisitions

On December 31, 2024, we completed our acquisition of Centers Plan for Healthy Living LLC and Centers for Specialty Care Group IPA, LLC (“Centers”).

Centers is a managed long-term care plan that serves New York state Medicaid and dual-eligible Medicaid/Medicare members, enabling adults with long-term care needs and disabilities to live safely and independently in their own home.

This acquisition aligns with our strategic plan to grow the Health Benefits segment and leverage industry-leading expertise while serving Medicaid and dual-eligible Medicaid/Medicare populations.

Measurement period adjustments during the three months ended September 30, 2025 included a $(39) reduction to goodwill, and a $39 addition to tangible net assets acquired.

On August 6, 2024, we made an equity investment of $2,580 that resulted in our minority interest ownership of approximately 35% of Augusta Topco Holdings, L.P.

(“Mosaic Health”), a joint venture with Clayton, Dubilier & Rice (“CD&R”) that is designed to accelerate innovation in care delivery across multiple regions in the United States by bringing together certain care delivery and enablement assets of Carelon Management Services Inc (“CMSI Assets”), a Carelon Health business, and two CD&R portfolio businesses, apree health and Millennium Physician Group.

Our additional contribution of the CMSI Assets to Mosaic Health was completed on January 1, 2025, for which we received an additional $300 of equity (approximately 5% ownership) in Mosaic Health.

For additional information, see Note 3, “Business Acquisitions”, Note 5, “Investments”, and Note 6, “Derivative Financial Instruments” of the Notes to Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Our 2026 Star Ratings reflect that approximately 59% of our Medicare Advantage members are enrolled in plans rated at least 4.0 Stars or higher, or the equivalent.

As previously communicated, on February 27, 2026, the Company was notified by the Centers for Medicare & Medicaid Services (“CMS”) of its intent to impose intermediate sanctions on the Company based on alleged noncompliance by the Company with certain Medicare Advantage risk adjustment data submission requirements related to diagnosis codes previously disclosed to CMS.

On March 13, 2026, CMS notified the Company that it was granting the Company’s request for an extension of the effective date of the sanctions from March 31, 2026 to May 30, 2026 and also removed certain of the Company’s MA-PD plans from the threatened sanctions and granted a waiver for various Employee Group Waiver Plans.

CMS subsequently modified the compliance timeline.

The Company now has until July 31, 2026 to complete a series of steps required by the agency to avoid sanctions.

While the Company is working with CMS to complete these steps to reach a resolution that avoids the imposition of sanctions or other remedies, there can be no assurance that such a resolution can be achieved.

The Company is also currently contesting CMS’ action through an administrative process.

Litigation Matters

We are a defendant in multiple lawsuits that were initially filed in 2012 against the BCBSA and Blue Cross and/or Blue Shield licensees (the “Blue plans”) across the country.

Cases filed in 28 states were consolidated into a single, multi-district proceeding captioned In re Blue Cross Blue Shield Antitrust Litigation (“BCBSA Litigation”) that is pending before the U.S.

We have been a defendant in multiple lawsuits that were initially filed in 2012 against the BCBSA and Blue Cross and/or Blue Shield licensees (the “Blue plans”) across the country.

These cases have been consolidated into a single, multi-district proceeding captioned In re Blue Cross Blue Shield Antitrust Litigation (“BCBSA Litigation”) that is pending before the U.S.

District Court for the Northern District of Alabama (the “Court”).

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The cases were brought by two nationwide classes of plaintiffs, health plan subscribers and providers.

The BCBSA and Blue plans approved a settlement agreement and release with the subscriber plaintiffs (the “Subscriber Settlement Agreement”), and the ultimate amount paid by the Company under the Subscriber Settlement Agreement was

$604, which was primarily accrued in 2020.

The BCBSA and Blue plans approved a settlement agreement and release with the subscriber plaintiffs (the “Subscriber Settlement Agreement”), which received final approval from the Court in September 2022.

The ultimate amount paid by the Company under the Subscriber Settlement Agreement was $604, which was primarily accrued in 2020.

The Subscriber Settlement Agreement and the defendants’ payment and non-monetary obligations under the Subscriber Settlement Agreement became effective in June 2024 with the request for the second Blue plan bid provision effective in September 2024.

The funds held in escrow will be distributed in accordance with the Subscriber Settlement Agreement.

A number of follow-on cases involving entities that opted out of the Subscriber Settlement Agreement have been filed.

The BCBSA and the Blue plans approved a settlement agreement and release (the “Provider Settlement Agreement”) with the provider plaintiffs, and in October 2024, the provider plaintiffs filed a motion for preliminary approval with the Court.

The Court granted preliminary approval of the Provider Settlement Agreement on December 4, 2024 .

The Court granted preliminary approval of the Provider Settlement Agreement in December 2024 .

A Final Fairness Hearing was held in July 202 5, and the Court issued a Final Approval Order for the Provider Settlement Agreement in August 2025.

The Provider Settlement Agreement requires the defendants to make a monetary settlement payment no later than September 18, 2025.

Our portion of the monetary settlement payment of $666 has been paid.

