Oscar Health Inc (OSCR) 2024 Q2 法說會逐字稿

Good morning, everyone. My name is Ellie, and I will be your conference operator for today. At this time, I would like to welcome everyone to the Oscar Health's second-Quarter 2024 earnings conference call. Please note that this call is being recorded. (Operator Instructions) Thank you. I will now turn the conference over to Chris Potochar, Vice President of Treasury and Investor Relations. You may now begin.

大家早安。我叫艾莉，今天我將擔任你們的會議操作員。此時此刻，我歡迎大家參加奧斯卡健康公司 2024 年第二季財報電話會議。請注意，此通話正在錄音。（操作員說明）謝謝。我現在將會議交給財務和投資者關係副總裁克里斯·波托查爾 (Chris Potochar)。你現在可以開始了。

Good morning, everyone. Thank you for joining us for our second-quarter 2024 earnings call. Mark Bertolini, Oscar's Chief Executive Officer; and Scott Blackley, Oscar's Chief Financial Officer, will host this morning's call. This call can also be accessed through our Investor Relations website at ir.hioscar.com. Full details of our results and additional management commentary are available in our earnings release, which can be found on our Investor Relations website at ir.hioscar.com.

大家早安。感謝您參加我們的 2024 年第二季財報電話會議。馬克貝爾托里尼，奧斯卡執行長；奧斯卡首席財務官斯科特布萊克利 (Scott Blackley) 將主持今天上午的電話會議。您也可以透過我們的投資者關係網站 ir.hioscar.com 存取本次電話會議。有關我們業績的完整詳細資訊和其他管理層評論，請參閱我們的收益報告，該報告可在我們的投資者關係網站 ir.hioscar.com 上找到。

Any remarks that Oscar makes about the future constitute forward-looking statements within the meaning of safe harbor provisions under the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by those forward-looking statements as a result of various important factors, including those discussed in our quarterly report on Form 10-Q for the period ended March 31, 2024, filed with the Securities and Exchange Commission and other filings with the SEC, including our quarterly report on Form 10-Q for the quarterly period ended June 30, 2024, to be filed with the SEC. Such forward-looking statements are based on current expectations as of today. Oscar anticipates that subsequent events and developments may cause estimates to change. While the company may elect to update these forward-looking statements at some point in the future, we specifically disclaim any obligation to do so.

Oscar 對未來所做的任何言論均構成 1995 年《私人證券訴訟改革法案》安全港條款含義內的前瞻性陳述。由於各種重要因素，包括我們向美國證券交易委員會提交的截至 2024 年 3 月 31 日的 10-Q 表格季度報告中討論的因素，實際結果可能與這些前瞻性陳述所示的結果存在重大差異以及向SEC 提交的其他文件，包括我們將向SEC 提交的截至2024 年6 月30 日的季度期間的10-Q 表格季度報告。此類前瞻性陳述是基於截至目前的當前預期。奧斯卡預計後續事件和事態發展可能會導致估計發生變化。雖然公司可能選擇在未來某個時候更新這些前瞻性陳述，但我們明確表示不承擔任何這樣做的義務。

The call will also refer to certain non-GAAP measures. A reconciliation of these measures to the most directly comparable GAAP measures can be found in the second-quarter earnings press release available on the company's Investor Relations website at ir.hioscar.com. With that, I would like to turn the call over to our CEO, Mark Bertolini.

此次電話會議也將提及某些非公認會計準則措施。這些指標與最直接可比較的 GAAP 指標的調節可以在公司投資者關係網站 ir.hioscar.com 上發布的第二季度收益新聞稿中找到。說到這裡，我想將電話轉給我們的執行長馬克貝爾托里尼 (Mark Bertolini)。

Good morning. Thank you, Chris, and thank you all for joining us. This morning, Oscar reported strong second-quarter results, delivering solid performance in the first half of the year. Our positive results were driven by robust membership growth, solid and consistent execution and improved bottom line performance.

早安.謝謝你，克里斯，也謝謝大家加入我們。今天上午，奧斯卡公佈了強勁的第二季業績，上半年表現穩健。我們的正面成果得益於會員的強勁成長、紮實一致的執行以及獲利績效的改善。

Underlying our second-quarter results, we reported total revenue of $2.2 billion in the quarter, an increase of 46% year-over-year. We improved our medical loss ratio by 90 basis points year-over-year to 79%. We achieved total company adjusted EBITDA of $104.1 million a nearly $69 million improvement versus the prior year.

在第二季業績的基礎上，我們報告本季總收入為 22 億美元，年增 46%。我們的醫療損失率年減了 90 個基點，達到 79%。我們實現了公司調整後 EBITDA 總額 1.041 億美元，比前一年提高了近 6,900 萬美元。

In addition, our first half adjusted EBITDA was $323 million, a significant year-over-year improvement of $237 million. The first half of 2024 is the best six months in Oscar's history. Based on our outperformance in the first half of the year, today, we raised our full year 2024 revenue guidance by $700 million to a range of $9 billion to $9.1 billion and adjusted EBITDA guidance to a range of $160 million to $210 million.

此外，我們上半年調整後的 EBITDA 為 3.23 億美元，年比大幅成長 2.37 億美元。2024年上半年是奧斯卡史上最好的六個月。基於我們上半年的優異表現，今天，我們將 2024 年全年營收指引上調了 7 億美元，達到 90 億至 91 億美元的範圍，並將 EBITDA 指引調整至 1.6 億美元至 2.1 億美元的範圍。

In a few moments, Scott will provide a detailed review of our second-quarter results and updated 2024 guidance. First, I will share key business highlights that demonstrates strong momentum against the strategic plan we shared with you at our Investor Day.

