Oscar Health Inc (OSCR) 2024 Q3 法說會逐字稿

Good morning. My name is Angela and I will be your conference operator today. At this time, I would like to welcome everyone to Oscar Health third quarter, 2024 earnings conference call at this time. (operator instructions) I will now turn the conference over to Chris Potachar, Vice President of Treasury and Investor Relations.

早安.我叫安琪拉，今天我將擔任你們的會議操作員。此時此刻，我謹歡迎大家參加 Oscar Health 2024 年第三季財報電話會議。（操作員指示）我現在將會議交給財務和投資者關係副總裁 Chris Potachar。

Good morning, everyone. Thank you for joining us for our third 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.

大家早安。感謝您參加我們的2024 年第三季財報電話會議，貝爾托里尼·奧斯卡(Bertolini Oscar) 首席執行官和斯科特·布萊克利·奧斯卡(Scott Blackley Oscar) 首席財務官將主持今天上午的電話會議。

This call can also be accessed through our investor relations website at Ir dot Hioscar dotcom.

您也可以透過我們的投資者關係網站 Ir dot Hioscar dotcom 存取本次電話會議。

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 dot Hioscar dotcom.

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 dot Hioscar dotcom 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 1,995. 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 June 30th 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 September 30th 2024 to be filed with the SEC.

Oscar 對未來發表的任何言論均構成 1,995 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6 月30 日的10-Q 表格季度報告和其他文件中討論的因素，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向 SEC 提交的信息，包括我們將向 SEC 提交的截至 2024 年 9 月 30 日的季度報告（表格 10-Q）。

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.

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，而公司可能會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 third quarter earnings press release available on the company's investor relations website at Ir dot Hioscar dotcom.

電話會議還將提及某些非 GAAP 衡量標準，這些衡量標準與最直接可比較的 GAAP 衡量標準的調整可以在公司投資者關係網站 Ir dot Hioscar dotcom 上發布的第三季財報新聞稿中找到。

With that, I would like to turn the call over to our CEO Mark Bertolini.

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 positive third quarter results. Our strong results were driven by above market growth, disciplined execution and improved financial performance underlying our third quarter results. We reported revenue of $2.4 billion. A 68% increase year over year.

早安.謝謝克里斯，也謝謝大家今天早上加入我們。奧斯卡公佈了積極的第三季業績。我們強勁的業績得益於第三季業績高於市場的成長、嚴格的執行力和財務表現的改善。我們報告的收入為 24 億美元。較去年同期成長68%。

Our medical loss ratio increased 80 basis points to 84.6% with overall utilization modestly favorable. Relative to our expectations, we achieved total company adjusted EBITDA of $312 million. Year-to-date representing a $246 million increase year over year. In addition, we reported a year-to-date profit of $179 million. A $300 million improvement over the same period of last year, Oscar is executing against our plan and driving profitable growth. We remain on track to deliver total company adjusted even dot profitability and also expect to achieve net income profitability this year.

我們的醫療損失率增加了 80 個基點，達到 84.6%，整體利用率適度有利。相對於我們的預期，我們實現了公司調整後 EBITDA 總額 3.12 億美元。今年迄今年增 2.46 億美元。此外，我們報告今年迄今的利潤為 1.79 億美元。Oscar 比去年同期增加了 3 億美元，正在執行我們的計劃並推動利潤成長。我們仍有望實現公司調整後的偶點獲利能力，並預計今年將達到淨利潤獲利能力。

Our strong momentum sets a solid foundation for 2025 and positions us to achieve at least 20% revenue CAGR and 5% operating margin by 2027. Scott will review our third quarter results in a few moments. First, I will cover key business highlights. Oscar closed the first nine months of 2024 with approximately 1.65 million members. A 68% increase year over year.

我們強勁的勢頭為 2025 年奠定了堅實的基礎，並使我們能夠在 2027 年實現至少 20% 的收入複合年增長率和 5% 的營業利潤率。斯科特稍後將回顧我們第三季的業績。首先，我將介紹主要業務亮點。Oscar 在 2024 年前 9 個月擁有約 165 萬會員。較去年同期成長68%。

We added more than 73,000 members in the quarter ascp additions further decelerated. We continue to expect MLR performance of SEP members to be a tailwind in 2025 as we retain these members and engage them through our technology.

我們在本季增加了 73,000 多名會員，ascp 的增加速度進一步放緩。我們仍然預計 SEP 成員的 MLR 表現將在 2025 年成為推動因素，因為我們保留了這些成員並透過我們的技術吸引他們。

Our technology is also further optimizing our operations as we grow in the quarter, we prototyped an A I tool that extracts data to prevent fraud, waste and abuse. We also launched A I programs for Oscar providers to enhance member speed to care including a clinical intake bot that gathers information for quicker diagnoses and a feature that prepopulates preventative screening recommendations based on medical history.

隨著本季的成長，我們的技術也在進一步優化我們的運營，我們設計了一個人工智慧工具原型，可以提取資料以防止詐欺、浪費和濫用。我們還為 Oscar 提供者推出了 AI 計劃，以提高會員的護理速度，其中包括收集資訊以加快診斷的臨床攝入機器人，以及根據病史預先填充預防性篩檢建議的功能。

Our technology continues to enhance our growth and position us to efficiently scale the business. We continue to expect double digit ac a market growth through the 2025 open enrolment period year. Over year, the Oscar experience will now be available to more individuals, families and businesses in new markets across our 18 state footprint.

我們的技術不斷促進我們的成長，並使我們能夠有效地擴展業務。我們繼續預計 2025 年開放招生期間市場將達到兩位數成長。一年後，我們將在 18 個州的新市場為更多個人、家庭和企業提供奧斯卡體驗。

Oscar's expansion increases our total addressable lives to approximately 11 million an increase of 700,000 lives year over year.