The Provider Settlement Agreement also requires that certain non-monetary terms including (i) expansion of certain opportunities to contract with providers in contiguous service areas, (ii) certain prompt pay commitments, and (iii) various technological enhancements to the BlueCard program, be implemented on a timeline set forth in the Provider Settlement Agreement.

The Provider Settlement Agreement required the defendants to make a monetary settlement payment and also required that certain non-monetary terms including (i) expansion of certain opportunities to contract with providers in contiguous service areas, (ii) certain prompt pay commitments, and (iii) various technological enhancements to the BlueCard program, be implemented on a timeline set forth in the Provider Settlement Agreement.

The effective date of the Provider Settlement Agreement was September 19, 2025.

We recognized our payment obligation under the Provider Settlement Agreement of $666 in September 2024.

A number of follow-on cases involving entities that opted out of the putative Provider Settlement Agreement have been filed.

A number of follow-on cases involving entities that opted out of the Provider Settlement Agreement have been filed and have been centralized in the BCBSA Litigation multi-district proceeding.

For additional information regarding the BCBSA Litigation, see Note 10, “Commitments and Contingencies – Litigation and Regulatory Proceedings – Blue Cross Blue Shield Antitrust Litigation ,” of the Notes to Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Selected Operating Performance

For the twelve months ended September 30, 2025, total medical membership declined by 0.9%.

This was primarily driven by decreases in our BlueCard ® business and attrition in Medicaid membership, primarily as a result of eligibility redeterminations.

These decreases were partially offset by increases in our Medicare Advantage business.

Operating revenue for the three months ended September 30, 2025 was $50,087, an increase of $5,368, or 12.0%, from the three months ended September 30, 2024.

Operating revenue for the nine months ended September 30, 2025 was $148,273, an increase of $18,058, or 13.9%, from the nine months ended September 30, 2024.

The increases for both the three and nine months ended September 30, 2025 were primarily a result of premium rate increases in our Health Benefits segment in recognition of medical cost trends, recent acquisitions, and growth in our Medicare Advantage business, partially offset by Medicaid membership attrition.

Net income for the three months ended September 30, 2025 was $1,187, an increase of $179, or 17.8%, from the three months ended September 30, 2024.

Net income for the nine months ended September 30, 2025 was $5,115, a decrease of $443, or 8.0%, from the nine months ended September 30, 2024.

The increase in net income for the three months ended September 30, 2025 was primarily due to decreased losses on financial instruments and decreased income tax expense.

The increase was partially offset by higher amortization of other intangible assets and higher interest expense.

The decrease in net income for the nine months ended September 30, 2025 was primarily due to decreased operating gain within our Health Benefits segment and increased net losses on financial instruments.

The decrease was partially offset by increases in operating gain in our CarelonRx and Carelon Services businesses and decreased income tax expense.

Our fully-diluted shareholders’ earnings per share (“EPS”) was $5.32 for the three months ended September 30, 2025, which represented a 22.0% increase from EPS of $4.36 for the three months ended September 30, 2024.

Our EPS was $22.67 for the nine months ended September 30, 2025, which represented a 4.8% decrease from EPS of $23.81 for the nine months ended September 30, 2024.

The increase in EPS for the three months ended September 30, 2025 resulted primarily from increased shareholders' net income and the impact of fewer diluted shares outstanding.

The decrease in EPS for the nine months ended September 30, 2025 resulted primarily from decreased shareholders' net income, partially offset by the impact of fewer diluted shares outstanding.

Operating cash flow for the nine months ended September 30, 2025 and 2024 was $4,206 and $5,102, respectively.

The decrease in net cash provided by operating activities was primarily due to the Provider Settlement Agreement payment made in September 2025 and lower net income for the nine months ended September 30, 2025.

For the twelve months ended March 31, 2026, total medical membership declined by 0.9%.

This was primarily driven by attrition in Medicaid membership, primarily as a result of eligibility redeterminations, and decreases in our Medicare Advantage, Employer Group Risk-Based and FEP ® businesses.

These decreases were partially offset by increases in our Employer Group Fee-Based business.

Operating revenue for the three months ended March 31, 2026 was $49,494, an increase of $729, or 1.5%, from the three months ended March 31, 2025.

The increase for the three months ended March 31, 2026 was primarily a result of premium rate increases in our Health Benefits segment in recognition of medical cost trends and growth in CarelonRx product revenues, partially offset by membership attrition.

Shareholders' net income for the three months ended March 31, 2026 was $1,764, a decrease of $419, or 19.2%, from the three months ended March 31, 2025.

The decrease in net income for the three months ended March 31, 2026 was primarily due to decreased operating gain in all lines of business and increased interest expense.

These decreases were partially offset

by decreased net losses on financial instruments, increased net investment income, decreased income tax expense and decreased amortization of other intangible assets.

Our fully-diluted shareholders’ earnings per share (“EPS”) was $8.00 for the three months ended March 31, 2026, which represented a 16.8% decrease from EPS of $9.61 for the three months ended March 31, 2025.

The decrease in EPS for the three months ended March 31, 2026 resulted primarily from decreased shareholders' net income, partially offset by the impact of fewer diluted shares outstanding.

Operating cash flow for the three months ended March 31, 2026 and 2025 was $4,332 and $1,017, respectively.