稍後，斯科特將詳細回顧我們第二季度的業績和更新的 2024 年指導。首先，我將分享關鍵業務亮點，這些亮點體現了我們在投資者日與您分享的策略計劃的強勁勢頭。

In June, we outlined our strategy to achieve at least 20% revenue CAGR and 5% operating margin by 2027. We shared our plan to double our footprint in Oscar Insurance, significantly growing our addressable ACA opportunity through existing and new market expansion. We also doubled down on our commitment to introduce innovative products that meet the needs of our increasingly diverse member base. We declared our path to diversify Oscar's growth beyond the traditional ACA by building a leading ICHRA business.

6 月，我們制定了在 2027 年實現至少 20% 收入複合年增長率和 5% 營業利潤率的策略。我們分享了將 Oscar Insurance 業務擴大一倍的計劃，透過現有和新的市場擴張，顯著增加我們可利用的 ACA 機會。我們也加倍致力於推出創新產品，以滿足我們日益多樣化的會員群的需求。我們宣布透過建立領先的 ICHRA 業務，使 Oscar 的成長超越傳統的 ACA 多元化。

Finally, we reinforced our investment in Oscar's key asset, our technology, which continues to drive superior member experiences, operational efficiencies and affordability. Our second-quarter results increased our confidence in achieving these long-term goals. We closed the quarter with approximately 1.6 million members, a 63% increase year-over-year. Key growth drivers included strong retention, new membership in existing expansion markets, an SEP member additions as Medicaid redeterminations continued.

最後，我們加強了對 Oscar 關鍵資產（即我們的技術）的投資，該技術將繼續推動卓越的會員體驗、營運效率和可負擔性。我們第二季的業績增強了我們實現這些長期目標的信心。截至本季末，我們擁有約 160 萬名會員，年增 63%。主要成長動力包括強勁的保留率、現有擴張市場的新會員、隨著醫療補助重新確定的持續而增加 SEP 會員。

Overall utilization was in line with our expectations. We expect SEP member additions to continue into the second half of the year at a decelerated rate, as the Medicaid redetermination process is now complete in almost all of Oscar states. Our strong growth this year lays a solid foundation for 2025 as SEP members that renew become a tailwind to our results.

整體利用率符合我們的預期。我們預計 SEP 成員的增加將以減速的速度持續到今年下半年，因為幾乎所有奧斯卡州的醫療補助重新確定程序現已完成。我們今年的強勁成長為 2025 年奠定了堅實的基礎，因為續約的 SEP 會員將成為我們業績的推動力。

Oscar continues to deepen our market presence. We grew in approximately 80% of our states year-over-year. We captured more market share by leveraging our deep provider and distribution relationships and winning on experience. We drove more individuals to affordable culturally competent plans based on our deep understanding of the ACA consumer and our ability to personalize engagement through our technology.

Oscar 繼續深化我們的市場影響力。我們大約 80% 的州年增長。我們利用深厚的供應商和分銷關係並憑藉經驗贏得了更多的市場份額。基於我們對 ACA 消費者的深入了解以及透過我們的技術實現個人化參與的能力，我們推動更多的人選擇負擔得起的、具有文化競爭力的計劃。

Our powerful technology engine continues to give Oscar Insurance a unique market edge while creating strong outcomes for provider and health plan clients. For example, we introduced several campaigns that guided members to Oscar's virtual urgent care business. Our models track member search terms and records to identify individuals in need of immediate care.

我們強大的科技引擎持續為 Oscar Insurance 帶來獨特的市場優勢，同時為提供者和健康計畫客戶創造強勁的成果。例如，我們推出了多項活動，引導會員使用奧斯卡的虛擬緊急護理業務。我們的模型追蹤會員搜尋字詞和記錄，以識別需要立即照顧的個人。

The campaigns drove interventions to divert care from ER settings in brick-and-mortar urgent care, lowering member costs and driving close to $18 million worth of value to Oscar Insurance this year. In addition, we launched engagement campaigns for our +Oscar client that helped drive an 18% year-over-year increase in annual wellness visits among individuals with chronic conditions.

這些活動推動了乾預措施，將急診室的護理轉移到實體緊急護理中，降低了會員成本，並為 Oscar Insurance 今年帶來了近 1800 萬美元的價值。此外，我們也為 +Oscar 客戶發起了參與活動，幫助慢性病患者的年度健康就診量年增了 18%。

Turning to ICHRA. We continue to execute against our strategy, small and midsized businesses are struggling to offer health insurance at reasonable costs. We are working with ICHRA platforms to meet these unmet needs and make Oscar a preferred carrier of choice throughout our innovative products. The ICHRA value proposition is resonating in the market and at state policy levels. states, including Indiana and Texas, are enacting laws and considering legislation to make it easier for small businesses to adopt ICHRA. We expect other states will follow suit. State momentum keeps us bullish on ICHRA as a key solution to give consumers more choice and employers a more sustainable cost structure.

轉向 ICHRA。我們繼續執行我們的策略，中小企業正在努力以合理的成本提供健康保險。我們正在與 ICHRA 平台合作，以滿足這些未滿足的需求，並使 Oscar 成為我們創新產品的首選載體。ICHRA 的價值主張在市場和國家政策層面引起了共鳴。包括印第安納州和德克薩斯州在內的各州正在製定法律並考慮立法，以使小型企業更容易採用 ICHRA。我們預計其他州也會跟進。國家的動力讓我們看好 ICHRA 作為關鍵解決方案，為消費者提供更多選擇，為雇主提供更永續的成本結構。

Before I transition to Scott, I wanted to address the heightened attention on the ACA given the upcoming presidential election. The ACA is the fastest-growing market in health insurance and has created the largest risk pool in the industry resulting in a significantly lower cost trend than conventional employer sponsor coverage. The market serves nearly 22 million lives and has lowered the uninsured rate for small businesses from 25% and to 16% and to 7% overall.

