Recapping 5/4/26 Call with IR to Revisit 1Q26 Items and CA DMHC Filings

Research evidence excerpt

Recapping 5/4/26 Call with IR to Revisit 1Q26 Items and CA DMHC Filings

,916.8

represents 28.5% of ALHC membership mix as of April CY26 vs. 23.5% as of April CY25. Avg Daily Vol (000) 3,596

We might have expected SNP membership to create more stable Part D utilization over Div Yield 0.00%

the course of the year as many of these members have subsidized deductibles and Fiscal Year End Dec

copays via LIS benefits. To the extent this is true, it is contemplated in the outlook. A big Price Performance - 1 Year

part of the Part D seasonality is when or how fast members hits risk corridors. ALHC

believes this all comes back to Part D bid strategy and benefit design. We trust that the USD26

company has appropriately accounted for these Part D dynamics in the 2Q26 adjusted 24

gross profit guide. 22

• 1Q26 DCP. We calculate 54.1 DCP in 1Q26 vs. 43.5 DCP in 1Q25; and 48.0 DCP 18

in 4Q25. As we heard on the 1Q26 call, ALHC continues to reserve conservatively 16

consistent with historical practice but would not say the increase in 1Q26 DCP 14

necessarily implies increased conservatism vs. historical. Within the 10.6 DCP increase 12

y/y, about 1/3 is attributable to capitation payable and risk pool payable dynamics. Non- 10

core or non-fundamental items that do not relate to medical reserving. Another 1/3 of May-25 Jul-25 Sep-25 Nov-25 Jan-26 Mar-26 May-26

the increase comes from the timing of claims payment. Final 1/3 is normal course of Source: Bloomberg

business fluctuations. ALHC feels good about the reserve methodology, but says 1Q26

methodology is very consistent with historical levels of reserving and incorporates typical

1Q prudence. Incurred but not paid days offers the cleanest read of medical expense

reserves, in our view.

RISKS TO ACHIEVEMENT OF PT & RECOMMENDATION