The increase in net cash provided by operating activities was primarily due to favorable working capital impacts.

Membership and Other Metrics

The following table presents our medical membership by customer type as of September 30, 2025 and 2024.

The following table presents our medical membership by customer type as of March 31, 2026 and 2025.

Also included below is other membership by product and other metrics.

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Medical Membership

The decrease in medical membership was primarily driven by decreases in our BlueCard ® business and attrition in Medicaid membership, including as a result of eligibility redeterminations.

These decreases were partially offset by increases in our Medicare Advantage business.

The decrease in medical membership was primarily driven by attrition in Medicaid membership, primarily as a result of eligibility redeterminations, and decreases in our Medicare Advantage, Employer Group Risk-Based and FEP ® businesses.

These decreases were partially offset by increases in our Employer Group Fee-Based business.

Other Membership

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Dental membership increased primarily due to favorable sales in our Employer Group business.

Dental administration membership increased primarily due to favorable in-

group change with other BCBSA plans associated with FEP ® .

Vision membership increased due to higher sales in our Employer Group, Medicare Advantage, and Individual health plans.

Dental Administration membership decreased primarily due to unfavorable in-group change within other BCBSA plans.

Vision membership increased due to higher sales in our Medicaid, Employer Group and Individual health plans, partially offset by lower sales in our Medicare business.

Consolidated Results of Operations

Our consolidated summarized results of operations and other financial information for the three and nine months ended September 30, 2025 and 2024 are as follows:

Our consolidated summarized results of operations and other financial information for the three months ended March 31, 2026 and 2025 are as follows:

Three Months Ended

September 30 Nine Months Ended

September 30 Change

March 31 Change

Three Months Ended

Nine Months Ended September 30

2024 2025 vs.

2026 2025 $ %

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Net losses on financial instruments (78) (464) 386 83.2 %

Gain (loss) on sale of business

— (39) — 201 39 100.0 % 201 (100.0) %

Total revenues 50,181 48,891 1,290 2.6 %

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Net income 1,760 2,184 (424) (19.4) %

Net loss attributable to noncontrolling interests

2 8 — 4 (6) NM (4) NM

Net loss (gain) attributable to noncontrolling interests

Shareholders’ net income $ 1,764 $ 2,183 $ (419) (19.2) %

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2 Benefit expense ratio represents benefit expense as a percentage of premium revenue.

Premiums for the three months ended September 30, 2025 and 2024 were $41,791 and $36,809, respectively.

Premiums for the nine months ended September 30, 2025 and 2024 were $123,949 and $107,921, respectively.

Premiums for the three months ended March 31, 2026 and 2025 were $41,024 and $40,887, respectively.

3 bp = basis point;

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4 Operating expense ratio represents operating expense as a percentage of total operating revenue.

Three Months Ended September 30, 2025 Compared to the Three Months Ended September 30, 2024

Total operating revenue increased primarily as a result of premium rate increases in our Health Benefits segment in recognition of medical cost trends, recent acquisitions, and growth in our Medicare Advantage business, partially offset by Medicaid membership attrition.

Net investment income increased primarily due to higher income from alternative investments, partially offset by lower income from fixed maturity securities.

Net losses on financial instruments decreased due to higher income from fixed maturities and lower impairments on other invested assets.

Benefit expense increased primarily due to higher medical cost trends across all lines of business within our Health Benefits and Carelon Services segments.

Our benefit expense ratio increased primarily as a result of higher cost trend in Medicare, given pronounced Part D seasonality related to the IRA, and Commercial inclusive of Individual and Small Group ACA plans (“Affordable Care Act health plans”).

Cost of products sold reflects the cost of pharmaceuticals dispensed by CarelonRx for our unaffiliated pharmacy customers.

Cost of products sold increased as a result of higher script volume and utilization.

Our operating expense ratio decreased primarily due to operating leverage associated with growth in operating revenue.

Other expense increased primarily due to higher interest expense related to our issuance of senior notes during the fourth quarter of 2024.

The increase also reflects higher amortization expense due to intangible assets acquired in the fourth quarter of 2024.

Our effective tax rate decreased primarily due to the impact of the certain investment credits and the non-recurrence of a prior year uncertain tax position recognized during the three months ended September 30, 2024.

Our shareholders’ net income as a percentage of total revenues increased in the three months ended September 30, 2025 as compared to the three months ended September 30, 2024 as a result of all factors discussed above.

Nine Months Ended September 30, 2025 Compared to the Nine Months Ended September 30, 2024

Three Months Ended March 31, 2026 Compared to the Three Months Ended March 31, 2025

Total operating revenue increased primarily as a result of premium rate increases in our Health Benefits segment in recognition of medical cost trends and growth in CarelonRx product revenues, partially offset by membership attrition.

Net investment income increased primarily due to higher income from alternative investments, partially offset by lower income from fixed maturity securities.

Net losses on financial instruments increased due to higher losses on other invested assets, partially offset by lower losses from fixed maturity securities sales.

Benefit expense increased primarily due to higher medical cost trend across all lines of business within our Health Benefits and Carelon Services segments, partially offset by a favorable out-of-period settlement from a value-based care provider.