Oscar 的擴張將我們的總可尋址生命增加到約 1,100 萬，比去年同期增加了 70 萬。

Our average rate increase is approximately 6% compared to 7% for the overall market. We priced for trend and expect that our discipline pricing strategy and total cost of care initiatives will drive meaningful margin expansion. Next year, Oscar is giving our fast growing and diverse member base more health insurance choices in this open enrolment. First, we launched a new multi condition plan that helps members manage diabetes, pulmonary and cardiovascular diseases together which can save members 25% or more.

我們的平均成長率約為 6%，而整個市場的成長率為 7%。我們根據趨勢進行定價，並預期我們的紀律定價策略和總護理成本措施將推動利潤率的大幅擴張。明年，奧斯卡將在這次公開註冊中為我們快速成長且多元化的會員群提供更多健康保險選擇。首先，我們推出了新的多重疾病計劃，幫助會員共同管理糖尿病、肺部和心血管疾病，可為會員節省25%或更多。

The solution builds from our diabetes care plan which has reduced member costs and is a strong performer in our book.

該解決方案基於我們的糖尿病護理計劃，該計劃降低了會員成本，並且在我們的書中表現出色。

Second. We introduced a tech first HMO that delivers frictionless experiences. Our technology addresses known pain points for members and providers like no other. HMOs. Before it, the product gives us an opportunity to access new member segments across markets. Third, we rolled out a new Spanish first solution, Buena Salud, which builds on the success of our Ola Oscar program. The solution prioritizes the preferences of Hispanics and Latinos who make up nearly third of our member base connecting them to a health care community that shares their cultural heritage.

第二。我們推出了技術優先的 HMO，可提供無摩擦的體驗。我們的技術獨一無二地解決了會員和提供者的已知痛點。HMO。在此之前，該產品使我們有機會接觸各個市場的新會員群。第三，我們推出了新的西班牙第一解決方案 Buena Salud，它建立在 Ola Oscar 計劃成功的基礎上。該解決方案優先考慮西班牙裔和拉丁裔的偏好，他們占我們會員群的近三分之一，將他們與分享其文化遺產的醫療保健社區聯繫起來。

Finally, we are making Oscar the carry of choice for employers through IRA. Employers can now offer defined contributions to their employees to access Oscar suite of products. We are working with a variety of Ira platforms to transition mid and large sized employers to the individual market industries with large populations of part time independent and gig workers are prime candidates.

最後，我們透過 IRA 使 Oscar 成為雇主的首選。雇主現在可以為其員工提供固定繳款，以獲取 Oscar 產品套件。我們正在與各種愛爾蘭共和軍平台合作，將中型和大型雇主轉變為擁有大量兼職獨立工人和零工工人的個人市場產業。

In addition, our team is partnering with stretch dollar to help small businesses with fewer than 50 employees access the ACA and drive employees sign ups during open enrolment. Most of this group is either new to insurance or is facing double digit rate increases on their small group plans. The ACA has created the largest risk pool in the industry with significantly lower cost trend and is an attractive option for businesses of all sizes.

此外，我們的團隊還與 Stretch Dollar 合作，幫助員工人數少於 50 人的小型企業存取 ACA，並在公開註冊期間推動員工註冊。該群體中的大多數人要么是保險新手，要么其小團體計劃面臨兩位數的費率上漲。ACA 創建了業內最大的風險池，且成本顯著降低，對於各種規模的企業來說都是一個有吸引力的選擇。

In summary, our plan is working Oscar is on a clear path to sustainable growth and profitability. Our consistent execution positions us to achieve our 2024 targets. Oscar has multiple pathways to achieve our long-term strategic goals and we are becoming a large scale player. We are maturing our markets, strategically growing in new markets and attracting new consumer segments.

總而言之，我們的計劃正在發揮作用，奧斯卡正在走上一條通往可持續增長和盈利的明確道路。我們一貫的執行力使我們能夠實現 2024 年的目標。奧斯卡有多種途徑來實現我們的長期策略目標，我們正在成為一個大規模的參與者。我們正在使我們的市場日趨成熟，在新市場中進行策略性成長並吸引新的消費群體。

I am confident in our growth. I am confident in the Oscar team. I am confident about the future of the individual market. Oscar's continued expansion underscores the value of the ACA for Americans across party lines.

我對我們的成長充滿信心。我對奧斯卡團隊充滿信心。我對個人市場的未來充滿信心。奧斯卡的持續擴張凸顯了 ACA 對跨黨派美國人的價值。

We are building a consumer marketplace that meets expectations for choice, quality and affordability. People want the freedom to buy and use health insurance products tailored to their needs like they do in every other part of their lives. That is what the Oscar experience is all about and what our steps toward a larger individual market creates for individuals, families and businesses.

我們正在建立一個滿足人們對選擇、品質和負擔能力的期望的消費者市場。人們希望能夠像在生活的其他方面一樣自由地購買和使用適合自己需求的健康保險產品。這就是奧斯卡體驗的意義所在，也是我們邁向更大的個人市場為個人、家庭和企業創造的成果。

Before I close, I want to thank the Oscar team for their hard work and kicking off what I am sure will be a successful open enrolment. We look forward to continuing to deliver strong results. I will now turn the call over to Scott.

在結束之前，我要感謝奧斯卡團隊的辛勤工作，並啟動了我相信將成功的公開報名。我們期待持續取得強勁成果。我現在將把電話轉給斯科特。

Thank you, Mark and good morning, everyone. Our third quarter and year-to-date results demonstrate consistent solid execution. We grew membership by 68% year over year and reported nearly 312 million of adjusted Eva and approximately $179 million of net income year-to-date total revenue increased 68% year over year to $2.4 billion in the third quarter, driven by higher membership and year over year rate increases.

謝謝你，馬克，大家早安。我們第三季和今年迄今的業績顯示了一貫的紮實執行力。我們的會員數量年增了 68%，調整後的 Eva 近 3.12 億，淨收入約 1.79 億美元。 受會員數量增加和第三季總收入年增 68%，達到 24 億美元，逐年增加。

We ended the quarter with approximately 1.65 million members. A strong increase of 68% year over year membership growth was driven by above market growth during 2024 open enrolment, strong retention and SEP member additions consistent with our expectations. Sep member editions decelerated in the third quarter.

