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Here is what you’ll find in this week’s newsletter!

  1. Important links 🔗 - the best articles we found this week about the Medicare Market along with links to Jared’s recent LinkedIn posts.

  2. Deep Dive 📚 - Q1 2026 Medicare Carrier Financials Side-By-Side

  3. Sponsor Snapshot 🚀 - brought to you by VRI

It’s only a 5 minute read, but it will make you 10x smarter.

Here are IMPORTANT LINKS 🔗 for the week:

  1. Adherence Measures Plateau in Medicare Part D Plans - (link)

  2. CMS Announces Aggressive Nationwide Crackdown on Fraud - (link)

  3. Former NFL Player Sentenced to Over 16 Years in Prison for $197M Medicare Fraud - (link)

  4. Access to Nutrition for Medicare Advantage Members: A Policy Update CMS Can Make Now - (link)

  5. Alignment Healthcare CEO Adds Chairman Role As Medicare Business Grows - (link)

  6. Utah doctor, nurses charged with healthcare fraud after allegedly submitting false claims to Medicare and receiving $29M in payout - (link)

  7. Episode 121: The Truth About Medicare Right Now ft. Jared Strock - (link)

  8. New Medicare Supplement Regulatory Updates - (link)

Jared’s recent LinkedIn posts:

  1. Clear Spring Health to exit MA market - (link)

  2. SelectQuote Q1 Results - (link)

  3. CVS Health Corp Q1 Results - (link)

  4. eHealth Q1 Results - (link)

DEEP DIVE 📚

Medicare Carrier Side-By-Side

In this week’s deep dive, we are looking at publicly traded Medicare carrier Quarter 1 (“Q1”) 2026 financials side-by-side.

The insurance carriers included in this analysis are all trying to capture a piece of the growing Medicare market (along with other insurance markets), and do so profitably.

Here they are:

Aside from Alignment, Centene and Molina, these carriers have both health insurance operations and healthcare services operations (providers, PBMs, pharmacies, etc.).

Here are the split of Q1 2026 revenues between these two segments for each carrier:

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Income Statement & Membership Side-By-Side

To compare and contrast the Q1 2026 results for each carrier, the Income Statement is split between “Insurance Operations” and “Healthcare Service Operations”. The consolidated statement is also displayed.

One Note: Healthcare Service Operations is different for each carrier, but generally includes providers, pharmacies, PBMs, and technology.

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YoY % Change

Here is the % change in key metrics from CY 2024 to CY 2025.

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Current Valuation Metrics

Here are current valuation metrics for these carriers

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Observations

  • The MA market split sharply between growers and those pulling back. Aggregate MA enrollment grew just 1%, masking dramatic share shifts: UNH (-8%), ELV (-16%), and MOH (-12%) shed members while HUM (+23%) and ALHC (+31%) grew aggressively. HUM's growth came at a cost, its 89.4% benefit ratio reflects new members running at above-average medical costs.

  • Medical cost pressure dominated, but carriers that took aggressive pricing action in 2025 are seeing results. The aggregate MLR held roughly flat at 86.4%, with wide variation underneath. CVS posted the strongest improvement (-2.7pp, insurance profit +68%). HUM (+2.0pp) and MOH (+1.9pp) moved in the opposite direction.

  • Revenue growth didn't flow to the bottom line. Total revenues grew 6% but operating profit fell 1% and margins compressed 0.4 percentage points — cost pressures still outpacing premium increases for most carriers.

  • ELV's headline decline is misleading. The reported 34% consolidated operating profit drop is almost entirely explained by a one-time $935M CMS risk adjustment accrual. Adjusted operating margin was roughly flat year-over-year.

  • ALHC turned its first significant GAAP profit in Q1 2026. Operating margin expanded 1.8 percentage points — a notable milestone for a company that has been absorbing losses while scaling since its 2021 IPO.

Final Thoughts

Q1 2026 was, broadly speaking, a better quarter than the industry has had in a while. Carriers that took hard action on pricing and membership in 2025 started seeing it show up in the numbers. The aggregate MLR held roughly flat. Not great, but not deteriorating further, which is meaningful context after two difficult years.

The divergence in MA membership strategy is the story worth watching into Q2 and beyond. Some carriers accepted significant membership losses to get margins right. Others grew. Whether the growers can make the math work on new members over time (particularly Humana) is the key question for the rest of 2026.

Footnotes:

ALHC Operating Profit (Consolidated YoY): Change marked NM; operating profit flipped from -$5.4M in 1Q25 to +$15.5M in 1Q26, making the percentage change not meaningful.

ALHC MLR: Reflects medical expenses / earned premiums per our methodology; differs from ALHC's reported MBR of 88.2% due to denominator definition.

CNC Expense Ratio: Inflated by ~$5.4B in premium tax pass-throughs; ex-premium tax ratio is approximately 8.8%.

CVS Operating Profit (Insurance YoY): Prior year included ~$1.1B in one-time charges (litigation, ACO wind-down, PDR); underlying improvement on adjusted basis approximately 53%.

ELV Operating Profit (Consolidated): Includes $935M CMS risk adjustment accrual and $129M restructuring charge; adjusted operating gain was $3.2B (6.5% margin).

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What MMI + Subscribers read this week…

  • Insurance Regulatory Insights May 2026 - Insurance in Motion: Med Supp Changes, CMS Updates, AI Laws, and Dental Proposals (link)

  • Non-Commissionable Plans - 2026 - Repository of 2026 Non-Commissionable Plans (link)

  • April ‘26 MA/MAPD and PDP enrollment data - April enrollment data has been loaded. Here are a few observations. (link)

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