Oct 27, 2026 earnings call — Updated 2026 EPS guidance and segment momentum
Raised full-year adjusted EPS guidance to >$5.20 after Q3 adjusted EPS of $0.58.
Revenue $50.6B (est $47.1B) · EPS $0.58 (est $0.10)
Key quotes
"Rate updates since July have been consistent with expectations and our view of the full-year 2026 composite rate remains steady at ~5%."
"As a result of strong execution against our turnaround plan, we are now on track to achieve breakeven financial results in 2026."
"In fact, the underlying strength enabled us to move to the top of our previous 4.5% to 5.0% pretax range for 2026."
Analyst Q&A 13
Medicaid talks with states
Q (David Windley · Jefferies): The analyst asked for more detail on discussions with states about rate adjustments and mechanisms, and what to expect for January 1.
A: Management said conversations are early but showing positive signs. States are highly engaged, sharing data, and some have already put explicit provisions into draft rates for the January 1 cohort.
"It is still early, but I would say that we are seeing positive signal in terms of just, first of all, a very high engagement rate, really good conversation and data exchange." — Sarah London (CEO)
Exchanges and PDP margins
Q (Justin Lake · Wolfe): The analyst asked whether the overall exchange market will grow in 2027 and whether PDP margins should reset to 2% or 3%.
A: Management said they expect slight market contraction into 2027 but feel good about product positioning and driving margin expansion. For PDP, management expects an opening margin range of 2% to 3% and will aim to outperform it during the year.
"probably somewhere in 2% to 3% range would be the opening expectation for PDP for the year." — Andrew Lynn Asher (CFO)
Marketplace margin bridge
Q (Steven Baxter · Wells Fargo): The analyst wanted help bridging the quarter's results, the IDR catch-up impact, and why management still expects strong full-year outperformance.
A: Management said commercial includes group business and exiting Health Net commercial group in California affects results. They noted marketplace improved from 1.0% to a forecasted 5.0% pretax margin and that strengthening fundamentals helped cover the increased IDR reserves; they do not expect that bolus to recur in Q4.
"So that is 600 basis points of pretax margin improvement." — Andrew Lynn Asher (CFO)
G&A cost cuts and seasonality
Q (AJ Rice · UBS): The analyst asked about rightsizing G&A, other initiatives, and whether Q4 public exchange seasonality is normal or increased.
A: Management said Q4 seasonality for commission-based enrollment is normal. They described ongoing work to simplify processes, drive automation, and implement ROI-driven AI to make staff faster, seeing SG&A as a tailwind into 2027.
"I think there are, you know, a number of initiatives around that, everything from streamlining our process, driving further automation." — Sarah London (CEO)
Commercial pricing and metal mix
Q (Ann Hynes · Mizuho): The analyst asked how to think about 2027 pricing and metal mix versus 2026, and learnings from shifts between silver/gold/bronze.
A: Management said pricing is set with county-level granularity to balance margin and affordability; 2026 saw movement into bronze but Ambetter moved less than peers. They do not expect a big metal-shift in 2027 and will keep bronze as an important part of the portfolio.
"So I do not think you should expect some huge shift in our overall metals here, but we do continue to see bronze as a really important part of the portfolio, and took that into account as we constructed the 2027 strategy." — Sarah London (CEO)
Workforce cost savings
Q (Andrew Mok · Barclays): The analyst asked about expected annualized savings from the $480 million workforce and enterprise optimization costs, the ratio of savings to charges, and timing across 2026–2027.
A: Management confirmed the $480 million program, saying most costs were taken in Q3 with some in Q4 and early 2027 service amortization; the charge remains. They said SG&A rate should come down as a durable improvement but they are not yet mapping quarter-to-quarter savings.
"So the $4.80 still stands with respect to sort of the broad workforce and enterprise optimization execution that we are undertaking." — Andrew Lynn Asher (CFO)
Medicaid acuity and Q4 impact
Q (Sarah James · Cantor Fitzgerald): The analyst asked how much of the 50 bps cushion has been absorbed so far versus expected Q4 acuity lift, and whether the back-half slope is just bronze mix.