本季末，我們約有 165 萬會員。2024 年開放註冊期間高於市場的成長、強勁的保留率以及符合我們預期的 SEP 會員增加推動了會員數量同比強勁增長 68%。九月會員版在第三季成長放緩。

Turning to medical costs the third quarter, medical loss ratio increased by 80 basis points year over year to 84.6% primarily driven by higher SEP membership and a late summer COVID uptick which were partially offset by favorable prior period development. Overall utilization trends were modestly favorable relative to our expectations.

就第三季的醫療成本而言，醫療損失率年增 80 個基點，達到 84.6%，這主要是由於 SEP 會員人數增加和夏末新冠疫情上升，但部分被前期的有利發展所抵消。整體利用率趨勢相對於我們的預期較為有利。

As we have previously stated, SEP members added in the second half of the year carry an in year. Mlr headwind primarily due to partial year risk adjustment dynamics and the short window for utilization and risk warning to occur. We continue to expect that the strong growth in CP membership will be a tailwind to next year.

正如我們之前所說，下半年新增的 SEP 成員會帶來年度影響。MLR逆風主要是由於部分年度風險調整動態以及利用和風險警告發生的時間窗口較短。我們繼續預計 CP 成員的強勁成長將成為明年的推動力。

Switching to administrative costs. The third quarter SG&A expense ratio improved by approximately 360 basis points year over year to 19% driven by higher fixed cost leverage and variable cost efficiencies.

轉向行政成本。在較高的固定成本槓桿和變動成本效率的推動下，第三季銷售、管理及行政費用率較去年同期提高約 360 個基點至 19%。

Our third quarter adjusted even a loss of approximately 12 million improved by 9 million year over year. Our strong operating results to date position us well to deliver on our total company adjusted even a profitability target this year.

我們第三季調整後的虧損約為 1200 萬美元，比去年同期減少了 900 萬美元。到目前為止，我們強勁的經營業績使我們能夠很好地實現公司整體調整後的獲利目標，甚至今年的獲利目標。

Shifting to the balance sheet, our capital position remains very strong. We ended the third quarter with approximately $3.7 billion of cash and investments including $260 million of cash and investments at the parent. Through the first nine months of the year, the parent received approximately $130 million of capital distributions from our insurance subsidiaries.

轉向資產負債表，我們的資本狀況仍然非常強勁。截至第三季末，我們擁有約 37 億美元的現金和投資，其中包括母公司的 2.6 億美元現金和投資。今年前 9 個月，母公司從我們的保險子公司收到了約 1.3 億美元的資本分配。

As of September 30, 2024, our insurance subsidiaries had approximately $1 billion of capital and surplus including $575 million of excess capital which was driven by our strong operating performance. We continue to believe our excess capital positions us well to fund future growth and allows us additional opportunities to optimize our capital position over time.

截至2024年9月30日，我們的保險子公司擁有約10億美元的資本和盈餘，其中包括5.75億美元的超額資本，這是由我們強勁的經營業績推動的。我們仍然相信，我們的過剩資本使我們能夠很好地為未來的成長提供資金，並讓我們有更多機會隨著時間的推移優化我們的資本狀況。

Let me now turn to updates to our 2024 full year guidance. We are raising our guidance for total revenue by another $200 million to a range of $9.2 billion to $9.3 billion, reflecting higher membership driven by SEP member editions and more favorable lapse rates as compared to our expectations. Our revenue guidance has increased by $900 million. Since our initial guidance. Earlier this year, we now expect a medical loss ratio towards the high end of our prior range of 80.5 to 81.5% driven primarily by the SEP membership risk adjustment dynamics that I mentioned previously.

現在讓我來談談我們 2024 年全年指導的更新。我們將總收入指引再上調 2 億美元，達到 92 億至 93 億美元的範圍，這反映出 SEP 會員版推動的會員數量增加以及與我們預期相比更有利的失效率。我們的收入指引增加了 9 億美元。自從我們最初的指導以來。今年早些時候，我們預計醫療損失率將接近先前範圍的高端 80.5% 至 81.5%，這主要是由我之前提到的 SEP 會員風險調整動態所推動的。

We continue to expect risk adjustment as a percentage of premiums to be largely consistent year over year switching to SG&A, we now expect an even lower SG&A expense ratio in the range of 19.4% to 19.6% driven by greater fixed cost leverage. We expect total company adjusted EBITA to be towards the high end of our range of $160 million to $210 million.

我們繼續預期風險調整佔保費的百分比將與去年同期基本保持一致，轉向 SG&A，我們現在預計由於固定成本槓桿更大，SG&A 費用率會更低，在 19.4% 至 19.6% 的範圍內。我們預計公司調整後的 EBITA 總額將接近 1.6 億至 2.1 億美元區間的高端。

And in addition, we expect to achieve net income profitability this year. Another important milestone for Oscar.

此外，我們預計今年將實現淨利獲利。奧斯卡的另一個重要里程碑。

Looking ahead to 2025 we are encouraged by our competitive positioning and expect meaningful margin expansion to be driven by our disciplined pricing strategy, total cost of care initiatives and administrative savings. We look forward to sharing additional details when we provide 2025 guidance during our fourth quarter call with that, I'll turn the call over to the operator for the Q&A portion of the call.

展望 2025 年，我們的競爭地位令我們感到鼓舞，並預期我們嚴格的定價策略、總護理成本計劃和行政節省將推動利潤率大幅增長。我們期待在第四季度電話會議期間提供 2025 年指導時分享更多詳細信息，我會將電話轉交給接線員進行電話問答部分。

(Operator instructions) Steven Baxter with Wells Fargo.