Our benefit expense ratio increased primarily as a result of higher medical cost trend in our Medicare Advantage and Medicaid businesses and Affordable Care Act health plans.

Net losses on financial instruments decreased due to lower impairment on other invested assets and lower realized losses on sales of financial instruments.

Benefit expense increased primarily due to higher medical costs across all lines of business within our Health Benefits segment, with the exception of Medicare.

These increases were partially offset by decreases in Carelon Services benefit expense related to the partial termination and modification of a care delivery services contract with an unaffiliated customer.

Our benefit expense ratio increased primarily as a result of expected elevated medical cost trend in our Medicaid business, partially offset by improved performance in Medicare Advantage.

Cost of products sold reflects the cost of pharmaceuticals dispensed by CarelonRx for our unaffiliated pharmacy customers.

Cost of products sold increased as a result of higher script volume and utilization.

Operating expense increased primarily due to increases in premium tax expenses and assessments, partially offset by disciplined cost management.

Our operating expense ratio decreased primarily due to operating leverage associated with growth in operating revenue, partially offset by increases in premium tax expenses and assessments.

Other expense increased primarily due to higher interest expense related to our issuance of senior notes during the fourth quarter of 2024.

The increase also reflects higher amortization expense due to intangible assets acquired in the fourth quarter of 2024.

Our effective tax rate decreased primarily due to the impact of certain investment credits.

Our shareholders’ net income as a percentage of total revenues decreased in the nine months ended September 30, 2025 as compared to the nine months ended September 30, 2024 as a result of all factors discussed above.

Cost of products sold increased as a result of a higher cost per prescription in 2026, reflecting pricing impacts and product mix, despite lower adjusted prescription volumes.

Operating expense increased primarily due to the loss contingency accrual for our best estimate of the identified potential exposure for the resubmission of certain historical Medicare Advantage risk adjustment data and increased corporate expenses, primarily associated with the Operating Model Transformation Program.

Our operating expense ratio increased primarily due to the loss contingency accrual for our best estimate of the identified potential exposure for the resubmission of certain historical Medicare Advantage risk adjustment data and increased corporate expense, primarily associated with the Operating Model Transformation Program.

Other expense decreased primarily due to a decrease in amortization of other intangible assets due to assets being amortized under an accelerated depreciation method, which results in higher expense recognition in earlier periods and progressively lower amortization in later periods, partially offset by an increase in interest expense.

Our effective tax rate increased primarily due to an increase in our reserve for uncertain tax positions and a prior year favorable resolution of uncertain tax positions that did not recur in 2026.

Our shareholders’ net income as a percentage of total revenues decreased in the three months ended March 31, 2026 as compared to the three months ended March 31, 2025 as a result of all factors discussed above.

Reportable Segments Results of Operations

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Operating gain is calculated as total operating revenue less benefit expense, cost of products sold and operating expense.

It does not include net investment income, net losses on financial instruments, loss/gain on sale of business, interest expense, amortization of other intangible assets or income taxes, as these items are managed in our corporate shared service environment and are not the responsibility of operating segment management.

Operating margin is calculated as operating gain divided by operating revenue.

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For additional information, see Note 13, “Segment Information,” of the Notes to Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

The following table presents a summary of the reportable segment financial information for the three and nine months ended September 30, 2025 and 2024:

Nine Months Ended

The following table presents a summary of the reportable segment financial information for the three months ended March 31, 2026 and 2025:

Three Months Ended

September 30 Three Months Ended

Nine Months Ended

2024 Change 2025 vs.

March 31 Three Months Ended

2026 2025 $ %

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Operating Margin

Health Benefits 1.4 % 4.2 % 3.5 % 5.4 % (280) bp (190) bp

CarelonRx 5.1 % 6.8 % 5.3 % 6.3 % (170) bp (100) bp

Carelon Services 3.0 % 4.0 % 5.2 % 5.2 % (100) bp 0 bp

Total operating margin 2.6 % 3.1 % 4.6 % 5.5 % (50) bp (90) bp

Health Benefits 5.1 % 5.4 % (30) bp

CarelonRx 5.5 % 6.0 % (50) bp

Carelon Services 6.4 % 7.5 % (110) bp

Total operating margin 4.2 % 6.5 % (230) bp

bp = basis point;

one hundred basis points = 1%.

The following table summarizes the operating revenues for our Commercial, Medicare, Medicaid and FEP ® lines of business within our Health Benefits segment for the three and nine months ended September 30, 2025 and 2024:

The following table summarizes the operating revenues for our Commercial, Medicare, Medicaid and FEP ® lines of business within our Health Benefits segment for the three months ended March 31, 2026 and 2025:

Three Months Ended

September 30 Nine Months Ended

Three Months Ended

Nine Months Ended

2024 Change 2025 vs.

2026 2025 $ %

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3,981 3,630 351 9.7 %

Total operating revenue $ 42,246 $ 38,278 $ 125,259 $ 112,695 $ 3,968 10.4 % $ 12,564 11.1 %

1 Operating revenue within our Commercial line of business related to our Individual ACA plans was $2,358 and $2,082 for the three months ended September 30, 2025 and 2024, respectively, and $7,047 and $6,178 for the nine months ended September 30, 2025 and 2024, respectively.

