Latest Thoughts On MCOs Into Q2

Research evidence excerpt

Latest Thoughts On MCOs Into Q2

Healthcare Facilities & Managed Care

Drug Retail - Market Weight

Managed Care - Market Overweight

Latest Thoughts On MCOs Into Q2 June 23, 2026

The Wolfe Byte

We provide updated thoughts across the MCO group heading into Q2 earnings season focusing on latest co

commentary by coupled with recent channel checks including NFP BCBS webcast series. We also refresh #s and

PTs on HUM / UNH / ELV / CNC / MOH / ALHC / OSCR.

●Cost Trends Key For The Group Into Q2 – MCOs continue talking to in-line to slightly moderating trend broadly

with Med Adv leading the way with trend modestly lower above and beyond weather/flu in Q1. Medicaid trend

is state/co. specific with macro trends remaining elevated but specific plans pointing to some success in bending

the cost curve via medical management and working with states on items such as greater utilization oversight on

GLP1s. Commercial trend remains stubbornly elevated with no signs of relief and most of our checks indicating

Exchanges too early to call until Wakely data hits later this month. Overall, when coupled with conservative

pricing / guidance posture for most MCOs coming into the year, we see continued potential for upside to MLR/

EPS for the group and clearly this is beginning to be priced into stocks with managed care stocks up 30% on avg.

YTD. With the focus on trend, we will be hosting 2 more calls with NFP BCBS MCO execs over the next week

(BCBS NC was last Thursday, Highmark Health BCBS was yesterday) in order to ascertain latest trends post May

close heading into Q2 results – email your salesperson or us directly for invite. See attached slides beginning on

page 5 of this note for updated #s and PTs across our MCO coverage universe. CVS/HUM/UNH remain top picks.