在我過渡到斯科特之前，我想談談鑑於即將到來的總統選舉對 ACA 的高度關注。ACA 是健康保險領域成長最快的市場，並創建了業內最大的風險池，從而導致成本趨勢明顯低於傳統雇主擔保保險。該市場為近 2,200 萬人提供服務，並將小型企業的未投保率從 25% 降低到 16%，整體降低到 7%。

The ACA fills a critical gap in the insurance market and has proven its value across states. We are seeing a notable shift in sentiment from federal and state policymakers. They are moving beyond repeal and replace to creating constructive solutions that position their marketplaces to better serve more Americans.

ACA 填補了保險市場的一個關鍵空白，並已在各州證明了其價值。我們看到聯邦和州政策制定者的情緒發生了顯著轉變。他們正在超越廢除和取代的範疇，轉而創造建設性的解決方案，使他們的市場能夠更好地為更多美國人服務。

Now I want to put a finer point on enhanced subsidies. As we said at Investor Day, we expect to achieve our 2027 top line revenue and operating margin targets regardless of the outcome on enhanced subsidies. However, the continuation of enhanced subsidies is a critical bipartisan issue. Subsidies had made affordable comprehensive benefits accessible to hard-working Americans, ensuring individuals do not have to make trade-offs on basic needs like food and housing.

現在我想就加強補貼問題提出更具體的觀點。正如我們在投資者日所說，無論補貼增加的結果如何，我們都預計將實現 2027 年的營收和營業利潤率目標。然而，繼續增加補貼是一個關鍵的兩黨問題。補貼使勤奮的美國人可以獲得負擔得起的綜合福利，確保個人不必在食物和住房等基本需求上進行權衡。

Without subsidies, the uninsured rate is expected to rise significantly and will largely affect notable coverage gains in Texas, South Carolina, Mississippi, Louisiana and Georgia. Any administration, therefore, has a strong incentive to find a permanent solution Again, we see a continuation of enhanced subsidies as upside to our base plan.

如果沒有補貼，未投保率預計將大幅上升，並將在很大程度上影響德州、南卡羅來納州、密西西比州、路易斯安那州和喬治亞州的保險覆蓋率顯著提高。因此，任何政府都有強烈的動機去尋找永久解決方案 我們再次認為，繼續增加補貼是我們基本計劃的優勢。

In summary, Oscar continues to execute. The strategy we laid out is working, evidenced by strong revenue growth, improved operating margins and bottom line performance. Our outperformance in the second quarter positions us to achieve our total company adjusted EBITDA profitability target this year. I am confident we have the right team and strategy to achieve our updated 2024 guidance and long-term goals.

綜上所述，奧斯卡繼續執行。我們制定的策略正在發揮作用，收入的強勁成長、營業利潤率的提高和獲利表現就證明了這一點。我們第二季的優異表現使我們能夠實現今年公司調整後的 EBITDA 獲利目標。我相信我們擁有合適的團隊和策略來實現更新的 2024 年指導方針和長期目標。

Oscar has significant runway to grow through geographic expansion, or tech-driven products and our leadership in ICHRA. We have a strong belief in the individual market, and we have proven our ability to innovate in dynamic environments. We look forward to continuing to deliver strong results in 2024 to meet the individual market the chosen solution for all Americans.

Oscar 透過地域擴張、技術驅動的產品以及我們在 ICHRA 中的領導地位，擁有重要的發展空間。我們對個人市場抱持堅定的信念，並且我們已經證明了我們在動態環境中創新的能力。我們期待在 2024 年繼續取得強勁成果，以滿足個人市場為所有美國人選擇的解決方案。

Before I hand the call to Scott, I want to thank our Oscar team, there are the A team whose actions and hard work drive our outsized results. Scott?

在我把電話交給史考特之前，我要感謝我們的奧斯卡團隊，他們的行動和辛勤工作為我們帶來了巨大的成果。史考特？

Thank you, Mark, and good morning, everyone. We've delivered strong financial results for the first half of the year, which positions us well to achieve total company adjusted EBITDA profitability this year. Building on our strong first quarter momentum, we reported approximately $56 million of net income in the second quarter or $0.20 per diluted share. Total revenue increased 46% year-over-year to $2.2 billion in the second quarter, driven by higher membership and year-over-year rate increases, partially offset by higher risk adjustment as a percentage of premiums.

謝謝你，馬克，大家早安。我們上半年取得了強勁的財務業績，這使我們能夠在今年實現公司調整後 EBITDA 獲利能力。基於第一季的強勁勢頭，我們報告第二季淨利潤約為 5,600 萬美元，即稀釋後每股收益 0.20 美元。由於會員人數增加和費率年增，第二季總收入年增 46% 至 22 億美元，但部分被較高的風險調整佔保費百分比所抵銷。

We ended the quarter with approximately 1.6 million members, a strong increase of 63% year-over-year. Membership growth was driven by strong retention, above-market growth during open enrollment and SEP member additions.