Three Months Ended September 30, 2025 Compared to the Three Months Ended September 30, 2024

Health Benefits

Operating revenue increased primarily as a result of higher premium yields driven by premium rate increases in all of our lines of business in recognition of medical cost trends, recent acquisitions and growth in our Medicare Advantage membership, partially offset by lower Medicaid membership.

Operating gain decreased primarily as a result of higher medical cost trends and increased investments to support and strengthen our workforce and accelerate technology adoption, partially offset by higher revenue.

Operating revenue increased primarily due to higher prescription volume associated with growth in pharmacy membership and revenue related to recent acquisitions.

The decrease in operating gain was primarily driven by expenses associated with the expansion of dispensing services provided by CarelonRx.

Carelon Services

Operating revenue increased primarily due to the acquisition of CareBridge in December 2024 and the continued expansion of risk-based capabilities in our specialty care solutions and behavioral health services.

The increase in operating gain was primarily driven by the acquisition of CareBridge.

Corporate & Other

Operating revenue increased primarily due to higher affiliate revenues.

Operating loss decreased primarily due to a non-recurring accrual recorded during the three months ended September 30, 2024 for the Provider Settlement Agreement associated with the BCBSA Litigation and lower business optimization charges in the three months ended September 30, 2025.

Nine Months Ended September 30, 2025 Compared to the Nine Months Ended September 30, 2024

Total Health Benefits operating revenue

$ 42,490 $ 41,431 $ 1,059 2.6 %

1 Operating revenue within our Commercial line of business related to our Individual ACA plans was $2,540 and $2,361 for the three months ended March 31, 2026 and 2025, respectively.

Three Months Ended March 31, 2026 Compared to the Three Months Ended March 31, 2025

Health Benefits

Operating revenue increased primarily as a result of higher premium yields driven by premium rate increases in all of our lines of business in recognition of medical cost trends, recently closed acquisitions and growth in our Medicare Advantage membership, partially offset by lower Medicaid membership

Operating gain decreased primarily as a result of rates for Affordable Care Act health plans and Medicaid being inadequate to cover medical cost trends and increased investments to support and strengthen our workforce and accelerate technology adoption .

Operating revenue increased primarily due to higher prescription volume associated with growth in pharmacy membership and revenue related to recent acquisitions.

The increase in operating gain was primarily driven by the growth in product revenue, partially offset by expenses associated with the expansion of dispensing and specialty services provided by CarelonRx.

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.

Operating gain decreased primarily as a result of higher overall medical and operating costs, partially offset by higher operating revenue.

Operating revenue increased primarily due to higher average revenue per prescription, partially offset by a negative change in product mix and lower prescription volumes.

The decrease in operating gain was primarily driven by lower health plan membership and normal timing variations in the recognition of performance-related adjustments, partially offset by improved specialty pharmacy profitability and lower operating expenses.

Carelon Services

The increase in operating gain was primarily driven by improved performance in our post-acute care, specialty care solutions and behavioral health services, as well as the acquisition of CareBridge.

Operating revenue increased primarily due to the continued expansion of risk-based capabilities in our specialty care solutions and behavioral health services, partially offset by fewer post-acute solutions services provided as a result of lower Medicare membership.

The decrease in operating gain was primarily driven by lower health plan membership and seasonality related to the launch of risk-based capabilities in our specialty care solutions business, partially offset by improved performance in our behavioral health business.

Corporate & Other

Operating revenue increased primarily due to higher affiliate revenues.

Operating loss decreased primarily due to a non-recurring accrual recorded during the nine months ended September 30, 2024 for the Provider Settlement Agreement associated with the BCBSA Litigation and lower business optimization charges in the nine months ended September 30, 2024.

Operating revenue decreased primarily due to lower affiliate revenues.

Operating loss increased primarily due to increased unallocated corporate expenses, primarily associated with the loss contingency accrual for our best estimate of the identified potential exposure for the resubmission of certain historical Medicare Advantage risk adjustment data and Operating Model Transformation Program.

Critical Accounting Policies and Estimates

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We consider our most important accounting policies that require significant estimates and management judgment to be those policies with respect to liabilities for medical claims payable, goodwill and other intangible assets and investments.

Our accounting policies related to these items are discussed in our 2024 Annual Report on Form 10-K in Note 2, “Basis of Presentation and Significant Accounting Policies,” to our audited consolidated financial statements as of and for the year ended December 31, 2024, as well as in the “Critical Accounting Policies and Estimates” section of Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” As of September 30, 2025, our critical accounting policies and estimates have not changed from those described in our 2024 Annual Report on Form 10-K.

Our accounting policies related to these items are discussed in our 2025 Annual Report on Form 10-K in Note 2, “Basis of Presentation and Significant Accounting Policies,” to our audited consolidated financial statements as of and for the year ended December 31, 2025, as well as in the “Critical Accounting Policies and Estimates” section of Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” As of March 31, 2026, our critical accounting policies and estimates have not changed from those described in our 2025 Annual Report on Form 10-K.

We continually evaluate the accounting policies and estimates used to prepare the consolidated financial statements.