（操作員說明）富國銀行的 Steven Baxter。

Hi, thanks. Good morning. I was hoping you could expand a little bit on your competitive positioning for 2025. You know, I appreciate you said 6% rate increase in the market at seven. It does seem like there's a bit of a barbell out there. You have certain players that are pricing closer to flat, maybe due to minimum MLO requirements or something of that nature. And then also some larger players that seem like they're essentially restructuring their book. I'd love if you could characterize how the competitive environment looks now versus how you might have thought it looked, you know, call it three or six months ago. Thanks.

你好，謝謝。早安.我希望您能在 2025 年擴大自己的競爭定位。你知道，我很欣賞你說七點市場利率上漲 6%。看起來確實有點像槓鈴。有些玩家的定價接近持平，可能是由於最低 MLO 要求或類似性質的原因。然後還有一些較大的參與者，他們似乎基本上正在重組他們的書。如果您能描述一下現在的競爭環境與您可能認為的（三、六個月前的）競爭環境，我會很高興。謝謝。

Thanks, Steven. I would point out first that our average rate increases about 6% versus the market at seven.

謝謝，史蒂文。我首先要指出的是，我們的平均利率比市場的 7% 上升了約 6%。

And we think that the market is largely rational and stable from a pricing standpoint. Again, I would remind people that you have to think about where your pricing is versus you were in prior years. It's yours. It's, it's a, it's a series of time series that you have to watch. And so we believe everybody's in a good place. There are always a few players in a few markets who chase after share. We don't think that's sustainable. And, and we believe that the market is going to be a pretty stable market this year. We're confident in that.

我們認為，從定價的角度來看，市場基本上是理性和穩定的。我再次提醒人們，你必須考慮你的定價與前幾年相比。這是你的。這是，這是，這是一系列你必須觀看的時間系列。所以我們相信每個人都處於一個好的位置。少數市場中總會有少數玩家追逐份額。我們認為這是不可持續的。而且，我們相信今年市場將會是一個相當穩定的市場。我們對此充滿信心。

Okay. Got it. And just to just expand a little bit on the SEP pressure I appreciate the commentary that the additions decelerated during the quarter. But I guess just to understand why there's more pressure than you might have thought before. Are there still more lives in aggregate than you expected? Or are there costs higher than you expected? Or is the risk adjustment impact worse than you thought for some reason? Just trying to understand that piece of it a little better too. And if you're willing to size the drag from SEP inside your EBIT guidance, obviously, you know, appreciate that level of insight too. Thanks.

好的。知道了。為了稍微擴大一下標準必要專利的壓力，我很欣賞有關本季新增數量放緩的評論。但我想只是為了理解為什麼壓力比你之前想像的還要大。生命總數是否仍比您預期的還要多？或者成本是否比您預期的要高？或者由於某種原因，風險調整的影響比您想像的更嚴重？只是想更好地理解這一部分。如果您願意在息稅前利潤指引中評估 SEP 的拖累，顯然您也很欣賞這種洞察力。謝謝。

Yeah, good morning, Steve. So, with respect to SCP, obviously, we increased our, our top line revenue guidance, which is reflective of the fact that we've had more SEP additions than what we had anticipated at the beginning of the year and even through the third quarter, the performance of, of the SEP members has been, and right on track with what we would expect. You know, utilization has been on track with our expectations to slightly favorable. So, you know, the story, I think for the quarter is, you know, performance underwriting performance of the book is, you know, strong in what we would have anticipated. And the story is just, we've got more of these members than we entered, had initially expected. You're seeing that both in the top line as well as in the bottom line performance of the company. And, you know, we do anticipate that the growth that we've seen is slowing and will slow into the fourth quarter. We've seen that deceleration already occur.

是的，早上好，史蒂夫。因此，就 SCP 而言，顯然，我們增加了我們的頂線收入指導，這反映了這樣一個事實：我們的 SEP 增加量比我們年初甚至第三季度的預期要多SEP 成員的表現一直符合我們的預期。您知道，利用率已步入正軌，符合我們的預期，略有改善。所以，你知道，我認為這個季度的故事是，你知道，這本書的承保業績是，你知道，強於我們的預期。故事是這樣的，我們的成員數量比我們最初預期的要多。您可以在公司的營收和利潤表現中看到這一點。而且，您知道，我們確實預計我們所看到的成長正在放緩，並將放緩到第四季度。我們已經看到減速已經發生。

And do you want to repeat your the second part of your question on just to David?

您想只向大衛重複問題的第二部分嗎？

We'll come back to that one, I guess later in the call.

我想我們稍後會在電話會議中再討論這個問題。

John Ransom with Raymond James. Your line is now open.

約翰·蘭塞姆和雷蒙德·詹姆斯。您的線路現已開通。

Hey, good morning. So my first question before the follow up, I mean, going back to your Analyst day, I mean, you provided a road map to 20% CAGR to 2027. Now that the revenue base is higher, should we think about that 20% CAGR coming off the higher revenue base or is there some adjustment that would kind of put that 27 number right where you started?

嘿，早安。所以我在跟進之前的第一個問題，我的意思是，回到你的分析師日，我的意思是，你提供了到 2027 年複合年增長率 20% 的路線圖。既然收入基礎更高了，我們是否應該考慮在更高的收入基礎上實現 20% 的複合年增長率，或者是否需要進行一些調整，將 27 的數字調整到你開始的位置？

Yeah, good morning. Look, I think that the long term guidance, we're not going to make a update to that. I would say that, you know, we are encouraged by our performance year-to-date in terms of growth. I think that sets us up well, to achieve 20% keg or through 27. We'll give you some more information about 25 when we do the fourth quarter call this year. But I think that, you know, we won't be making any updates to the long term guidance at this time.

是的，早安。看，我認為長期指導，我們不會對其進行更新。我想說的是，我們對今年迄今的成長表現感到鼓舞。我認為這讓我們做好了準備，達到 20% 的目標或通過 27。當我們進行今年第四季的電話會議時，我們將向您提供有關 25 的更多資訊。但我認為，您知道，我們目前不會對長期指導進行任何更新。

Great. And then my second question is if we just think about 24 should we apply the higher, you know, you talk about like a 90% MLR for SEP members, which should we attach that to say the revenue upside or is there more revenue that you're generating this year where your MLR would expect to lift? And the 25.