截至本季末，我們擁有約 160 萬名會員，年比強勁成長 63%。會員的成長是由公開註冊期間的強勁保留、高於市場的成長以及 SEP 會員增加所推動的。

Turning to medical costs. The second-quarter medical loss ratio improved by 90 basis points year-over-year to 79%, primarily driven by favorable prior period development. Overall, utilization trends were in line with our expectations.

轉向醫療費用。第二季醫療損失率年減 90 個基點至 79%，主要得益於前期良好的發展。整體而言，利用率趨勢符合我們的預期。

I want to spend a moment on special enrollment. We saw significant membership growth in the second quarter. SEP member additions peaked in May and decelerated in June and July. The economics for these members have been in line with our expectations thus far. As a reminder, SEP members added in the second half of the year carry an in-year MLR headwind due to partial year risk adjustment dynamics, and the short window for utilization and risk working to occur.

我想花點時間談談特殊招生。我們在第二季度看到會員數量顯著增長。SEP 成員的增加在 5 月達到頂峰，並在 6 月和 7 月放緩。到目前為止，這些成員的經濟狀況符合我們的預期。提醒一下，SEP 成員補充說，由於部分年度風險調整動態以及利用率和風險工作的窗口期較短，下半年國土資源部將面臨年內的逆風。

We expect that the strong growth in SEP membership will be a tailwind to next year. Historically, we've had a good track record of retaining SEP members and their MLR performance in the following year has been similar to other open enrollment members.

我們預計 SEP 會員數量的強勁成長將成為明年的推動力。從歷史上看，我們在保留 SEP 成員方面有著良好的記錄，並且他們在接下來的一年中的 MLR 表現與其他公開註冊成員相似。

Turning to risk adjustment. The final CMS report for 2023 was largely consistent with our expectations resulting in only a modest increase to our risk transfer payable. We also received the first Wakely report for 2024. For full year 2024, we now expect risk adjustment as a percentage of premiums to be largely consistent year-over-year. With six months of performance behind us, our overall underwriting economics are trending well.

轉向風險調整。2023 年最終 CMS 報告與我們的預期基本一致，導致我們的應付風險轉移僅小幅增加。我們也收到了 2024 年第一份 Wakely 報告。對於 2024 年全年，我們現在預計風險調整佔保費的百分比將與去年同期基本保持一致。經過六個月的表現，我們的整體核保經濟趨勢良好。

Switching to administrative costs. The second-quarter SG&A expense ratio improved by 260 basis points year over year to 19.6% driven by higher fixed cost leverage, and variable cost efficiencies, which were partially offset by higher risk adjustment as a percentage of premiums. Our strong first-half results demonstrate that we are executing well. We delivered significant revenue growth and improved profitability, which drove a substantial year-over-year increase in net income and adjusted EBITDA in the quarter and for the first six months of the year.

轉向行政成本。在較高的固定成本槓桿和可變成本效率的推動下，第二季度的銷售、管理和行政費用率同比提高了260 個基點，達到19.6%，但風險調整佔保費的百分比上升部分抵消了這一影響。我們上半年的強勁業績顯示我們執行得很好。我們實現了顯著的營收成長和獲利能力的提高，推動本季和今年前六個月的淨利潤和調整後 EBITDA 年比大幅成長。

Second-quarter net income of approximately $56 million improved by $72 million year-over-year. Adjusted EBITDA of $104 million increased by $69 million year-over-year. First half net income of $234 million improved by nearly $289 million year-over-year. And finally, first half adjusted EBITDA of $323 million increased by $237 million year-over-year.

第二季淨利約 5,600 萬美元，年增 7,200 萬美元。調整後 EBITDA 為 1.04 億美元，年增 6,900 萬美元。上半年淨利為 2.34 億美元，年增近 2.89 億美元。最後，上半年調整後 EBITDA 為 3.23 億美元，較去年同期增加 2.37 億美元。

Shifting to the balance sheet. Our capital position remains strong. We ended the second quarter with approximately $4.1 billion of cash and investments, including $204 million of cash and investments at the parent. As of June 30, our insurance subsidiaries had approximately $1.1 billion of capital and surplus, including $655 million of excess capital, which was driven by our strong operating performance.

轉向資產負債表。我們的資本狀況依然強勁。第二季末，我們擁有約 41 億美元的現金和投資，其中包括母公司的 2.04 億美元現金和投資。截至6月30日，我們的保險子公司擁有約11億美元的資本和盈餘，其中超額資本為6.55億美元，這是由我們強勁的經營業績推動的。

Let me turn now to updates to our 2024 full year guidance. We are raising our guidance for total revenue by $700 million to a range of $9 billion to $9.1 billion, reflecting higher membership driven by SEP additions.

現在讓我來談談我們 2024 年全年指導的更新。我們將總收入指引提高了 7 億美元，達到 90 億至 91 億美元的範圍，反映出 SEP 新增會員數量的增加。

As Mark mentioned, the Medicaid redeterminations process is largely complete in almost all of our states. We now expect a medical loss ratio in the range of 80.5% to 81.5%, driven primarily by SEP member risk adjustment dynamics that I previously mentioned.

正如馬克所提到的，醫療補助重新確定過程在我們幾乎所有州都已基本完成。我們現在預計醫療損失率將在 80.5% 至 81.5% 之間，這主要是由我之前提到的 SEP 成員風險調整動態所推動的。

Switching to SG&A, we now expect a lower SG&A expense ratio in the range of 19.75% to 20.25% driven by lower risk adjustment as a percentage of premiums and greater fixed cost leverage. We continue to expect to achieve total company adjusted EBITDA profitability this year and are raising our estimate to a range of $160 million to $210 million.

