Hi, good morning everyone, and thank you for joining us. My name is Nathan Rich, and I cover managed care here at Goldman . Our next session is with The Cigna . We're joined by the company's CFO, Brian Evanko. Brian, it's great to see you. Sorry I couldn't be there in person. COVID got the best of me, so I had to sit this one out. My colleague Lindsay Golub is also hosting, and we really appreciate the opportunity to speak with you this morning.
Thanks for hosting us, Nate. Great to see you, at least virtually.
Yeah. We got to see each other at the Analyst Day earlier this month, and that's sort of where I wanted to start with the questions. At the Analyst Day, you maintain the guidance for 6% to 8% revenue and earnings growth on a consolidated basis. There's a change to some of the components, I think slightly higher Evernorth growth, maybe offset by slightly lower, a lower outlook for commercial, not big revisions. Can you maybe just go through at a high level? How do your view of the drivers of business, you know, the business has changed as we look out over the next like three to five-year period?
Yeah, sure, Nate. In aggregate, the company expects consolidated revenue and income to grow on average 6% to 8% per year on a sustained basis. That ladders up with our capital deployment expectation of 4% to 5%, EPS accretion from that to 10% to 13% all-in EPS growth on a sustained basis. That's consistent with our prior targets in aggregate. To Nate's point, the components moved a bit. We increased the growth outlook for our Evernorth business up to 5% to 7% per year on both the top and the bottom line. That's up from where it was previously, was 4% to 6%. If you recall back before Cigna acquired Express Scripts, that business had only been anticipating 2% to 4% annual growth.
Significant growth that we've already seen in the last three years since the acquisition, and now an uptick in the expected growth rate to 5% to 7% per year. That's predominantly driven by three things. One being we now have greater visibility into what we expect the biosimilar contribution to be for the Evernorth portfolio, and we expect that to be more favorable than our prior expectation. Two, our Evernorth Care Services platform, which represents a variety of health-oriented capabilities such as behavioral health, virtual care, home-based care, amongst other things. We expect to generate a higher growth rate in the future to the tune of 10% to 15% or more annually. That gives us a little bit more tailwind on the top and the bottom line in Evernorth. Finally, the cross-enterprise leverage opportunity we have with Cigna Healthcare, which is our US commercial and U.S.
government businesses, we see as providing additional revenue and income growth opportunities. All of that contributes to the 5% to 7% average annual growth expectation in Evernorth. On the Cigna Healthcare side of the portfolio, which if you think about our two large segments, Evernorth and Cigna Healthcare, within Cigna Healthcare, US commercial, we have revised the growth outlook down slightly. It was previously expected to grow 8% to 10% per year. We now expect 6% to 8% average annual growth in that segment for two reasons. One, the business is now a lot bigger than it was. If you rewind the clock just eight, nine years ago, it's twice the size as it was eight or nine years ago. Secondly, our more recent experience has generated a 7% average annual growth rate.
We feel a 6% to 8% forward-looking growth rate is a prudent place for that business to be. That continues to exceed market growth expectations because we have a significant opportunity to grow in the smaller employer segments, specifically the select employer segment, which is 50 to 500 sized employers, where today we only have 6.5% market share. We see significant headroom to grow there, which contributes to above-market growth in the US commercial part of the portfolio. Taken together, a little bit of uptick in the Evernorth growth rate, a little bit of a downtick in the Cigna Healthcare growth rate to be more in line with our expectations moving forward. In total, very confident in our ability to deliver 6% to 8% average annual growth and 10% to 13% EPS growth.
Great. You left the guidance for the US government business largely unchanged. I think kind of low double-digit growth, kind of what you think would be sort of at or slightly above the market. 2022 came in below your expectations. I guess maybe what did you learn from the experience in 2022 and how are you going to address that and improve the performance of the business going forward?
Yeah, so within government, we have Medicare Advantage, the individual exchange, and then we also have some smaller products. Maybe I'll talk about Medicare Advantage since it's the largest part of that portfolio. As we stepped into 2022, we knew we needed to have some margin enhancement. Our bids were constructed to prioritize margin expansion. Additionally, we curtailed some of our investment in marketing and distribution at the end of 2021, realizing that we were likely not to see meaningful growth in 2022. All those things resulted in the growth being very flattish this year compared to where we were in 2021. On a forward-looking basis, we would expect Medicare Advantage to grow 10% to 15% on average in terms of the customers. We would expect the all-in government segment revenue to grow 10% to 15% per year on average.
