Takeaways From NFP MCO Channel Checks

Research evidence excerpt

Takeaways From NFP MCO Channel Checks

Managed Care

Takeaways From NFP MCO Channel Checks June 26, 2026

●Key Themes From Conversations with BCBS Executives – We recently spoke

with senior finance executives across the NFP MCO universe to gauge broader

industry economic trajectory and 2026 cost trends heading into 2Q’26 results

across the MCO space. NFPs saw a perfect storm of margin pressure in 2025

given significant exposure to risk pool deterioration in both the Exchanges and Justin Lake, CFA

Medicaid coupled with macro cost trend pressure. That said, similar to for-profit jlake@wolferesearch.com

(646) 582-9280

peers, many NFPs are seeing a V-shaped recovery in both HIX (pricing/acuity) View Justin’s Research

and MA (pricing/trend) with Medicaid also seeing state specific improvement View Comp Table

as a result of rate updates and aggressive medical cost management. Another Dillon Nissan

consistent theme from our conversations was that Commercial / Employer dnissan@wolferesearch.com

(646) 582-9281

utilization trends remain stubbornly high, again similar to commentary from for-

profit peers. Overall, we view the checks as affirmative of our constructive thesis Ben Tenner

btenner@wolferesearch.com

on Med Adv, indicative of potential upside on better than expected acuity and (646) 582-9289

strong pricing in Exchanges and while somewhat mixed, directionally positive

for Medicaid heading into 2027 work requirements. See below for more detail

and we will host a webcast this morning to discuss takeaways and broader

thoughts on our HC Services coverage universe heading into Q2 results this

morning at 11am ET – link hereto join.

●NFPs Indicate Medicaid Margin Improvement in 2026 From 2025 Loss Levels

– We see commentary on Medicaid most interesting and differentiated vs. for-