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Our accounting policies related to medical claims payable are discussed in the references cited above.

As of September 30, 2025, our critical accounting policies and estimates related to medical claims payable have not changed from those described in our 2024 Annual Report on Form 10-K.

For a reconciliation of the beginning and ending balance for medical claims payable for the nine months ended September 30, 2025 and 2024, see Note 9, “Medical Claims Payable,” of the Notes to Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

The following table provides a summary of the two key assumptions having the most significant impact on our incurred but not paid liability estimates for the nine months ended September 30, 2025 and 2024, which are the trend and completion factors.

As of March 31, 2026, our critical accounting policies and estimates related to medical claims payable have not changed from those described in our 2025 Annual Report on Form 10-K.

For a reconciliation of the beginning and ending balance for medical claims payable for the three months ended March 31, 2026 and 2025, see Note 8, “Medical Claims Payable,” of the Notes to Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

The following table provides a summary of the two key assumptions having the most significant impact on our incurred but not paid liability estimates for the three months ended March 31, 2026 and 2025, which are the trend and completion factors.

These two key assumptions can be influenced by utilization levels, unit costs, mix of business, benefit plan designs, provider reimbursement levels, processing system conversions and changes, claim inventory levels, claim processing patterns, claim submission patterns and operational changes resulting from business combinations.

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Changes in Key Assumptions

Nine Months Ended

Three Months Ended

Assumed trend factors $ 625 $ 164

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Total $ 1,124 $ 1,025

The favorable development recognized in the nine months ended September 30, 2025 resulted from trend factors in late 2024 developing more favorably than originally expected as well as a smaller contribution from faster than expected development of completion factors from the latter part of 2024.

The favorable development recognized in the nine months ended September 30, 2024 resulted from favorable development in the completion factors resulting from the latter part of 2023 developing faster than expected as well as trend factors in late 2023 developing more favorably than originally expected.

The ratio of current year medical claims paid as a percent of current year net medical claims incurred was 86.3% and 85.4% for the nine months ended September 30, 2025 and 2024, respectively.

This ratio serves as an indicator of claims processing speed whereby speed for claims payments was slightly faster during the nine months ended September 30, 2025 as compared to the nine months ended September 30, 2024.

The favorable development recognized in the three months ended March 31, 2026 resulted from trend factors in late 2025 developing more favorably than originally expected as well as from faster than expected development of completion factors from the latter part of 2025.

The ratio of current year medical claims paid as a percent of current year net medical claims incurred was 64.5% and 66.2% for the three months ended March 31, 2026 and 2025, respectively.

This ratio serves as an indicator of claims processing speed whereby speed for claims payments was slightly slower during the three months ended March 31, 2026 as compared to the three months ended March 31, 2025.

We calculate the percentage of prior year redundancies in the current period as a percent of prior year net medical claims payable less prior year redundancies in the current period in order to demonstrate the development of prior year reserves.

For the nine months ended September 30, 2025, this metric was 8.9%, which was mainly driven by favorable trend factor development at the end of 2024, with favorable completion factor development from 2024 also contributing.

For the nine months ended September 30, 2024, this metric was 11.3%, driven by both favorable completion factor development from 2023 and favorable trend factor development at the end of 2023.

For the three months ended March 31, 2026, this metric was 7.2%, which was mainly driven by both favorable completion factor

development from 2025 and favorable trend factor development at the end of 2025.

For the three months ended March 31, 2025, this metric was 7.1%, mainly driven by favorable completion factor development from 2024, with favorable trend development at the end of 2024 also contributing.

We calculate the percentage of prior year redundancies in the current period as a percent of prior year net incurred medical claims to indicate the percentage of redundancy included in the preceding year calculation of current year net incurred medical claims.

We believe this calculation supports the reasonableness of our prior year estimate of incurred medical claims and the consistency in our methodology.

For the nine months ended September 30, 2025, this metric was 1.0%, which was calculated using the redundancy of $1,266.

For the nine months ended September 30, 2024, the comparable metric was 1.3%, which was calculated using the redundancy of $1,610.

For the three months ended March 31, 2026, this metric was 0.8%, which was calculated using the redundancy of $1,124.

For the three months ended March 31, 2025, the comparable metric was also 0.8%, which was calculated using the redundancy of $1,025.

We believe these metrics demonstrate an appropriate and consistent level of reserve conservatism.

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Sources and Uses of Capital

Our cash receipts result primarily from premiums, product revenue, service fees, investment income, proceeds from the sale or maturity of our investment securities, proceeds from business divestitures, proceeds from borrowings and proceeds from the issuance of common stock under our employee stock plans.

Our cash receipts result primarily from premiums, product revenue, service fees, investment income, proceeds from the sale or maturity of our investment securities, proceeds from borrowings and proceeds from the issuance of common stock under our employee stock plans.

Cash disbursements result mainly from claims payments, operating expenses, taxes, purchases of investment securities, interest expense, payments on borrowings, acquisitions, capital expenditures, repurchases of our debt securities and common stock and the payment of cash dividends.

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For a more detailed overview of our liquidity and capital resources management, see the “ Introduction ” section included in the “Liquidity and Capital Resources” section of Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our 2025 Annual Report on Form 10-K.