Some of the things we learned, kind of to the core of the question, Nate, as we reflect on that this past cycle, one, the provider network is extremely important in the M&A space, and we have some work to do in certain geographies to either expand the network or in some cases make adjustments to it for affordability reasons. Two, Cigna has a meaningful amount of US commercial employer customers who age into Medicare each year, to the tune of about 150,000 people each year. We have not done a very good job of converting those individuals into Medicare Advantage offerings. That gives us a great opportunity moving forward. Third, I mentioned we curtailed our marketing investment a bit last year. We expect to see a step up in that for purposes of driving 2023 growth. Finally, our geographic expansion opportunities in Medicare are still significant.
Today, we only have a footprint in about one-third of all of the Medicare geographies around the country. Additional expansion there gives us some company-specific growth opportunity in Medicare. Also, some of the more recent geographic expansions we've done in 2022, 2021, and 2020 have yet to reach full maturity. Taken together, all those pieces give us the confidence to return to a nice growth rate in 2023.
Great. One last high-level run on the guidance, and then I wanted to get into the two segments. Now, capital deployment, you highlighted the $40 billion of free cash flow that you expect to generate over the next five years. I think it's $28 billion after you take into account debt repayment and the dividend. Can you talk to us about how you're approaching and allocating between M&A and share repurchase and what that would look like both, you know, in 2022 and then beyond? You did highlight potential for M&A in US government. Is that more focused on breadth or depth? Do you kind of see it as a tool to kind of gain scale in Medicare Advantage or maybe on the exchanges, or would the goal be to kind of expand into maybe a market you're not in, like Medicaid? Any thoughts you have there would be helpful.
Yep. In terms of the numbers, your math is right on. We expect to generate $50 billion of cash flow from operations over the five-year period, 2022 to 2026. When you reduce the other uses of that capital, we have about $28 billion that we forecast to be available for strategic M&A or share repurchases. Of course, that'll be generated over time, right? That won't all be available at one point in time. It'll be generated over the five-year span. We would expect to have an end capital deployment strategy, M&A. As you think about it, we would expect to do some M&A and share repurchase. In 2022, we've committed to do at least $7 billion of share repurchase, which is a meaningful amount, obviously, given our market cap. That follows in 2021 where we repurchased $7.7 billion of our shares. 2021 and 2022 were very heavy repurchase years.
In 2021, we did acquire MDLive. Right now, in 2022, we still have some firepower available for smaller acquisitions, which you should think of in the hundreds of millions of dollars or potentially single-digit billions of dollars range. The M&A that we look for is really focused in two areas. One is US government programs and services, and the other is in our Evernorth platform, specifically health-oriented capabilities to expand the Evernorth Care Services chassis. We're willing to look at acquisitions that fall into those two categories, whether they be small or large in the future. Importantly, larger acquisitions later beyond 2022 have to be strategically aligned to our company's goals, financially attractive, meaning accretive in year one, and they have to be carrying a high probability of closing relative to antitrust reviews and other considerations. Any larger scale acquisitions have to meet those criteria.
To your point on what are we looking for in the government space specifically, I'll think of a couple of different things. In the US government side of the Cigna Healthcare portfolio, today we have a small Medicare Advantage footprint I made reference to earlier. About one-third of the U.S. is covered. We have no Medicaid presence at all, and we have a small individual exchange footprint. Any of those areas are of interest to us in the health plan side. Over in Evernorth, there are government programs and services that are interesting to us as well. It could be either health plan or service-oriented as we think about where acquisitions could lie.
Great. Okay, I wanted to move into the segments, and maybe starting with Evernorth. In a high-level one, you've talked about the improvement in Evernorth's performance since you bought Express Scripts. It feels like the company hasn't gotten credit from a stock price perspective. I guess, what do you feel like the market's missing? At the Analyst Day, you mentioned some incremental disclosures that you may begin to provide around Evernorth's performance. What do you think would be most helpful for investors to track and maybe better appreciate the opportunity that you have with Evernorth?
Yeah, within Evernorth, there's a few things that I think are important to contextualize, and I'll get into the specifics here. One, at the Investor Day, we profiled some of the differences between the growth profiles within the different sub-businesses within Evernorth. Specifically, our pharmacy benefits services business, Express Scripts, which includes the benefits management capabilities and the home delivery. We characterize that as a foundational growth business, meaning predictable, steady growth historically and going forward. We would expect on average that'll generate 2% to 4% average annual growth rates. The second component falls into what we call an accelerated growth category, and this is our Specialty Pharmacy. For those of you not familiar with Accredo, we have approximately 25% market share today, rapidly growing, huge opportunity going forward.