偉大的。然後我的第二個問題是，如果我們只考慮24，我們是否應該應用更高的，你知道，你所說的SEP 會員的90% MLR，我們應該附加它來說明收入上升還是有更多的營收今年您的 MLR 預計會提升多少發電量？還有25號。

I think that if you kind of the average the MLR and look at our full year guidance, you know, we do have SEP pressure that's probably outsized compared to, you know, what we would anticipate in the future given the amount of Medicaid redetermination that's coming in. So, you know, all things equal, the performance of the core book has been, you know, very much consistent with our expectations this year. So, you know, I would anticipate that absent SCP you would have seen, you know, a lower MLR in the range of a little over a point for the full year.

我認為，如果您計算 MLR 的平均值並查看我們的全年指導，您就會知道，我們確實面臨 SEP 壓力，與我們未來預期的醫療補助重新確定量相比，該壓力可能過大。所以，你知道，在所有條件相同的情況下，核心書的表現與我們今年的預期非常一致。所以，你知道，我預計如果沒有 SCP，你會看到全年 MLR 較低，略高於一點。

(Operator instructions) Jessica Tassan with Piper Sandler.

（操作員說明）傑西卡·塔桑和派珀·桑德勒。

Hi. Thank you guys for taking the question. I guess I would start with just the, the guide looks like it implies either medical claims expense, It's flat PM quarter over quarter or that risk adjustment payable shrinks quarter over quarter. I guess, can you just help us understand why either of those two things might occur? Especially if the third quarter, claims expense included some favorable prior period development, which, which wouldn't repeat in the fourth quarter.

你好。謝謝你們提出問題。我想我會從這個開始，該指南看起來意味著要么是醫療索賠費用，要么是季度比季度持平，要么是應付風險調整季度比季度減少。我想，你能幫助我們理解為什麼會發生這兩件事嗎？特別是如果第三季的索賠費用包括一些有利的前期發展，這種情況在第四季不會重複。

Yeah.

是的。

Appreciate that question. And, you know, looking at the implied fourth quarter, Mlr, I would just make a couple points. One, I called out some of the, the drivers in the third quarter that, you know, specifically COVID, which really was a third quarter phenomenon. We saw that spike and then, conclude before the end of the third quarter, So that won't continue. We expect SCP additional will be, you know, considerably lower in the fourth quarter. So we won't have that additional pressure. And then we have, you know, some payment integrity initiatives that we've been executing throughout the year, but are particularly picking up into the fourth quarter. So all those things we would anticipate will, will result in a you know, flatter growth in the fourth quarter versus kind of what we've seen historically. And I know the guide points for the guidance that we put out.

感謝這個問題。而且，你知道，看看隱含的第四季度，Mr，我只想提出幾點。一，我指出了第三季的一些驅動因素，特別是新冠肺炎，這確實是第三季的現象。我們看到了這個峰值，然後在第三季末之前結束，所以這種情況不會繼續下去。我們預計第四季度的 SCP 附加價值將大大降低。所以我們不會有額外的壓力。然後，您知道，我們全年都在執行一些支付誠信舉措，但特別是在第四季度有所加強。因此，我們預計的所有這些事情將導致第四季度的成長與我們歷史上看到的情況相比更加平坦。我知道我們提出的指導方針的指導要點。

Got it and then just can you maybe help us understand how your risk adjustment practice has kind of evolved over the last two years. And just how the risk adjustment and kind of process and also forecasting or just accounting has changed over the last two years to make it more accurate and higher fidelity to the ultimate reconciliation. Thank you.

明白了，那麼您能否幫助我們了解您的風險調整實踐在過去兩年中是如何演變的。在過去兩年中，風險調整、流程類型以及預測或會計發生了怎樣的變化，以使其更準確、對最終對帳的保真度更高。謝謝。

Yeah, I think on, on risk adjustment you know, this is an area where we do have a lot of history and strong modelling practices. You know, risk adjustment is always the most complicated estimate to make in our financial statements because we have to predict both our own risk score as well as the risk score of the market and do that calculation every quarter on a cumulative basis. We do get the weekly information that helps us a lot with the our relative position to the market.

是的，我認為，在風險調整方面，我們確實擁有豐富的歷史和強大的建模實踐。您知道，風險調整始終是我們財務報表中最複雜的估計，因為我們必須預測我們自己的風險評分以及市場的風險評分，並且每個季度都進行累積計算。我們確實獲得了每週的信息，這對我們了解我們相對於市場的地位有很大幫助。

But, you know, we use that as an input to our modelling. And I would say that we've had a very consistent methodology for risk adjustment that has served us well. We've been fortunate to have very stable estimates with respect to risk adjustment. But, you know, I I'd always want to caution it is the most challenging estimate that we have to make and there is a high level inherent volatility. But, you know, we do have strong practices, consistent practices that we've been following for several years.

但是，您知道，我們使用它作為建模的輸入。我想說的是，我們有一個非常一致的風險調整方法，這對我們很有幫助。我們很幸運能夠對風險調整有非常穩定的估計。但是，你知道，我總是想提醒大家，這是我們必須做出的最具挑戰性的估計，並且存在著很高的固有波動性。但是，你知道，我們確實有強大的實踐，多年來我們一直遵循的一致實踐。

(Operator instructions) Joshua Raskin with Nephron Research.

（操作員說明）Joshua Raskin 與 Nephron Research。

Hi, thanks. First one, I guess I have to ask because it's so top of mind. But the investor day, you laid out that path to $2.25 in EPS and you included the assumption that the extended subsidies would indeed Sunset. Has there been any change in your thinking? Around that assumption or maybe any change in the estimated impact or, you know, no changes to the 225.

