Commercial revenues increased 48% YoY, driven by a 41% increase in Marketplace membership. This growth is attributed to strong product positioning and overall market growth.

Medicaid membership decreased, impacting total revenues and gross margin. The decrease in total revenues was driven by lower membership largely due to redeterminations.

Recent divestitures in the Other segment impacted total revenues and cost of services. The cost of service ratio increased due to the divestiture of Circle Health, which operated at a lower cost of service ratio.

The SG&A expense ratio increased to 8.9% compared to 8.6% in the first quarter of 2023. The increases were driven by growth in the Marketplace business, which operates at a meaningfully higher SG&A ratio as compared to Medicaid, along with Medicare distribution costs.

The decrease in Star quality ratings in the 2023 rating year adversely impacts our 2024 Medicare revenue. A premium deficiency reserve of $300 million was recorded to reflect the seasonality of earnings, in connection with the 2024 Medicare Advantage business.

The company intends to continue to target initiatives to improve productivity, efficiencies and reduced organizational costs. These actions encompass a larger organizational mission to enhance our member and provider experience, improve outcomes for our members and innovate to ensure that Centene is a great partner in all aspects of our operations.

Eligibility suspensions from the onset of the PHE drove increased membership through March 2023, followed by decreases beginning in April 2023 and continuing through the first quarter of 2024. Redeterminations related to the PHE should conclude during the second quarter of 2024, however some states could see redeterminations extend past the second quarter given CMS compliance actions.

The Company is routinely subjected to legal and regulatory proceedings in the normal course of business. These matters can include, periodic compliance and other reviews and investigations by various federal and state regulatory agencies.

Substantially all of our investments are subject to interest rate risk and will decrease in value if market rates increase. Assuming a hypothetical and immediate 1% increase in market interest rates at March 31, 2024, the fair value of our fixed income investments would decrease by approximately $632 million.

Marketplace membership increased year-over-year due to the expanded footprint, strong product positioning and open enrollment results, as well as overall market growth.

Consistent with our strategic positioning and bid strategy, Medicare Advantage membership declined year-over-year.

While we have work to do to improve Star scores, this demonstrated the first step towards our multi-year goals. Our leadership team launched a multi-year plan to build and improve quality across the enterprise with a strong focus on enhanced patient experience and access to care.

The SG&A expense ratio was 8.9% for the first quarter of 2024, compared to 8.6% in the first quarter of 2023. The increases were driven by growth in the Marketplace business, which operates at a meaningfully higher SG&A ratio as compared to Medicaid.

The cost of service ratio for the three months ended March 31, 2024, was 82.8%, compared to 77.2% in the same period in 2023. The increase was driven by the divestiture of Circle Health, which operated at a lower cost of service ratio.

We spent $151 million in the three months ended March 31, 2024 on capital expenditures the majority of which was driven by system enhancements and computer hardware.

We spent $151 million in the three months ended March 31, 2024 on capital expenditures the majority of which was driven by system enhancements and computer hardware.

With trends in the personalization of healthcare technology, we continue the use of data and analytics to optimize our business.

During the first quarter of 2024, we repurchased 681 thousand shares of common stock for $51 million under the stock repurchase program. We have approximately $5.2 billion remaining under the program for repurchases as of March 31, 2024.

In 2022, the Company's Board of Directors also authorized a $1.0 billion senior note debt repurchase program. No repurchases were made during the quarter ended March 31, 2024. As of March 31, 2024, there was $700 million available under the senior note debt repurchase program.

We spent $151 million and $225 million in the three months ended March 31, 2024 and 2023, respectively, on capital expenditures the majority of which was driven by system enhancements and computer hardware.

In March 2024, the SEC adopted the final rule under SEC Release No. 33-11275, The Enhancement and Standardization of Climate-Related Disclosures for Investors. The Company is currently evaluating the effect of the new disclosure requirements.

Medicaid membership decreased, impacting total revenues and gross margin. The decrease in total revenues was driven by lower membership largely due to redeterminations.

The decrease in Star quality ratings in the 2023 rating year adversely impacts our 2024 Medicare revenue.

The United States government, policymakers and healthcare experts continue to discuss and debate various elements of the United States healthcare model. We remain focused on the promise of delivering access to high-quality, affordable healthcare to all of our members and believe we are well positioned to meet the needs of the changing healthcare landscape.