A very differentiated asset, deep clinical expertise, and we have the most access to exclusive or limited distribution drugs in the U.S. Today, this has been growing in the low double digits. We forecast moving forward, it'll grow 8% to 10% per year on average in the future. The third component within Evernorth is the Evernorth Care Services platform. I made reference to this in an earlier question. We would expect this to grow 10% to 15% or more per year going forward. That includes all of the health-oriented services outside the pharmacy swim lane when you think about virtual care, behavioral care, some of the home-based care that we already provide today. All those areas we would expect to see outsized growth. Taken together, you've got some lower growth, predictable, stable businesses, and then some higher growth businesses all within Evernorth.
Some of the disclosures that we would expect to provide, some of them will occur on an intermittent basis when the needle is moved enough. Some of them we intend to eventually provide on a quarterly basis that will help investors track the progress in those three sub-businesses I just made reference to. There are some specific metrics that we're evaluating, providing as well. For example, today, about 7% of the drug spend that we impact has competition in its respective class. Over the next five years, we expect that to grow to 25% with biosimilars really coming online to a greater degree, as well as continued innovation in the generic space. Those things we would expect to provide on a periodic basis to investors as well. We're working through that as we speak, Nate, in terms of what'll be intermittently disclosed versus what'll be disclosed on a quarterly basis.
Makes sense. I did want to ask on biosimilars. That seems like one of the key drivers over the next several years. You identified it as, I think, a $100 billion opportunity, you know, Humira being the largest of which will start to face competition next year. Humira is already a highly remunerated drug. I guess, could you help us think about sort of the incremental value that you think can be realized with additional competition? Are there examples like, you know, Remicade or Assembly? I know it hasn't been on the market all that long, but would maybe that provide a guide or an example of what investors should think about the opportunity with Humira and the other biosimilars there to come?
Sure. Yeah, so the $100 billion that we quoted is the total industry spend that we expect to be subject to biosimilar competition in the coming years. Today, Evernorth impacts about $30 billion of that $100 billion, just given our share in the space. That's $30 billion of potential value creation for our clients and customers. We would expect to generate a certain amount of savings off of that $30 billion. Of that, we would expect a portion of that to be available for us to capture from the standpoint of our income. Actually, the research report you published a couple of weeks ago, Nate, I thought did a nice job of providing context on the market opportunities.
While I wouldn't necessarily bless the exact numbers that you put forth, it's a nice picture in terms of how to think about framing the opportunity in the coming years as you look at the industry landscape. The Remicade, Assembly examples that you called out, each of these drugs is going to have their own set of dynamics. I wouldn't necessarily use Remicade, for example, to try to model Humira when the biosimilar competition comes out because the Remicade introduction was largely in the medical benefit. We see, for example, Humira and some of the other biosimilars having more value in the pharmacy benefit. There's a little bit of apples and oranges there. The pricing that is introduced by some of the biosimilar manufacturers could vary pretty meaningfully from what we've seen with the historical launches. I would tend to think of Humira as going to be its own animal.
A lot of dust still needs to settle on that because the more material biosimilar competition won't actually enter until the third quarter of 2023. There's still a ways away as we sit here in June of 2022. We're very excited about the opportunity to create value and ultimately capture a portion of that from our shareholders.
How should we think about that for Humira? Because, like you said, the biosimilars are going to be coming on at different points over the next year. It probably won't be until 2024 before you kind of see the full impact of competition. Just from a process standpoint, how frequently can you update the formulary? Will the process look different by different lines of business between commercial and Medicare? If you could maybe just talk to that process, that'd be great.
Sure. Our national preferred formulary, which is used by the majority of Evernorth's clients, is updated twice a year. We will have the opportunity for a couple of updates to that. Importantly, our clients have the flexibility to have custom formularies as well. We have a number of client-specific formularies that they can choose if they want to go to a more unique construct relative to what we've decided to prefer on the national formulary. With that said, we would anticipate later this year to have a little bit further clarity because the first, the Amgen biosimilars, is projected to launch in February of 2023. We would expect to have a little bit further clarity on that. As I made reference to, in July of 2023 is when the next group of biosimilars will be hitting the market.
We would expect there's going to be a lot more in the way of information as well as economic understanding as we get into 2023. At this juncture, we've made estimates for what we think will transpire, but we also expect 2023 to be a bit more of a partial year effect due to the fact that the more significant competition will not be entering the market until the back half of the year. We would expect 2024 to be a more significant contribution year, 2025 to be more, given you've got additional biosimilars hitting in 2024.