轉向 SG&A，我們現在預計 SG&A 費用率將在 19.75% 至 20.25% 的範圍內降低，這是由於風險調整佔保費的百分比降低以及固定成本槓桿更大。我們仍預期今年公司調整後 EBITDA 總獲利能力將達到 1.6 億至 2.1 億美元。

In closing, we've delivered the best six months in Oscar's history. Our strong outperformance in the first half of the year demonstrates that we can achieve strong growth and improved profitability. We remain confident in our ability to achieve total company adjusted EBITDA profitability this year setting a solid foundation for the path towards our long-term targets of at least 20% top line CAGR and a 5% operating margin by 2027.

最後，我們交付了奧斯卡歷史上最好的六個月。我們上半年的強勁表現顯示我們能夠實現強勁成長並提高獲利能力。我們仍然對今年實現公司調整後 EBITDA 盈利能力充滿信心，為實現我們到 2027 年至少 20% 的營收複合年增長率和 5% 的營業利潤率的長期目標奠定堅實的基礎。

With that, I will turn the call over to the operator for the Q&A portion of our call.

這樣，我將把電話轉給接線員進行電話的問答部分。

(Operator Instructions) Steve Baxter, Wells Fargo.

（操作員說明）史蒂夫·巴克斯特（Steve Baxter），富國銀行。

I just wanted to ask about the improved guidance. So you raised the EBITDA guidance by $35 million, I think you said at the Investor Day that as of April, you were running about $40 million above plan. Just trying to square those two numbers and wondering that you've now adopted provisioning guidance around the SEP membership dynamics you discussed at the Investor Day?

我只是想問一下改進後的指導。因此，您將 EBITDA 指導提高了 3500 萬美元，我想您在投資者日說過，截至 4 月份，您的運行比計劃高出約 4000 萬美元。只是想計算這兩個數字的平方，並想知道您現在是否已經採用了圍繞您在投資者日討論的 SEP 會員動態的配置指南？

Steve, thanks for the question. So as we did the full forecast for the year, the biggest driver of the difference between where we were at $40 million ahead at the Investor Day and the guidance, midpoint is just SEP, and so I think the answer you're going to hear to most questions about what's driving the full year today is going to be SEP growth.

史蒂夫，謝謝你的提問。因此，當我們對今年進行全面預測時，投資者日的 4000 萬美元預測值與指引之間差異的最大驅動因素是 9 月份的中點，所以我認為您將聽到的答案對於今天推動全年發展的大多數問題，SEP 的成長將是其中之一。

As you may remember, the SEP growth comes with in your MLR headwind due to the partial year risk adjustment dynamics. So we're excited about the growth that we're seeing there. We're excited that we can continue to have strong performance this year and that those SEP members are actually going to be a tailwind for us as we go into 2025 as we would expect to be able to retain a significant portion of them.

您可能還記得，由於部分年度風險調整動態，SEP 的成長伴隨著 MLR 的逆風。因此，我們對在那裡看到的成長感到興奮。我們很高興今年能夠繼續保持強勁的業績，當我們進入 2025 年時，這些 SEP 成員實際上將成為我們的順風車，因為我們預計能夠保留其中的很大一部分。

Got it. And you discussed, I think, potentially a $40 million headwind if SEP membership adds exceeded what you had embedded in your initial guidance? Is there a sense you could give us on whether the full $40 million is now embedded inside the EBITDA outlook or whether it's some portion of that?

知道了。我認為，您討論過，如果 SEP 會員數量增加超過您最初指導中的預期，可能會帶來 4000 萬美元的不利影響？您能否告訴我們，這 4000 萬美元現在是否全部包含在 EBITDA 展望中，還是其中的一部分？

Yes. The -- I won't try to unmix the paint, if you will. But I think that the point here is, we've now embedded our expectations for -- we've seen strong SEP growth in the second quarter, and we're now expecting to see continued growth in membership through the rest of the year, but at a slower pace than what we saw in the second quarter.

是的。如果你願意的話，我不會嘗試分解油漆。但我認為這裡的重點是，我們現在已經融入了我們的預期——我們在第二季度看到了 SEP 的強勁增長，並且我們現在預計在今年剩餘時間內會員數量將持續增長，但速度比我們在第二季看到的要慢。

Jessica Tassan, Piper Sandler.

傑西卡·塔桑，派珀·桑德勒。

Congrats on the good results. Can -- I was hoping you could maybe talk a little bit about the 2025 request and kind of help us understand some of the divergence in the requested rate increases as states like Georgia look like they're up or request is up about 13.5% versus Texas, Missouri, 2% or 1%, respectively. So just interested if you could comment at all on the 2025 request and then also on the divergence in what seems like one geographic area of the country. Thank you.

恭喜取得好成績。可以——我希望您能談談 2025 年的請求，並幫助我們理解請求的費率增加的一些差異，因為佐治亞州等州看起來已經上漲或請求上漲了約 13.5%德克薩斯州、密蘇裡州分別為2% 或1%。因此，如果您能對 2025 年的請求以及該國某個地理區域的差異發表評論，我很感興趣。謝謝。

Jessica, how are you, I appreciate the question. So look, I think that on rate requests, obviously, those are very much driven by the local geographies, what we see in performance in market by market. So we would expect that they're always going to have differences and divergence, with respect to, you asked about Georgia specifically, I would just say that I think that's reflective of the overall market there, and it's pretty consistent with what we've seen from others as well. So I would think going forward that we would always expect that our rate actions will be responsive to local economics.

