Medicaid Enrollment: 2Q Results May Mask Worsening ‘Same-Footprint‘ Attrition

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Medicaid Enrollment: 2Q Results May Mask Worsening ‘Same-Footprint‘ Attrition

%). We expect CVS and ELV to report membership that is relatively flat

from 1Q 0.5%/(0.4%). Alternatively, our data suggest HUM membership growth, which we estimate Exhibit 3 - M/M Medicaid Enrollment Growth

at 3.8% QoQ. This is reflective of the members gained from UNH's exit in LA, along with continued by Carrier: Total vs. "Same-Footprint"

growth in SC, OK, VA, and IL.

2Q Sentiment: Same-Footprint Attrition Pointing Much More Negative. As stated above, we

expect 2Q reported QoQ enrollment trends to vary across carriers. However, stripping out member

gains/losses from contract changes and updates tells a more cautious story. We estimate avg 2Q

Same-Footprint attrition of (1.6%), 50bp higher than our 1Q estimate of (1.1%). Notably, 5 out of 6 .

Source: State websites, KFF, company reports, Jefferies

companies experienced an acceleration in QoQ Same-Footprint attrition in 2Q vs. 1Q, while UNH was estimates.

the lone exception, decelerating from (2.2%) to (1.7%). We estimate MOH, ELV, and CNC QoQ Same-

Footprint attrition of (2.1%)/(1.5%)/(1.8%), above 1Q estimates of (1.6%)/(0.8%)/(1.1%). Below, we

calculate the implied acuity-related MLR pressure from the observed acceleration in Same-Footprint

attrition during the quarter.

Implications on Acuity Shift + JEFe 2Q Ests. We remain confident that member attrition

mechanistically leads to morbidity shift. Conversations with multiple former state Medicaid

directors and a former Medicaid chief actuary reinforce that the higher the administrative burden, David Windley, CFA * | Equity Analyst

the more people will drop off the roles. The people who don't persevere through the application +1 (615) 963-8313 | dwindley@jefferies.com