Okay, makes sense. The other thing that's kind of come to the forefront again is, you know, around the regulatory front with the PBMs. I think there's a bill introduced in Congress at the end of May and then an FTC inquiry announced into PBM practices this month. I know these things come up from time to time, and it's kind of difficult to know what the outcome will be. Do you have any kind of high-level thoughts on either of those? From our standpoint, it seems like spread pricing is one of the things that's in question here. Maybe how would you characterize the relative importance of spread pricing in the PBM model today versus maybe what it was in the past?
Yeah, so I think if we start off with the problem statement here, I think we would all agree affordability of prescription drugs in the U.S. is still a problem, right? At Evernorth and at Cigna, we don't step back and say defend the status quo because everything is perfect. We agree there needs to be change, whether that's driving more competition through biosimilars or other methods to try to drive it at that problem statement, which is affordability. We start there. I think we all agree on that. You get into what's the solution? There are a lot of ideas that are advanced for potential solutions, some of them misguided, some of them more thought out than others. We received the FTC inquiry last week. We'll fully comply with that. We'll work through the response over the course of the next few months in conjunction with the FTC.
The good news in the inquiry is it's pretty open-ended. I know you made reference to spread pricing. It didn't necessarily go after that in particular. It was more open-ended, which gives us the chance for us to tell our story. We're confident that when our story is more fully understood, not in the sound bites that sometimes come through the media, but more fully understood in a quantitative and qualitative way, people will realize the role that pharmacy benefit managers play is to drive affordability on behalf of our clients and customers. In the absence of our existence, there's no systematic way to guard against drug price inflation from the manufacturers. We play a critical role in driving competition and driving affordability on behalf of our clients and customers.
We're confident that through this inquiry process, through some of the other bills that have been advanced, our story will be better understood. It'll become clear that the world's better off due to the existence of companies like us. Importantly, though, Evernorth, as you think about the value creation and value capture levers, is not geared to anyone in particular. If something were to transpire, for example, the DIR rule for 2024 that's in queue or something on spread pricing or something on rebates, we have enough levers to drive competition and therefore lowest net costs that we're not dependent on anyone. As a result of that, we'll be able to continue to create value and capture that value for our shareholders and deliver against our long-term financial commitments.
Great. I maybe wanted to move over to the Cigna Healthcare segment, maybe starting with the outlook for the commercial market. The analyst that you talked about, a long-term outlook of kind of 0% to 1% growth for the market. You know, how are you thinking about the outlook for next year, maybe relative to that 0% to 1% range? Can you maybe speak to some of the moving pieces? I think just generally from a high level, it'd be great to get your view on how you think about the company's exposure to either a recession or softer employment backdrop and what impact that would have.
Right. A lot in there. In terms of the commercial employer segment, though, and how to think about the enrollment growth, we would expect on a sustained basis that you'll see a flattish enrollment for the industry. Across the industry, we're not anticipating meaningful growth in that space. With premium increases, though, you get to secular growth rates in the mid-single digits. Our expectation of driving 6% to 8% average annual growth over an extended period of time is slightly above that secular growth, predominantly due to the expected select employer segment growth that I made reference to in an earlier question. As it relates to 2023 in particular, at this point in time, we don't have a reason to believe that there'll be a material variance from that 0% to 1% life growth number up or down.
With that said, we continue to remain respectful of what could happen with the economic conditions. Clearly, there's some increasing likelihood that's transpired in recent days about a recession on the horizon, whether that be a shallow or a deep one remains to be seen. Importantly, as you think about Cigna in the context of economic stress or a recession, there are some things that actually work in our favor. There are some things that are more neutral, and then there are some things that could be risk factors. The things that tend to be more in the favorable categories are Evernorth business, which represents, again, over 60% of the company, tends to be a little more resilient to times of economic strain because things like medication adherence have always been part of our DNA.
When you think about specialty medications, which often are life or death, people will not forego those, even if there's economic strain transpiring. Within the Cigna Healthcare broker business, history has shown that when there is some economic pressure, an individual's spending on out-of-pocket starts to decline a bit. Services that may be somewhat discretionary might be not consumed during times of economic strain. That provides a little bit of potential favorability. Within our capital management, our balance sheet, et cetera, we have more floating assets than we do floating liabilities. If you see an environment where interest rates go up, that tends to be a good thing for us in terms of the effect on our balance sheet relative to assets versus liabilities. In terms of the risk factors, though, I'd be remiss not to call out if the U.S.