你好，謝謝。第一個，我想我必須問，因為這是最重要的。但在投資者日，您制定了每股收益 2.25 美元的路徑，並假設延長補貼確實會取消。你的想法有什麼改變嗎？圍繞著這個假設，或估計影響可能發生任何變化，或者，你知道，225 沒有變化。

We haven't made any changes to 25 Josh but let me add a few points around it. We believe that both parties have an incentive to ensure that the program continues. You know, we're currently at a historic low in the US of below 8% of uninsured. Going the other way would only confound the inflationary impacts that the current race focused around and resulted in the President Trump, former President Trump being re-elected President. And so we believe that they have as much, the Republicans have as much an interest in figuring out subsidies. Now, it would be exactly the same as they are now, probably not. There may be a change at the top end, there may be shifts within the, within the bands. But when you think about what's required and that 63% of our membership in the ACA comes from red states and red states for them that we know of are already standing up their own state based exchanges that A, this is a product that's here to stay. And B there is every intention to make sure that we don't create an inflationary pressure as a result of pulling back subsidies and pushing people out of health care and into uncompensated care or even worse. Having them pull out of pocket, and increase their burden at home and being able to afford food, gasoline and entertainment.

我們還沒有對 25 Josh 做任何改變，但讓我補充幾點。我們相信雙方都有動力確保該計劃繼續下去。您知道，目前美國未投保的比例低於 8%，處於歷史最低水準。走另一條路只會混淆目前競選所關注的通膨影響，並導致川普總統、前總統川普再次當選總統。因此，我們相信他們和共和黨人一樣有興趣解決補貼問題。現在，它會和現在一模一樣，可能不是。頂端可能會發生變化，頻段內可能會發生變化。但是，當你考慮到需要什麼時，我們 ACA 中 63% 的會員來自紅色州，而且我們知道這些紅色州已經建立了自己的州級交易所，A，這是一個將繼續存在的產品。B 我們盡力確保我們不會因為取消補貼、迫使人們脫離醫療保健、接受無償醫療甚至更糟的情況而造成通膨壓力。讓他們自掏腰包，增加他們的家庭負擔，讓他們有能力負擔得起食物、汽油和娛樂。

Yeah, that, that all makes sense. But I guess the base case is still, you're assuming the 225 assumes a sunset, if something were to change favorably, I guess you'd, you'd revisit that number. So, so that, I guess that's helpful.

是的，這一切都有道理。但我想基本情況仍然是，你假設 225 假設日落，如果有什麼事情發生有利的變化，我想你會，你會重新審視這個數字。所以，所以，我想這很有幫助。

And then the second question just around new product development, you know, you guys have had a couple of interesting releases. I'm, I'm specifically interested in that guided care HMO product. How that works? Are those members expected to be more or less subsidized and then perhaps any updates on ICRA and, you know, if you guys have any membership estimates for 2025 as well.

然後第二個問題是關於新產品開發的，你們知道，你們已經發布了幾個有趣的版本。我，我對那個指導護理 HMO 產品特別感興趣。這是如何運作的？這些成員預計會得到或多或少的補貼，然後可能會有 ICRA 的任何更新，你們知道，你們是否也對 2025 年的成員資格有任何估計。

So, I would start on the product sets. We, you know, we believe that our, our rolling out of new products, particularly the HMO product and the HMO product focus was on how do we make it different than HMOs in the past? And it was about around building using our digital technology to create frictionless care in the eyes of the member, which means we must facilitate the provider getting things like referrals and authorizations through digital means so that there isn't this laborious process of, review, rejections, denials come, you know, and approval. So, we've taken a hard look at how the product has worked in the past, a hard look at our own population and we believe that this frictionless HMO product will be a real opportunity.

所以，我會從產品集開始。我們，你知道，我們相信，我們推出新產品，特別是 HMO 產品，HMO 產品的重點是我們如何使其與過去的 HMO 不同？這是關於使用我們的數位技術在會員眼中創造無摩擦的護理，這意味著我們必須幫助提供者透過數位方式獲得推薦和授權等東西，這樣就不會出現這種費力的過程，審查，你知道，拒絕、否認隨之而來，然後是認可。因此，我們認真研究了該產品過去的運作方式，並認真研究了我們自己的人群，我們相信這種無摩擦的 HMO 產品將是一個真正的機會。

We're launching it in a couple of markets this year. It is our intention to use that to get back into California. We need some more work on the California side before we can present it to the regulators there. But the HMO product, we believe is in a really good place.

今年我們將在幾個市場推出它。我們打算利用它返回加州。我們需要在加州方面進行更多工作，然後才能將其提交給那裡的監管機構。但我們相信 HMO 產品處於非常好的位置。

On ICRA. We have 3,700 members as of now. With open enrolment going on as we speak in a number of a number of markets. So we're we won't get ahead of ourselves in predicting. But I will remind you that our overall three year plan had pretty low membership from the standpoint of the total revenue of the company in the plan. So we're not relying on Ira for growth we view or they hit our numbers. We're looking at it as an opportunity that could be a tipping point that could even drive our numbers higher.

關於ICRA。目前我們有 3,700 位會員。正如我們在許多市場中所說的那樣，公開註冊正在進行中。所以我們不會超前預測。但我要提醒您的是，從計劃中公司的總收入來看，我們整個三年計劃的會員數量相當低。因此，我們並不依賴愛爾蘭共和軍來實現我們認為的成長，或者他們達到了我們的數字。我們將其視為一個機會，可能成為一個轉捩點，甚至可以推動我們的數字更高。

(Operator instructions) Michael (inaudible). How with bear your line is now open?

（操作員指示）邁克爾（聽不清楚）。熊你的線路現在開通了怎麼樣？

Hey, thank you. So, one of your peers recently mentioned their expectation of industry market growth of mid single digits. They mentioned C MS implementation of that agent of record loss policy sort of impacted their view on industry growth. Also, one of your larger hospitals also mentioned 8 to 10% growth assumption. So given that all these expectations are different than your 15% growth assumption for next year, I was wondering if you could discuss your view on 15% growth next year. Is that still your view? How do you reconcile the difference between you and your peers?