A: Management said some of the 50 bps was chewed up by Q3 utilization and acuity; membership was down roughly 200 thousand in the quarter, in line with expectations. They expect a larger membership drop in Q4 and that bronze utilization is tracking in line with expectations, with moderating trend in high-acuity silver membership.
"But if you look at just the membership shift, we were down roughly 200 thousand members in the quarter, which was in line with expectation." — Sarah London (CEO)
Acuity now vs 2027
Q (Kevin Fischbeck · BofA): The analyst asked whether the Q4 acuity shift will offset 2027 effects, and whether the small Medicaid margin improvement reflects concern about acuity or slower rate increases.
A: Management said the 2026 acuity shift is largely a pull-forward of what work requirements would cause, which is a net positive because some impact is being absorbed earlier. They said the main 2027 concern is a dislocation between rate and acuity, but they see positive signals: better base data from 2025, states adding prospective work-requirement adjustments to rates, and staggered implementation spreading disenrollment timing.
"I do think as we have looked at it, that the acuity shifting that we have seen in 2026, so far and expect to continue in into Q4." — Sarah London (CEO)
Nebraska redeterminations learnings
Q (John Stansel · JPMorgan): The analyst asked about Nebraska renewals, high re-enrollment for members providing data, and learnings for 2027.
A: Management said Nebraska is one state and overall net roll-off matched expectations, with most members who provide eligibility data being reenrolled. They view this as a signal that states are leaning toward coverage continuity, using levers like self-attestation for frailty to reduce administrative churn.
"I think there is some important signal in there in terms of, again, a broad view that states are approaching this with the idea that members who demonstrate eligibility should continue to have access to Medicaid coverage." — Sarah London (CEO)
Part D retention and SG&A
Q (Lance Wilkes · Bernstein): The analyst asked about Part D retention, margin differences for new vs retained members, G&A level, and any policy impacts from midterms.
A: Management said policy conversations focus on access and affordability and possible bipartisan actions to support coverage continuity. On Part D, management said higher direct subsidy reduced required G&A per member to a low-to-mid single digit percentage, which pushes up HBR because the target margin is plowed into benefits, yet they still expect mid-to-high threes margin this year.
"What that does is that pushes up the HBR because you set a target margin, and then you sort of plow the difference into benefits." — Andrew Lynn Asher (CFO)
MA margin outlook and Medicaid assumptions
Q (George Hill · Deutsche Bank): The analyst asked for order-of-magnitude margin expectations for core MA next year and high-level 2027 rate and trend assumptions for Medicaid.
A: Management said it is too early to give 2027 specifics but noted MA breakeven was reached a year early, creating a base for margin expansion into 2027 and beyond. For Medicaid, they will provide more detail in February, citing constructive conversations, 2025 base data helping rate construction, and a pipeline of cost-management initiatives.
"it is still, I think, too early to comment on 2027, but you heard from Drew headwinds and tailwinds." — Sarah London (CEO)
State readiness and transitions
Q (Baird): The analyst asked how management factors risks from new state leaders after midterms, and how they assess state readiness for a January 1 go-live, including ex parte renewals.
A: Management said states vary in capabilities, so the company aims for maximum readiness and supports states where needed, doing data work to load definitions and model impacts. They believe election changes are manageable given federal frameworks, ongoing agency relationships, and practical administrative limits on aggressive rollouts.
"So our strategy has been to make sure that we are at maximum readiness in every state and that we are leaning in as much as possible to sort of fill the gap or support states in areas where they are still working through things." — Sarah London (CEO)
Florida utilization and waiver policy
Q (Scott Fidel · Goldman Sachs): The analyst asked about the scope of higher utilization seen in Florida and how CMS shifting waiver budget rules might affect Medicaid spending and innovation.
A: Management said Florida showed a slight uptick in September likely from members anxious about program transition, not significant or persistent after their October 1 transition. On waivers, management does not expect a major impact but said states will need to be thoughtful since the change enforces budget neutrality more seriously and could curb some innovation.
"So in Florida, we saw a slight uptick at the end of the quarter, I think September, largely we assume driven by folks who were sort of anxious relative to the program transition." — Sarah London (CEO)