潔西卡，你好嗎，我很高興你問這個問題。因此，我認為，就利率要求而言，顯然，這些要求很大程度上是由當地地區驅動的，我們在各個市場的表現中看到了這一點。因此，我們預計它們總是會存在差異和分歧，就您具體詢問喬治亞州而言，我只想說，我認為這反映了那裡的整體市場，並且與我們的情況非常一致從別人那裡也看到了。因此，我認為展望未來，我們始終期望我們的利率行動能夠對當地經濟做出反應。

Got it. And then I just had one quick follow-up. Maybe can you talk about whether your risk adjustment assumptions for your initial 2024 members changed at all in the 2Q number or whether that increased PMPM just entirely reflects the new members added year-to-date.

知道了。然後我就進行了一次快速跟進。也許您可以談談您對 2024 年初始會員的風險調整假設在第二季度的數字中是否發生了根本變化，或者 PMPM 的增加是否完全反映了今年迄今為止添加的新會員。

Yes. Appreciate the question on risk adjustment. And I would just say that for the full year, a couple of drivers. Obviously, the addition of SEP members actually comes with a higher amount of risk transfer and that would push the risk transfer up, but on the other hand, and the predominant impact for the full year guidance is that we've seen our relative risk is actually getting closer to market average, which is why for the full year, we now expect to be closer to last year's risk adjustment as a percentage of premiums.

是的。感謝有關風險調整的問題。我只想說，全年有幾位車手。顯然，SEP 成員的增加實際上會帶來更高的風險轉移量，這會推高風險轉移，但另一方面，對全年指導的主要影響是我們看到我們的相對風險是實際上越來越接近市場平均水平，這就是為什麼我們現在預計全年風險調整佔保費的百分比將更接近去年的水平。

I think that the points I would also make there is we look at our underwriting performance, it's right on plan, the Wakely results that we got for, in the first -- for the first half of the year, confirm kind of where we think we're headed. So feel like we've got all of those factors built into our full year outlook of mid-teens risk adjustment as a percentage of premiums.

我認為我還要指出的一點是，我們看看我們的承保業績，這是正確的計劃，我們在今年上半年獲得的韋克利結果，證實了我們的想法我們出發了。因此，感覺我們已經將所有這些因素納入了我們對青少年風險調整佔保費百分比的全年展望中。

Joshua Raskin, Nephron Research.

約書亞·拉斯金，腎臟單位研究。

The first question is, how are you thinking about pricing relative to competitors for 2025, now that you've seen a little data? And then can you speak to overall market growth expectations on the exchanges for next year?

第一個問題是，既然您已經看到了一些數據，您如何考慮 2025 年相對於競爭對手的定價？那麼您能談談明年交易所的整體市場成長預期嗎？

I would just say, starting with kind of overall growth, we previously shared at the Investor Day our expectations for market growth of around 15% in 2025. We think that there's an opportunity to see that level of growth based on what we see today, which is, there'll be some, we believe, lingering effects of Medicaid redetermination, but we also see strong underlying fundamentals in the market, which include strong distribution and the benefit of having a strong enhanced subsidy program.

我只想說，從整體成長開始，我們之前在投資者日分享了我們對 2025 年市場成長 15% 左右的預期。我們認為，根據我們今天所看到的情況，有機會看到這種增長水平，即我們認為，醫療補助重新確定將會產生一些揮之不去的影響，但我們也看到市場強勁的基本面，其中包括強大的分配和強大的增強補貼計劃的好處。

So all of those factors is kind of where we anticipate the market. Obviously, we'll get through the end of this year and update our full year estimate based on kind of the -- what we see happen in the marketplace this year. But at the moment, that's where we are.

因此，所有這些因素都是我們對市場的預期。顯然，我們將在今年年底之前根據今年市場上發生的情況更新我們的全年預測。但目前，這就是我們的處境。

And our growth expectations, Josh, are built off of not just the overall market growth, but the markets that we are in and adding additional markets. And that's why we see our ability to grow greater than 20% over time three years.

喬什，我們的成長預期不僅建立在整體市場成長的基礎上，還建立在我們所處的市場和其他增加的市場的基礎上。這就是為什麼我們看到我們的能力在三年內成長超過 20%。

Thus far, Josh, when we look at other -- we're all starting to get an early preview of rates for 2025. Then I would characterize them as stable and rational and -- which is kind of what we had been expecting. So nothing unexpected in terms of what we've seen so far.

到目前為止，喬什，當我們看其他時，我們都開始提前預覽 2025 年的費率。然後我會將它們描述為穩定和理性——這正是我們一直所期待的。因此，就我們迄今為止所看到的情況而言，沒有什麼意外的。

That's helpful. And then can you just provide -- I know you mentioned a little in the prepared remarks, just an update on your CRA-related conversations. Maybe if you could start with sort of external vendor progress. And then maybe give us a sense of any membership opportunities, perhaps even in 2025.

這很有幫助。然後您能否提供一下——我知道您在準備好的發言中提到了一點，只是您與 CRA 相關對話的最新情況。也許您可以從外部供應商的進度開始。然後也許會讓我們了解是否有任何會員機會，甚至可能在 2025 年。

We will give guidance on membership for 2025 when we get there, but not until then. But however, Josh, in the partnerships we've built already and the go-to-market strategies we deployed, we've already made some changes as we learned as we went along. We've got a lot of interest, a lot of interesting opportunities in front of us. We're driving those to ground.