嘿，謝謝你。因此，您的一位同行最近提到了他們對行業市場成長中個位數的預期。他們提到 C MS 實施記錄損失政策的代理在某種程度上影響了他們對產業成長的看法。另外，你們一家較大的醫院也提到了 8% 到 10% 的成長假設。因此，考慮到所有這些預期都與您對明年 15% 成長的假設不同，我想知道您是否可以討論一下您對明年 15% 成長的看法。這仍然是你的觀點嗎？你如何調和你和同儕之間的差異？

So we continue to expect overall ac a market to grow by double digits and open enrolment 25. So that's year over year. And we believe that's driven by continued Medicaid redeterminations and enhanced subsidies. We believe the 15% may now be at the high end of the range given what that, what C MS has done regarding strengthening of program integrity efforts. So it will have some downward pressure, but we still believe that we'll see double digit growth in the AC A market overall. And again, we are launching the new markets, we picked up 700,000 new TAM now to a total of 11 million for all of our markets that we are now open and running for an open enrolment. And again, it's obviously too early to talk about what open enrolment growth will be. But we see that as an added opportunity for us to hit the 20% cer year over year going forward.

因此，我們繼續預計整個市場將以兩位數成長，並且開放招生人數為 25。所以年復一年都是如此。我們認為，這是由醫療補助計劃的持續重新確定和補貼的增加所推動的。我們認為，考慮到 C MS 在加強計劃完整性方面所做的努力，15% 現在可能處於該範圍的高端。所以它會有一定的下行壓力，但我們仍然相信AC A市場整體會出現兩位數的成長。再次，我們正在推出新市場，我們現在為我們開放並開放註冊的所有市場增加了 700,000 個新 TAM，總計 1100 萬個。再說一次，現在談論公開招生的成長顯然還為時過早。但我們認為這是我們未來 20% cer 目標的額外機會。

Michael, just add two quick things. The, you know, because this comparison is open enrolment to open enrolment, you have to consider the fact that we've already seen substantial growth from Medicaid redetermination and you know, the just the growth for Medicaid redetermination, I think gets you to mid single digits based on information that C MS has put out. And then on top of that, you've got the fundamentals that are underlying, you know, the growth in the market that cannot be explained just by Medicaid redetermination. And we think those, you know, we're seeing those factors happening throughout the year, we would expect those to continue. And that's really the, the, you know, the impact of the enhanced subsidy strong distribution that's in place as well as you know, a growing gig economy that's bringing, you know, new lives into this marketplace. And we think all of those things, you know, are, are going to be a continued tailwind through open enrolment.

邁克爾，只需添加兩件事即可。你知道，因為這種比較是開放註冊與開放註冊的比較，你必須考慮這樣一個事實，即我們已經看到醫療補助重新確定的大幅增長，而且你知道，醫療補助重新確定的增長，我認為可以讓你達到中期基於 C MS 發布的信息的個位數。最重要的是，你已經了解了潛在的基本面，你知道，市場的成長不能只用醫療補助重新確定來解釋。我們認為這些因素全年都會發生，我們預計這些因素會持續下去。這確實是，你知道，增強的補貼和強大的分配所帶來的影響，你知道，不斷增長的零工經濟為這個市場帶來了新的生命。我們認為，所有這些事情，你知道，都將透過公開招生成為持續的推動力。

Great. Thank you very much.

偉大的。非常感謝。

And at Investor Day, when you laid out your SG&A 16% target for 27 I believe your G and a assumption for this year is over 100 bits higher at the midpoint than where it is now expected to finish the year. So just given the pace of operating cost leverage you're experiencing. Did you talk about your updated thoughts in SG&A? Are you now tracking much better than say 37 and your fixed variable split? Could you talk about the opportunity, opportunity to outperform 16% by 27? And just given the nature of broker commissions, would it be reasonable to say sort of a very low point on end state mature DNA profile would be somewhere in the low team. Thank you.

在投資者日，當你制定 27 年 SG&A 16% 的目標時，我相信你今年的 G 和假設比現在預計今年結束時的中位數高出 100 位以上。因此，考慮到您正在經歷的營運成本槓桿的步伐。您是否談過您對 SG&A 的最新想法？您現在的追蹤效果是否比 37 和固定變數分割好得多？能談談機會嗎？考慮到經紀人佣金的性質，可以合理地說，最終狀態成熟 DNA 概況的一個非常低的點將位於低團隊的某個位置。謝謝。

Yeah, Michael, I'll, I'll start off and I'll turn over to Scott. As we look at our underlying operating costs, a key lever that we need to continue to pull to a product, provide an affordable product.

是的，邁克爾，我會，我會開始，然後交給史考特。當我們審視我們的基本營運成本時，我們需要繼續推動產品的關鍵槓桿，即提供價格實惠的產品。

And as we look at the next administration, we view that opportunity as creating freedom of choice, affordability and product variation that allows people to have the plan that they believe they want. And we believe that's consistent with the aims of the incoming administration. So an important part of it, as we look at our SG&A point in time, now we have always more room to grow. And for that kind of color, I'll turn it over to Scott.

當我們展望下一屆政府時，我們認為這個機會創造了選擇自由、可負擔性和產品多樣性，使人們能夠擁有他們認為自己想要的計劃。我們相信這與即將上任的政府的目標是一致的。因此，其中一個重要部分是，當我們審視 SG&A 的時間點時，我們現在總是有更多的成長空間。對於那種顏色，我會把它交給斯科特。

Yeah. So the improvement in the SG&A ratio that we've seen this year is roughly half of that is coming from fixed cost leverage and half of that is coming from variable cost efficiencies, which I think, you know, the fact that we're able to actually drive improvements in both dynamics there. Really speak well to the opportunities for us going forward, you know, fixed cost leverage obviously is a critical part of our arriving at, you know, kind of our long term destination on SG&A ratio. And Michael you, you, you know, you said that given kind of the fact that you've got broker expenses, you've got taxes and fees that, you know, really, represent a very large share of total SGN A. You're probably in the right zip code in terms of, you know, low to mid 10s of, you know, the, the best that, that the, the efficiency could be, I think that's a reasonable estimate, but we still got significant opportunities to gain fixed cost leverage.