For additional information regarding our sources and uses of capital during the three and nine months ended September 30, 2025, see Note 5, “Investments,” Note 6, “Derivative Financial Instruments,” Note 10, “Debt,” and Note 12, “Capital Stock – Use of Capital – Dividends and Stock Repurchase Program, ” of the Notes to Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

A summary of our major sources and uses of cash and cash equivalents for the nine months ended September 30, 2025 and 2024 is as follows:

Nine Months Ended

For additional information regarding our sources and uses of capital during the three months ended March 31, 2026, see Note 4, “Investments,” Note 5, “Derivative Financial Instruments,” Note 9, “Debt,” and Note 11, “Capital Stock – Use of Capital – Dividends and Stock Repurchase Program, ” of the Notes to Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

A summary of our major sources and uses of cash and cash equivalents for the three months ended March 31, 2026 and 2025 is as follows:

Three Months Ended

2026 2025 Change

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Net cash provided by operating activities $ 4,332 $ 1,017 $ 3,315

Proceeds from the sale of subsidiaries, net of cash sold — 399 (399)

Purchases of subsidiaries, net of cash acquired

Issuances of short- and long-term debt, net of repayments 659 1,915 (1,256)

Changes in securities lending payable 576 158 418

Proceeds from sales, maturities, calls and redemptions of investments, net of purchases — 610 (610)

Proceeds from issuance of common stock under employee stock plans 37 23 14

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Purchases of investments, net of proceeds from sales, maturities, calls and redemptions (1,089) — (1,089)

Purchases of subsidiaries, net of cash acquired — (1,124) 1,124

Repurchase and retirement of common stock (1,124) (880) (244)

Purchases of property and equipment (235) (196) (39)

Repayments of short- and long-term debt, net of issuances (176) (1,365) 1,189

Cash dividends (376) (386) 10

Changes in securities lending collateral (576) (160) (416)

Changes in bank overdrafts (1,152) — (1,152)

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Effect of foreign exchange rates on cash and cash equivalents (9) 1 (10)

Net increase in cash and cash equivalents

Net increase (decrease) in cash and cash equivalents

$ 166 $ (788) $ 954

Other significant sources of cash year-over-year included decreased purchases of investments, net of proceeds from sales, maturities, calls, and redemptions, lower amounts for purchases of subsidiaries, net of cash acquired, changes in bank overdrafts and decreased purchases of property and equipment.

Other significant uses of cash year-over-year included a decrease in issuance of short- and long-term debt, net of repayments and increased amounts for the repurchase and retirement of common stock.

We maintained a strong financial condition and liquidity position, with consolidated cash, cash equivalents and investments in fixed maturity and equity securities of $37,327 at September 30, 2025.

Since December 31, 2024, total cash, cash equivalents and investments in fixed maturity and equity securities increased by $1,611, primarily due to lower amounts for purchases of subsidiaries, net of cash acquired, changes in bank overdrafts and decreased purchases of property and equipment.

This increase was partially offset by decreased cash generated by issuances of short- and long-term debt, net of repayments, increased amounts for the repurchase and retirement of common stock and decreased cash generated from operations.

The increase in net cash provided by operating activities was primarily due favorable working capital impacts.

Other significant changes in cash year-over-year included (a) decreased usage of cash to repay short-and long-term debt, net of issuances, and (b) uses of cash related to increased cash outflow from changes in bank overdrafts, increased purchases of investments, net of proceeds from sales, maturities, calls and redemptions and increased repurchases and retirements of common stock.

We maintained a strong financial condition and liquidity position, with consolidated cash, cash equivalents and investments in fixed maturity and equity securities of $38,187 at March 31, 2026.

Since December 31, 2025, total cash, cash equivalents and investments in fixed maturity and equity securities increased by $951, primarily due to increased investments in equity securities, net of purchases and increased cash generated from operations.

This increase was partially offset by increased amounts for changes in bank overdrafts, decreased cash generated by issuances of short- and long-term debt, net of repayments, increased amounts for the repurchase and retirement of common stock and increased purchases of property and equipment.

Many of our subsidiaries are subject to various government regulations that restrict the timing and amount of dividends and other distributions that may be paid to their respective parent companies.

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Changes that occur in statutory accounting practices, if any, could impact our subsidiaries’ future dividend capacity.

In addition, we have agreed to certain

undertakings to regulatory authorities, including the requirement to maintain certain capital levels in certain of our subsidiaries.

At September 30, 2025, we held $2,647 of cash, cash equivalents and investments at the parent company, which are available for general corporate use, including investment in our businesses, acquisitions, potential future common stock repurchases and dividends to shareholders, repurchases of debt securities and debt and interest payments.

In addition, we have agreed to certain undertakings to regulatory authorities, including the requirement to maintain certain capital levels in certain of our subsidiaries.

At March 31, 2026, we held $2,164 of cash, cash equivalents and investments at the parent company, which are available for general corporate use, including investment in our businesses, acquisitions, potential future common stock repurchases and dividends to shareholders, repurchases of debt securities and debt and interest payments.