當我們到達 2025 年時，我們將提供關於會員資格的指導，但在那之前。但是，喬什，在我們已經建立的合作夥伴關係和我們部署的進入市場策略中，我們已經根據我們的經驗做出了一些改變。我們有很多興趣，很多有趣的機會擺在我們面前。我們正在將它們推向地面。

We're really trying to figure out overall distribution and how that will best play out over time and how we need to look at the two level sale, first the employer, and then through the brokers and getting people into plans, but so far, our learnings have been strong. Our interest continues to grow in the opportunity here. And by 2025, we believe we'll have some very positive results coming into the year.

我們確實在努力弄清楚整體分配以及隨著時間的推移如何最好地發揮作用，以及我們需要如何看待二級銷售，首先是雇主，然後透過經紀人並讓人們參與計劃，但到目前為止，我們的學習成果很豐富。我們對這裡的機會越來越感興趣。到 2025 年，我們相信我們將在這一年取得一些非常積極的成果。

Adam Ron, Bank of America.

亞當‧羅恩，美國銀行。

If I dig into the guidance changes on revenue in MLR, it looks like the incremental revenue I'm backing into like 85% MLR versus the 80.7% in the prior guidance. And so if that's all related to SEP, that would be roughly like 400 basis points of difference in MLR on those members versus what you expected to have coming into the year. First is that delta right?

如果我深入研究 MLR 收入指引的變化，我會發現我支持的增量收入為 85% MLR，而先前的指引為 80.7%。因此，如果這一切都與 SEP 有關，那麼這些成員的 MLR 與您今年的預期相差約 400 個基點。首先，那個三角洲是對的嗎？

And second, how does that compare in prior cycles, the difference between what you saw in SEP members and returning members? Just any color there on how SEP members inside of your expectations are trending versus prior periods.

其次，與先前的周期相比，您在 SEP 成員和回歸成員中看到的差異如何？任何顏色都可以顯示您期望的 SEP 成員與之前時期相比的趨勢。

Yes. So the additional SEP membership growth that is now embedded in our full year outlook does have higher MLR implications. And so while we anticipate similar shape of seasonality next year or for the rest of this year, it's going to be similar to what we saw last year, probably with a little bit steeper slope. So that's kind of what we would anticipate for MLR for the second half.

是的。因此，現在納入我們全年展望的 SEP 會員數量的額外增長確實對國土資源部產生了更高的影響。因此，雖然我們預計明年或今年剩餘時間會出現類似的季節性形狀，但它將與我們去年看到的情況類似，可能斜率會更陡。這就是我們對 MLR 下半年的期望。

With respect to performance of SEP members, SEP members that we're getting are -- I think it's interesting. They're three to four years, on average, younger than the overall population. They tend to be healthier, which is one of the reasons why when we retain them into the second year and as those members start to engage in getting their PCP and pharmacy benefits all into the system and we're able to risk or those things, they start to look a lot like the open enrollment numbers.

關於 SEP 成員的表現，我們得到的 SEP 成員——我認為這很有趣。他們平均比總人口年輕三到四歲。他們往往更健康，這就是為什麼當我們將他們保留到第二年時，當這些成員開始將他們的 PCP 和藥品福利全部納入系統時，我們能夠承擔這些風險，它們開始看起來很像公開招生人數。

With respect to this year's the performance so far, we've really we anticipated that with more members coming from Medicaid redetermination, they may have higher utilization than what we've seen with SEP members in the past. We have seen some evidence that, that is the case. We see some higher usage of the ER, for example. But Importantly, the overall economics for those members are right in line with what we had anticipated. And so we're pleased thus far with the performance of the book.

就今年迄今為止的表現而言，我們確實預計，隨著更多的成員來自醫療補助重新確定，他們的使用率可能會比我們過去看到的 SEP 成員更高。我們已經看到一些證據表明情況確實如此。例如，我們看到 ER 的使用率較高。但重要的是，這些成員的整體經濟狀況符合我們的預期。到目前為止，我們對這本書的表現感到滿意。

I would just add, it's not all medical cost. It's the revenue impact as well, not getting the risk adjusters in. And secondly, the mix you don't understand the mix through the whole year that have come through in our reporting. So I don't think it's exactly incremental math to come up 4.5%.

我想補充一點，這並不全是醫療費用。這也是對收入的影響，而不是讓風險調整者參與。其次，你不了解我們報告中全年的情況。所以我認為 4.5% 的成長並不完全是增量數學。

Fair. No, I appreciate the color. And then two clarification questions that I'll squeeze into one. You mentioned in the release that MLR increase or decrease year-over-year was primarily due to favorable prior period developments. So if you could just explain that. And then second, on the preliminary rate filings, I think they should all be public now. So and you might have covered this at the Investor Day, but can you just go over if there's any new states or geographies in 2025?

公平的。不，我很欣賞這個顏色。然後我將把兩個澄清問題合併為一個。您在新聞稿中提到，MLR 年比增加或減少主要是由於前期的有利發展。所以如果你能解釋一下的話。其次，關於初步費率申請，我認為它們現在應該全部公開。那麼，您可能已經在投資者日討論過這一點，但是您能否回顧一下 2025 年是否有任何新的州或地區？

Yes. With respect to prior period development, we did have favorable claims run out in the quarter. And that was a favorable development in terms of the MLR, roughly $36 million in the quarter of favorable PPD, and with respect to your second question, can you just ask that one more time? I want to make sure I have the right context.

是的。就前期發展而言，我們確實在本季獲得了有利的索賠。就 MLR 而言，這是一個有利的發展，有利的 PPD 季度約為 3600 萬美元，關於你的第二個問題，你能再問一次嗎？我想確保我有正確的背景。

Yes. Sorry. Just the 2025 rate filings since the preliminary numbers are out, that should indicate if you entered any new state I haven't done the analysis, but just wondering if you entered any new geographies and how that .