If the employment market does take a structural hit, that likely provides some volume risk for us as we think about the US commercial growth outlook going forward. The offset to that is the subsectors and the industries where we participate tend to be a little more insulated and not necessarily as representative of the broader US employment population. We tend to have less exposure to leisure and hospitality. We tend to have a little more exposure to technology and consulting and spaces such as that. I don't want you to take away that we're recession-proof by any means because if there's a recession, it likely would have some pressure on our commercial employment levels.
Great. One more on my end, and then maybe we can just see if anyone in the audience has a question. I wanted to ask about kind of cost trend. Obviously, you know, when listening to the providers, they're facing some very tough cost pressures or wage pressures right now. I guess, you know, from a provider contracting process, how does that work? What have the negotiations with providers been like? Can you talk about, maybe as you go through those renegotiations for 2023, whether you're kind of open to maybe a rate increase from a provider versus when you would push back and how that kind of plays itself out into overall cost trend for your book?
Sure. There is no denying that our healthcare provider partners are seeing the inflation work its way through their own wages. It is important to bifurcate, though, that which is structural, meaning where there is FTE wage inflation, versus that which could be temporary. If you think about contract labor pressures, which may subside in the future here. When we get into conversations with providers about rate increases, we start with a fact-based, data-driven approach in terms of what information is available so that we can have a civil conversation in that regard. Most of our contracts are multi-year in nature within Cigna Healthcare in terms of the provider contracts. On average, the median term is three years. We do not have everything up for renewal in 2023. Most of the 2022 dollars are already locked up.
Virtually everything is already locked up at this point from a unit cost standpoint. In 2023, we will have a certain percentage of the book that is up for renewal and renegotiation. We are in active discussion on some of those already, and some of them are still to come. We will have others that are locked for 2023. They will be reopened in 2024, and then we will have some others that reopen in 2025. We do expect, based on what we see right now, based on the negotiations that we have had, to have slightly greater than average unit cost trend in 2023 compared to what I call a normal year.
You should think of that in the range of 0 to 100 basis points if you are the weighted average effect on our book of business above what we would normally see in a time when inflation was not spiking the way that it has in recent months. We have had very few requests to reopen contracts off cycle, and so far we have been able to hold the line against those situations for the reasons that I articulated at the beginning.
Just to echo Nate's comments, thank you all again for being here in California and working with Cigna with us. I just wanted to open it up. Are there any investors that have questions at this time? All right, maybe I'll kick things off then. Having on the cost of enterprise leverage, which sounds like an exciting opportunity for the company, you highlighted an incremental revenue opportunity of $10 billion- $20 billion from using Evernorth for more of Cigna's total cost of care. What solutions within Evernorth today can you better penetrate within your insured client base? Once you do have pharmacy sold in, does it make it easier to get the client to add additional services? Have you seen any evidence of that?
Sure. Yeah, the cross-enterprise leverage opportunity we talked about at our Investor Day is a big opportunity for The Cigna in aggregate. As you mentioned, we see over the strategic horizon the opportunity to add up to $20 billion of revenue to the franchise. Our longer-term guidance assumes that we execute against about 10% of that. The additional 10% would be upside that we haven't contemplated in our guidance. The areas that we're particularly excited about there would be, for one, there are certain services which are going to grow at a more rapid rate than others where we already have penetration. Think mental health services, virtual care capabilities, et cetera. We're going to get some natural lift from that.
Two, there are certain clients today who maybe only have a medical relationship with us, or they may have medical and pharmacy, but they don't have the other care services yet. Those represent opportunities for attachment of additional services. We're seeing more and more demand from our employer clients not to buy a single point solution from a vendor, but to buy something that's coordinated and orchestrated by a singular party, meaning us. We're seeing more and more demand for that to attach more services. Finally, we'll have some new services that we introduce, either that we develop organically or that we purchased inorganically in the two M&A priorities I talked about earlier that will allow us to see growth in that cross-enterprise leverage. The final thing I'd highlight is that as the Cigna Healthcare book grows, the pie gets bigger with which we can attach the Evernorth capabilities to.
You get value from additional services on existing clients, and then you get value from the Cigna Healthcare pie growing.
Great. It sounds like there are a lot of different ways to attack that opportunity. I'll turn it back to you, Nate. Are there any final questions? Let me just check. Are there any other questions from the audience at this time? All right. Go ahead, Nate.
