Operating income falls 27% as transformation program launches; CMS matter closed

Filed July 15, 2026 · Period ending June 30, 2026 · Compared to 10-Q Jul 17, 2025 · ~2 min read

Key Changes

• high

  Operating income declined 27% YoY to $1.8B while revenue grew, driven by Health Benefits margin compression from 3.8% to 2.1% (170 bp). Company launched multi-year transformation program in Q1 2026 targeting organizational simplification, AI adoption, IT modernization, and workforce reductions.

  MD&A: Operating Results verify on EDGAR →
• high

  CMS closed enforcement process in July 2026 after company paid $342M and completed required steps related to Medicare Advantage risk adjustment data for 2015-April 2023. $593M accrual remains with $320M range of uncertainty in either direction.

  Note 10: Commitments & Contingencies verify on EDGAR →
• high

  Medicare Advantage membership fell 15.9% YoY to 1.9M members, reversing prior year's 11% growth. Star Ratings improved sharply: 59% of members now in 4.0+ Star plans (up from 38%), which should increase 2027 bonus payments.

  MD&A: Membership & Star Ratings verify on EDGAR →