是的。對不起。自初步數據公佈以來，僅 2025 年費率申請，這應該表明您是否進入了任何新的州，我還沒有進行分析，但只是想知道您是否進入了任何新的地區以及如何進入。

I think that I would -- I appreciate the question now. The -- I think at this point in the year, we won't go into the geographies and the expansion plans. We'll have more to say about that as we get closer to the end of the year.

我想我會——我現在很感激這個問題。我認為在今年的這個時候，我們不會討論地域和擴張計劃。隨著年底的臨近，我們將對此進行更多討論。

But we have doubled our markets overall, but that necessarily states.

但我們的市場整體增加了一倍，但這必然表明。

Got it. Got it. All right. I appreciate all the answers.

知道了。知道了。好的。我感謝所有的答案。

(Operator Instructions) Michael Ha, Baird.

（操作員說明）Michael Ha，Baird。

Olivia Miles on for Michael Ha. So I was first interested in hearing more color on ICHRA, specifically the long-term opportunity and over the next three years. In the Investor Day, you mentioned it sits within the 12% to 14% new market and product revenue growth bucket. And given the components we backed into a roughly 100,000 ICHRA lives is making up about 20% of that new market growth over the next three years. Is that number roughly in the ballpark of what's embedded in your expectations? And is that consistent with the $75 million TAM opportunity? What is the cadence of the ramp over the next three years? Any color you can provide on that would be helpful.

奧利維亞·邁爾斯 (Olivia Miles) 替補邁克爾·哈 (Michael Ha)。因此，我首先有興趣聽到更多 ICHRA 的訊息，特別是長期機會和未來三年的機會。在投資者日，您提到它處於 12% 至 14% 的新市場和產品收入增長範圍內。考慮到我們為大約 100,000 個 ICHRA 生命提供支援的組件將佔未來三年新市場成長的 20% 左右。這個數字大致符合您的預期嗎？這與 7500 萬美元的 TAM 機會一致嗎？未來三年的坡道節奏是多少？您可以提供的任何顏色都會有所幫助。

I think that we would prefer to focus on the quarter in this call and refer you back to the Investor Day for that. We're happy to have an offline conversation about the details, but we have no updates to the ICHRA outlook in terms of TAM and opportunity. We continue to be bullish on that. And the work we've done this year has just made us even more excited about what the opportunity is there. So feel free to give the IR team a call after they can walk through the details of the IR materials.

我認為我們更願意在本次電話會議中重點關注該季度，並請您回顧一下投資者日。我們很高興就細節進行線下對話，但我們沒有更新 ICHRA 在 TAM 和機會方面的展望。我們繼續看好這一點。我們今年所做的工作讓我們對其中的機會更加興奮。因此，在了解 IR 材料的詳細資訊後，請隨時給 IR 團隊打電話。

Thanks. And if I can ask a follow-up. As we think about potential deployable capital over the next three years, I believe your implied target is around $3.1 billion. And so if I were to back out statutory capital to about a 50% and a 50% quota share assuming minimal CapEx. I'm getting around $0.5 billion of deployable capital. Is that roughly in the ballpark? And how should we expect quota share to toggle down over time?

謝謝。如果我可以問後續情況。當我們考慮未來三年潛在的可部署資本時，我相信您的隱含目標約為 31 億美元。因此，如果我將法定資本撤回約 50%，並假設資本支出最低，則保留 50% 的配額份額。我獲得了大約 5 億美元的可動用資本。大約在球場內嗎？我們應該如何預期配額份額會隨著時間的推移而下降？

Yes. I won't comment specifically on the amount of excess capital that we're projecting. But I do think that the company with positive earnings trajectory is going to be able to generate significant excess capital over the -- through 2027 and our expectations of how we would use that capital or first of all, we want to lean into organic growth wherever possible, and use excess capital to fund organic growth. Scale is great for us. It creates fixed cost leverage. It gives us the continuing ability to get into new markets and expand our business. So that's the first point that we would look for.

是的。我不會具體評論我們預計的超額資本金額。但我確實認為，獲利軌跡良好的公司將能夠在 2027 年之前產生大量超額資本，以及我們對如何使用這些資本的預期，或者首先，我們希望在任何地方都能夠實現有機增長並利用過剩資本為有機成長提供資金。規模對我們來說非常重要。它創造了固定成本槓桿。它使我們能夠持續進入新市場並擴展我們的業務。這就是我們要尋找的第一點。

And then with respect to quota share, we would expect that as we have excess capital we will rely less on quota share over time. We'll see how that plays out in terms of when we optimize around there and quota share is a very efficient way for us to help fund the growth of this business. We appreciate the partnership that we have with our reinsurance partners. So we think that's an enduring part of how we can fund the business.

然後就配額份額而言，我們預計，由於我們擁有過剩資本，隨著時間的推移，我們對配額份額的依賴將會減少。我們將看看當我們在那裡優化時會如何發揮作用，配額份額是我們幫助資助該業務成長的一種非常有效的方式。我們感謝與再保險合作夥伴的合作關係。因此，我們認為這是我們為業務提供資金的持久部分。

Thank you. We have reached the end of our Q&A session. We would like to thank everyone for attending today's conference call, and we hope you have a wonderful day. You may now disconnect.

謝謝。我們的問答環節已經結束。我們要感謝大家參加今天的電話會議，希望您有個愉快的一天。您現在可以斷開連線。