Sure. Maybe we're in the minutes we have left. I have two to three more that I wanted to hit if we have some time. First, on the 2022 guidance, sort of a two-part question. You reiterated the guidance at the Analyst Day. I don't know if you could maybe talk to what you've seen from a utilization standpoint in the second quarter and how that's played out relative to your expectations. Then more of a high-level question related to utilization. Hospital admissions still aren't back to pre-pandemic levels. Looking at indicators of demand, diagnostic rates, screening rates, stuff like that, it doesn't seem like there's pent-up demand in the system. What do you think might explain that difference?
Yeah, so relative to the 2022 guide, and then I'll get to the second piece. You're right. We reaffirmed our full-year 2022 EPS outlook at at least $22.60 per share at the Investor Day that we held 11 days ago and continue to be fully confident in our ability to execute against that commitment. Sitting here in mid-June, a couple of months into the quarter, understanding that the final month is still uncertain, and there's clearly a lot of decisions that also are made relative to where we set risk adjustment accruals and other things. The first couple of months of the quarter, when I look at the totality of both the enterprise as well as the subcomponents, are running in line to slightly favorable to our expectations stepping into the quarter.
We thought it was prudent to reaffirm our full-year guidance, again, having respect for the fact that there's still another month to go and our expectation that we're going to continue to make strategic investments in the back half of the year. That's how I would encourage you to think about the 2022 picture as we sit here today in the middle of June. As it relates to the secondary part of the question in terms of how do you square up what seems like lower admissions with other indicators, we have seen in our data and our book of business, preventive care is at pre-pandemic levels, if not stronger. Diagnostics and screening similarly. We do not see any evidence of acuity spikes to come in the future or pent-up demand to come in the future.
In terms of how do you explain that, I think there are a couple of things I might offer. One is we, at least at The Cigna , have been intensely focused on site-of-care optimization. There have been a number of services that historically were consumed inpatient that are now consumed outpatient. We think that's a structural change in a number of instances. The one I've highlighted in other settings has been knee and hip replacements. Used to be 80% inpatient, 20% outpatient. That has reversed. Now it's 20% inpatient, 80% outpatient in round numbers. That's an example of site-of-care optimization that allows you to reconcile at least partially the point you're trying to make. We also think there was probably some unnecessary inpatient admits when you rewind the clock to a pre-pandemic basis.
Again, in our book of business, we don't see any signs of acuity spikes or pent-up demand that's on the horizon.
Great. The last one that I had, and then we can wrap up if there are no audience questions. The Cigna Healthcare margins, maybe a little bit below kind of the long-term range that you have. I guess how do you see that playing out over the next several years? One of the questions that we have is, the government businesses and maybe particularly Medicare Advantage have been competitive markets. I guess, are you willing to maybe accept lower margins for a period of time to get higher growth in those markets and kind of get back to that membership growth and revenue growth target that you have? Can you maybe just talk about your approach to that trade-off between margins and potentially faster growth?
Sure. For the Cigna Healthcare segment, our target margin is 9% to 10% on a long-term basis. This year, our margin will end in the mid to high 8% relative to that 9% to 10%, so slightly below, which gives us the opportunity for some further margin expansion in 2023. We currently would expect to capture a portion of that. Importantly, if you bifurcate the Cigna Healthcare book of business a bit, the US commercial piece of the business is operating near target margins, so we only need a little bit of further margin expansion there. We would expect to get some of that with pricing actions going forward.
The government business is still operating below its respective target margins, and we would expect 2023 more likely to continue to operate below its target margins as we continue to make outsized investments, particularly in the Medicare Advantage and individual exchange businesses, whether that's geographic expansion, whether that's technology, whether that's people. We would expect that business will, in 2023, continue to operate below its long-term target. That gives us opportunity on a multi-year basis to creep up towards the midpoint of the 9% to 10% all-in Cigna Healthcare range. To your question on the elasticity or the willingness to trade some profit for some volume, we make those decisions on a geography-by-geography basis when we're submitting our Medicare bids or we're setting our individual pricing. Importantly, if there's a meaningful amount of elasticity between a 1% or 2% margin move, we might consider that.
We're also not willing to run at a zero margin for an extended period of time. We would fully expect that business on a glide path to achieve 4% to 5% margins in Medicare Advantage and 4% to 6% in the individual exchange.
Awesome. I think we're up on time. Brian, thank you so much for joining us this morning. I really appreciate it. It was very helpful. Sorry I couldn't be there in person.
Thank you for the time, Nate.
Have a good day.
Thank you.
Take care.