是的。因此，我們今年看到的 SG&A 比率的改善大約有一半來自固定成本槓桿，一半來自可變成本效率，我認為，你知道，事實上我們能夠真正推動這兩種動態的改善。真正講好我們未來的機會，你知道，固定成本槓桿顯然是我們達到 SG&A 比率長期目標的關鍵部分。邁克爾，你，你知道，你說過，考慮到你有經紀人費用，你有稅收和費用，你知道，確實代表了 SGN A 總額的很大一部分。 ，低到中十的，你知道的，最好的，效率可能是，我認為這是一個合理的估計，但我們仍然得到了顯著的結果獲得固定成本槓桿的機會。

But we also are excited about our opportunities to drive down variable costs. And a lot of the A I initiatives and other initiatives that we're running in house, really speak to making our operating processes more efficient and more scalable. So, you know, we think that we're just on the front end of being able to drive continued, you know, leverage and performance on the expense side. And.

但我們也對降低變動成本的機會感到興奮。我們內部運作的許多人工智慧計畫和其他計畫確實讓我們的營運流程更有效率、更具可擴展性。所以，你知道，我們認為我們正處於能夠持續推動費用方面的槓桿和績效的前端。和。

One more point in 25 the administration has lowered the exchange fees as well, which has been an enhancement going into the year.

政府還降低了 25 分之一的兌換費，這是今年以來的進步。

(Operator instructions) Adam Ron with Bank of America.

（操作員說明）Adam Ron，美國銀行。

Hey, thanks for the question. If we try to think about the jumping off point for MLR next year, can you help us size the favorable development this year that won't recur? And aside from that, should we assume that the point of C PM, LR that you mentioned that was dragging this year should come back or does that take a couple of years.

嘿，謝謝你的提問。如果我們試著思考明年國土資源部的起點，您能否幫助我們衡量今年不會再次出現的有利發展？除此之外，我們是否應該假設您提到的今年拖延的 C PM、LR 點應該回來，或者需要幾年時間。

Yeah, so I think that when you think about the, the MLR, you know, from the perspective in the quarter, we had favorable PPD, we had COVID, we had SCP, COVID was roughly 90 basis points year on a year over year basis in the third quarter. CP was, was higher than, you know, the impact of SEP was more pronounced than the favorable impact of prior period development. So, you know, when I look at the quarter, we were at 84.6 on MLR, probably neutralizing those three effects that I just talked about. You're somewhere in the low 83 range in terms of run rate. On MLR. And you know, as I think about the go forward impact of MLR, you know, if, if we're in the you know, mid 81 for the year given our price position, total cost of care, you know, we think there's opportunities to continue to optimize on Mlr. Obviously, there's a what you build into pricing and what you allow to fall to the bottom line. Those things always will impact the, the overall trajectory of MLR. But you know, looking at where our MLR this year is given some of the dynamics I just talked about in terms of SEP pressure. And the like, you know, we think that, that we've got a good chance to continue to improve that going forward.

是的，所以我認為，當你想到國土資源部時，你知道，從本季度的角度來看，我們有有利的 PPD，我們有新冠病毒，我們有 SCP，新冠病毒同比大約為 90 個基點以第三季為基礎。CP 高於，你知道，SEP 的影響比前期發展的有利影響更明顯。所以，你知道，當我查看本季時，我們的 MLR 為 84.6，可能抵消了我剛才談到的這三個影響。就運行率而言，您處於 83 的較低範圍內。在MLR上。你知道，當我考慮 MLR 的未來影響時，你知道，如果我們處於 81 年中期，考慮到我們的價格定位，總護理成本，你知道，我們認為繼續優化 MLR 的機會。顯然，定價中包含了一些內容，以及允許的內容屬於底線。這些事情總是會影響 MLR 的整體軌跡。但你知道，看看我們今年的國土資源部在 SEP 壓力方面的一些動態。你知道，我們認為我們有很好的機會繼續改進這一點。

And then to your point about pricing for next year, I think at your Investor Day, you said you thought that long term or at least over the next few years, the trend on the exchanges would be 3 to 5%. I think if I heard you correctly, you priced above that for next year. So curious, what, what's driving that and what, what's built into that view? Thanks.

然後談到你關於明年定價的觀點，我想在你的投資者日，你說你認為長期或至少在未來幾年，交易所的趨勢將是 3% 到 5%。我想如果我沒聽錯的話，你明年的定價就比這個價格高。很好奇，什麼，是什麼推動了這個，什麼，這個觀點內建了什麼？謝謝。

Yeah, that that absolutely is what we said and I would say that, you know, pricing is a market by market phenomena. And so, you know, in some markets we took above 6% 6% is the average. We think that our pricing allows us to drive margin improvement and also to be competitive. So those are the two things that you're always looking for. But again, that's an average and in some, you know, markets, we, we have significantly higher price increases and others lower averaging out to about 6%.

是的，這絕對是我們所說的，我想說的是，定價是一個由市場現象決定的市場。因此，您知道，在某些市場中，我們採用了 6% 以上，6% 是平均值。我們認為我們的定價使我們能夠提高利潤率並保持競爭力。所以這是您一直在尋找的兩件事。但同樣，這是一個平均值，在某些市場中，我們的價格漲幅明顯較高，而其他市場的平均漲幅較低，約為 6%。

There are no further questions and that concludes today's conference call. Thank you all for joining. You may now disconnect.

沒有其他問題了，今天的電話會議到此結束。感謝大家的加入。您現在可以斷開連線。