Periodically, we access capital markets and issue debt (“Notes”) for long-term borrowing purposes, for example, to refinance debt, to finance acquisitions or for share repurchases.

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Our debt-to-capital ratio may not be comparable to similarly titled measures reported by other companies.

Our consolidated debt-to-capital r atio was 42.1% and 43.0% as of September 30, 2025 and December 31, 2024, respectively.

Our consolidated debt-to-capital r atio was 42.0% and 42.1% as of March 31, 2026 and December 31, 2025, respectively.

Our senior debt is rated “A-” by S&P Global Ratings, “BBB+” by Fitch Ratings, Inc., “Baa2” by Moody’s Investor Service, Inc.

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We have a senior revolving credit facility (the “5-Year Facility”) with a group of lenders for general corporate purposes.

On September 5, 2025, we amended and restated the credit agreement for the 5-Year Facility to, among other things, extend the maturity date of the 5-Year Facility from April 2027 to September 2030 and increase the amount of credit available under the 5-Year Facility from $4,000 to $5,000.

Our ability to borrow under the 5-Year Facility is subject to compliance with certain covenants, including covenants requiring us to maintain a defined debt-to-capital ratio of not more than 60%, subject to increase in certain circumstances set forth in the amended and restated credit agreement for the 5-Year Facility.

As of September 30, 2025, our debt-to-capital ratio, as defined and calculated under the 5-Year Facility, was 42.1%.

The 5-Year Facility provides credit of up to $5,000 and matures in September 2030.

As of March 31, 2026, our debt-to-capital ratio, as defined and calculated under the 5-Year Facility, was 42.0%.

We do not believe the restrictions contained in our 5-Year Facility covenants materially affect our financial or operating flexibility.

As of September 30, 2025, we were in compliance with all of our debt covenants under the 5-Year Facility.

As of March 31, 2026, we were in compliance with all of our debt covenants under the 5-Year Facility.

We have an authorized commercial paper program of up to $5,000, the proceeds of which may be used for general corporate purposes.

Should commercial paper issuance become unavailable, we have the ability to use a combination of cash on hand and/or our 5-Year Facility to redeem any outstanding commercial paper upon maturity.

We had no commercial paper outstanding at either September 30, 2025 or December 31, 2024.

We had $724 and $0 of outstanding commercial paper at March 31, 2026 and December 31, 2025, respectively.

We are a member, through certain subsidiaries, of the Federal Home Loan Bank of Indianapolis, the Federal Home Loan Bank of Cincinnati, the Federal Home Loan Bank of Atlanta and the Federal Home Loan Bank of New York (collectively, the “FHLBs”).

As a member, we have the ability to obtain short-term cash advances, subject to certain minimum collateral requirements.

We had $180 and $365 of outstanding short-term borrowings from the FHLBs as of September 30, 2025 and December 31, 2024, respectively.

We had $0 and $150 of outstanding short-term borrowings from the FHLBs as of March 31, 2026 and December 31, 2025, respectively.

We regularly review the appropriate use of capital, including acquisitions, common stock and debt security repurchases and dividends to shareholders.

The declaration and payment of any dividends or repurchases of our common stock or debt is at the discretion of our Board of Directors and depends upon our financial condition, results of operations, future liquidity needs, regulatory and capital requirements and other factors deemed relevant by our Board of Directors.

For additional information regarding our sources and uses of capital at September 30, 2025, see Note 5, “Investments,” Note 6, “Derivative Financial Instruments,” Note 10, “Debt,” and Note 12, “Capital Stock – Use of Capital – Dividends and Stock Repurchase Program, ” of the Notes to Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

For additional information regarding our sources and uses of capital at March 31, 2026, see Note 4, “Investments,” Note 5, “Derivative Financial Instruments,” Note 9, “Debt,” and Note 11, “Capital Stock – Use of Capital – Dividends and Stock

Repurchase Program, ” of the Notes to Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

In addition to regulations regarding the timing and amount of dividends, our regulated subsidiaries’ states of domicile have statutory risk-based capital (“RBC”) requirements for health and other insurance companies and health maintenance organizations largely based on the National Association of Insurance Commissioners (“NAIC”) Risk-Based Capital for Health Organizations Model Act (the “RBC Model Act”).

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Forward-looking statements reflect our views about future events and financial performance and are generally not historical facts.

Words such as “expect,” “feel,” “believe,” “will,” “may,” “should,” “anticipate,” “intend,” “estimate,” “project,” “forecast,” “plan” and similar expressions are intended to identify forward-looking statements.

Words such as “expect,” “feel,” “believe,” “will,” “may,” “should,” “anticipate,” “intend,” “estimate,” “project,” “forecast,” “plan,” “potential,” “predict,” and similar expressions are intended to identify forward-looking statements.

These statements include, but are not limited to:

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risks associated with providing healthcare, pharmacy and other diversified products and services, including medical malpractice or professional liability claims and non-compliance by any party with the pharmacy services agreement between us and CaremarkPCS Health, L.L.C.;

the effects of any negative publicity related to the health benefits industry in general or us in particular;

the effects of any negative publicity or sentiment related to the health benefits industry in general or us in particular;

risks associated with mergers, acquisitions, joint ventures and strategic alliances;

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis