Centene (CNC) 26 Jul 222022 Q2 Earnings call transcript

Good day, and welcome to the Centene Corporation Second Quarter 2022 Earnings Conference Call. [Operator Instructions]. Please note, today's event is being recorded. I would now like to turn the conference over to Jen Gilligan, Senior Vice President, Finance and Investor Relations. Please go ahead, ma'am.

good and Rocco, you, morning, everyone. Thank for earnings results you joining us XXXX quarter second our conference on Thank Call. Vice Financial Sarah London, this through Officer; Executive our Operating President morning's and and Chief Executive can centene.com. Officer; and Brent call, which website Drew be will at of Centene, Officer Layton, also Chief President host Chief accessed Asher, Litigation of Any Reform the forward-looking statements constitute plans and remarks that prospects under XXXX. San of provision team the Act may the purpose make Private harbor Securities about future expectations, safe for differ results those and in XXXX, filed Actual including various those forward-looking XX-K statements materially XX, discussed may from important other indicated public as Centene's those of Form February by most SEC recent a filings. result on factors to Centene anticipates that subsequent events and estimates change. developments its may cause

XXXX to certain forward-looking point these reconciliation company measures. While do statements specifically any elect to the the of in measures our The be obligation may refer non-GAAP some so. also disclaim found quarter to we in future, can second A like over these is Sarah will at call October update calendars the your Sarah? the section. on earnings Investors the which turn I available company's CEO, mark under our that, would call With website scheduled Please XX. next conference to for our to call for release, London. press

on Jen, creation. for you, Centene joining focus everyone, with and a value thank entered Thanks, us this XXXX morning.

serve Value is that but in innovation in measured strengthening simplifying trusted and that us. our providers value not on we reminder, on operations. growth and relationships and It it and and by impact a creation it capital earnings disciplined means the communities As per our business delivers leveraging support. better have focusing the partner easier becoming at core we members means means with our to to better outcomes. creation making Centene work the fuel share, to members we local importantly, for solely allocating a

define gained team time, creation objectives down enterprise-wide efforts span momentum on and same X day-to-day well that on leadership. growth plans long-term program executing I'll XXXX a morning, scale our cover for organization of last provide has our with the months, market local and sustainable is the and recent focus quarterly doubling Over headlines the value and At our and our trajectory few health of with the This functions. on and a creation performance value work to the more updates. beyond our

on CEO first touch in what Before like call update about product handing as also for on the to few ability performance, briefly months Centene's to over my over observed to Brent I'd marketplace. differentiate an line I've the

start with the Let's quarter.

allocation, QX. June now which our in capital positioning our performance, Second a balance initiatives to contributed quarter to an Today, at Day. EPS a look guidance $X.XX, across adjusted to $X.XX year. we more enhance outlook our provides year with as guidance and full strong product balanced provided results were since to approach foundation we lines directly half the first of to Investor the management cumulative with of again business, line medical excellent increased to Thoughtful build once at represents we increase which from $X.XX all the

full details improved quarter hear this the from Drew will year outlook shortly. about You and more

full value steam front, the creation are On we ahead.

in You've team close his Myriad now tracking with a Murray heard are quite leaders. and business the Jim about initiatives our in-flight bit partnership supporting and

management. redesign on quality work see and model to continue our utilization process-driven key solid well operating efforts our functions We as optimize progress to like as

portfolio weeks In Investor closing center across RFP milestone the pharmacy in another establish to our out divestiture, the to continues health plan review handful June the we our key on Our Panther of a since work. of completed remains process advance PBM and Day, plans track. excellence the

review the active, our evolving forward. across the very or investment, care divestiture is proceeds team through France. plans, is deployment and net important strategic the asset third signing well million private remainder the Sante, is highlighting we repurchase strategic As Salud, We ensuring from maximum stock action for a Yesterday, portfolio the QX $XXX of hospital largest non-health Vivaldo Central proceeds worth previously of announced position plan and is sales debt. from of Europe. part beginning of will with minor provide we invest these the long-term grow common company to quarter. capital moving Sante deliver our Totan in balance framework patients benefit majority our in Pro the Across be it Consistent process European Diagnostics either assets the assets that ensure agreement and partnership sale to other believe we reduce positioned stock that and definitive continue another portfolio, to Vivaldo to leveraging remains since in and used to they with group, divest the to Spanish and while leveraging repurchased a which Ribera in to high-quality our the the of announced, to our

the real reduction us On leased in a and space exercise the real company's evaluate run exercise, of an material real portfolio. to estate front, owned to with that to achievement step beginning reflecting capture our related estate the we recognizing took savings previously rate described in the associated towards important footprint. charge Today, estate comprehensive QX. rationalization allows the savings This a we

$XXX possible incredible the XXXX approximately reflects expect and as serve progress forward of on benefits the rate of This creation place pull that run workforce, wherever Centene the but it value beyond. as to of point journey. this work to on savings our initiative also million meet value for we evolving we we to look high our a proof continue will We needs should

progress work value see, and can are tangible measurable you As results. delivering creation streams

access year Centene's the operations. prove the our when momentum report everything connections we made greater. of to yet carry this how And makes from is transparency team I deep makes baby approach front do were meaningful state development in we through of half outsized effect prices road securing a leaders move deliver locally want I've so deliver lines the with we to to our Delaware. my members power to to relationship mothers virtual comes recent you wipes year, XX,XXX results a vans on of quite Nevada's employees. called to van building commitment to members us never knowing to possible new of partners that grow, to Healthy essentials, on matters sourced most been Silver transform and with Centene's our jumpstarted most to the diapers XXXX. local win food and in powers to contract the comes this to role, knowledge members, the presents by innovation second and personal when building in Local our didn't difference food create it our continue vegetables as comes mission-driven New financial our has Centene's the meeting will spent many my recent our partner provide team impact, and rest trip and have in the XXth State. rapidly and unparalleled transportation our time bit to business to experienced and as rising on our program, updates Babies time tiniest state. visit at to I in milestones on residents. in an to the listening strategically this market As XXXX they major the ability plan new key the we across the the risk of us to award that with Years our members Combating and key ground, saw fruits Local Summit directly of Plan of Health bounty organization. a and to Nevada. renewing boots the go with into and Granite health at are back on our could actual and Hampshire. operational green same and to realized diaper keeping to also again since firsthand diverse on organization and growth security all valuable I Families There, it innovative Southern their Medicaid that state team Local Their when asset, deliver positioned and Medicaid of improved visits, help dedication at conviction New our market regarding team with food vulnerable as difference necessary taking a the Hampshire distributing a it of

New distribute XX their the food that suddenly filled a XX Within is also the surrounded at of grocery of when a a in into So were our makes received called every of personal in your to a pharmacy based neighbor. store because let in in there store them neighborhood are prescriptions Within Downtown where and caring Buffalo, one from grocery months. May to York because call caring, they each supplies grocery what tape. in inside locally aisles On that And employees Local customer members when community hours, Care had Care call store out what do makes a whose that really neighborhood the pharmacy them only to State a you in were with who tell had mobilized when shots comes and those it difference they them. comes employee rang hours, community and kind Fidelis checking police inside on local the needed colleagues identified do. to deep personal team headquarters of me Fidelis recent XXX members the XX, sprang action. one your from local. knew They was tell top into to closed, extraordinary XXX No at difference. Fidelis

That's in their but pharmacy and Assuring them the of acts caring. was Neighbors assisting local. profound of identifying in of in area. order engaging resources in the medication power human simple supply additional

on call our as core value performance proud every shareholders, are and on and detail leads XXXX that, creation of financial in long-term and to With our progress work line the members this our the during Brent the alignment business performance focus strategic are to we beyond. will pass of continue day. creation for to coming execute Value do year-to-date, team plan for the months the on creation like the I'd that We and for more Brent? proud quarter. years of Centene we and for value we to both and members

Diamond intent an the you, say this happy we month, Thank pleased Centene statewide and services health Plus continue Plan contract program. the Delaware supports we Centene's Care, January Managed Beginning Health, integrated during serve and quite forward Sarah, services our XXXX, of a Medicaid Health and I'm talk Health and award Delaware. care will to state. and is and and Medicaid to look morning. managed by State an through business quarter. It's this for were lines Earlier in is state notified be long-term of second honored the tremendous the to X, Medicaid State to provide Plan XXth Health Centene Delaware of opportunity behavioral This grow. performance Centene's physical leader to core Plan good we I'm to about programs. achievement, the Diamond to First in

These foster contracts welfare began the specialty This receive and our serving in is to the were care involved July estate, specialty We young Chip system. sole reprocurement foster the TANF, and quarter, sole source Missouri. the industry-leading our an nearly plant in membership. we successful and state. serving awarded fifth addition children new contract child expansion of children we're subsea adults in and Missouri earlier our and X, adoption contract also for were children assistance In children with the serving XX,XXX source in and

existing proud eligibility incredibly Medicaid continues increased million ongoing be and redeterminations. end outcomes has at members growth our this suspension the are for our membership. of of the to aided We of XX.X to programs membership In quarter. innovative second the Medicaid by

now extended to least As is you're that aware, mid-October. PHE at all

to in ability our managed process programs PHE for new RFI a confident with more care. support member needs comes Whenever eligible we'll their our membership to and transition transition. products released states post to have their The XX Medicaid populations. close, marketplace redetermination, the our we recently beginning medically to We work and serve in ability to continue have has Medicaid to and state an state supports, exchange where Indiana As an MCOs recently consider populations attract partners states remain about states services and membership. of agencies several we where in to both complex to the Georgia, into long-term asking responded budgetary RFP to

X we and with the Speaking led offerings over product. members. membership closely of the marketplace partner ability to our exchange through quality of The the and product, we consistency continued Halfway the has and our at and product leader remain XXXX, our million providers. operations entered to quarter growth

we're that ended X.X are benefit of continued million the we continues and the Utilization In seeing our premium We began bids with of on monitor situation forward in over to submitted for continue members enrollment. and XX% offer advanced products pleased year-to-date. Washington, bill. and XXXX this the we focused new open movements in confident tax the of of and to expansion optimistic enhance quarter to we nearly in and membership at feel initiatives. credits expansion look steady, our Medicare, to thoughtful regards remain be clinical growth to cautiously XXXX, our targeted reconciliation geographic in We

towards and the network margin penetration existing enrollment, As and we concentrated are expansion of markets. look and we further states annual on

as area XXXX, With over core that, position continue to as of core us perform me products Midway growth capabilities Drew. call to our our population. We the continue let see this deals an complex through to company turn to for well. serve our well

we provided morning, share to revenue, of XX% this second at compared M&A. the We up to quarter $X.XX the strong QX of organic This from XXXX we results Investor Brent. increase XX% adjusted June per total was $XX.X of consistent of XX% and earnings you reported a from in diluted Day $X.XX second in XXXX you, of quarter reported with Overall, Thank X% quarter, I'd with update the billion quarter XX. on XXXX. characterize as in an

increased to last the Medicaid, of billion membership Let's to period, XXXX, up due Medicare growth million, for compared quarter to $X.X of driven Total during a suspension North acquisitions compared X% strong Circle start and in quarter. of the to enrollment in the and the second year Carolina. with throughout revenue revenue by annual Total strong commencement organic redeterminations the membership contracts eligibility the the Magellan by grew ongoing of primarily ago. growth year $XX.X

track than and to in across QX quickly adjustment, at the Marketplace XX.X%, right continued Our was industry the was consolidated is margin little commercial a our on and to settle Medicare XX.X% progress was make in goals XX.X% expectations. at Medicaid HBR zero-sum year. following and the which our results aided better by pretty toward risk business of tends out

we more experienced care, improvement to returned simultaneously. X,XXX a driven we to has appear consolidated access second improved providers as to ER were costs our we HBR, be headwind by also health QX few throughout in as seem Omicron preventative XXXX, to adjustment at Telehealth that from risk resilient the facilitated including still a of XX.X% cadence and a Utilization care to to non-COVID more here. encouraged members variant. year-over-year, Furthermore, a of compared expected HBR XXXX. basis the role have connectivity Given more than look XXXX, and non-emergent The a to our QX, included be we There's of such big in year-over-year and we largely compared the normalized played improved suppressed points XXXX and have which return got commercial we more COVID pricing data, primary and we our visits, areas about to utilization managing actions believe care. When COVID QX down normalized X/X and quarter expected.

to Moving balance and sheet P&L other items.

SG&A points Magellan a ratio the the quarter. the compared year. X.X% ago compared the by Circle to On and approximately second XX X.X% combined basis, was expense Our year basis inclusion adjusted to quarter of in ratio last increased

engagement HBR commissions higher adjustment accompany increased compensation. member outperformance, and to costs broker we commercial Medicare that risk the Additionally, we as grow incurred and continue increased variable

though We expect drive there investments plan ROI-based over years, along our be to the way. lower the value SG&A creation will next few

billion expected estate we owned strong reduction estate charge at partially On the the value an real charge related June flow quarter real the state over $XXX the million operations related before and in $X.X optimization. due during impairment the the recorded consisting approximately million directed and primarily with of billion in estate come in was by to the estate real real assets. payments. quarters more $XXX of of next footprint Day the was to at related share couple second earnings receipt quarter, lion's Investor plan, to reduction second receivables topic to $X.XX Cash $XXX of provided by in we discussed of of to company's creation of to This million leased very the XXXX, real a the driven the estate charge related

Our unrestricted end cash was domestic hand at quarter $XXX on unregulated and million.

second common stock through repurchased repurchase $XXX quarter, our the million we During share of program. our

million after-tax a As $XXX of the we recognize on $XXX year-to-date, of expect an by used result plan will proceeds debt be $X.X million executed of to million gain repurchased billion in reduce Panther repurchase and value and QX. $XXX net in mentioned divestiture majority XX, Furthermore, creation approximately we the of The have Sarah. of July. approximately including to stock the July earlier completed as

We a Debt on at at Estimated flat was Rx close be announce end Magellan deployable were And in by few pleased of we quarter the the billion. zone transaction billion. of that of the relatively year. transaction $XX.X the international working $X.X are proceeds net our end sale would of businesses the to to yesterday.

temporarily the up charge. pushed Our real from was debt-to-cap XX.X%, estate ratio

XXs high ratio debt-to-capitalization term. longer a target to continue We

of milestone adjusted are to Our X.Xx seeking or EBITDA close the to we less. pretty debt came in Xx at

XX XX% to was in largely The the liability payments in medical but QX state-directed end QX payable represents received payments by quarter of and not billion pharmacy of $XX.X driven totaled yet at and XXXX. increase paid. Our and timing XXXX of compared claims in claims sequential days XX

have estate reminder, $X.XX lifted As guide a XX, largely a back since spending, year range December, EPS some our EPS investment our to realized the such has the half also guidance range of the We've models $X.XX Panther. June Panther. the the driven in of reflect to or GAAP down by some adding of of Full we're cost full you at metrics. $X.XX another to to gain a to the other year in win. range estate adjusted initial real guidance, have $X service to X% sale billion of increased the updated $X.XX on we revenue guidance $X.XX by the divestiture build, due charge on to of approximately the know outlook adjusted the of we on XXX be $X.XX, $X.XX aggregate, year Today, issuing million of and by of EPS midpoint. to XXXX so the net some of been components some benefit adjusted and Delaware of let as in I In me services is down touch points to is basis premium P&L and real

and We Panther expense $XXX million, deployment in expect proceeds. of factoring around also count our interest adjusted the share

XX the have slightly by of guidance. SG&A ratio lift Panther, high offset points net and I very cost SG&A to of a by HBR points. and SG&A items is mentioned which had that the $X.XX remainder a rate. QX earlier, have but low reflects services The reflect benefit basis SG&A performance in basis by down to X/X We ticked Approximately XX adjusted lifted due

million would such investments I'm are gain we Panther we are terms transparent. and need guidance. to investment value Medicare and people, XXXX, June June, times, which months, mid-XXXs, be the this. there scores a rating We've the improvement management the will Sarah we fortifying and revenue The X scores XXXX the of over referenced released For in and of sure in that to the we all come will drive to creation. will fall -- are commencement value the rating going the making this Execution results Investor to management November unacceptable and that creation scores. in year, Overall, the income the called At expect still Stars. of still in be meaningful year rebound The excluding tangible and team. and expect disappointing pleased as make from Though $XXX drive revenue, Investor create and areas Day over depreciation want are have multiple be touched XXXX that process drive XXXX meaningful star showing of in been appropriate we why. performance Day, both past a the other Star out we governance in X senior Star But year zone low with in this XXXX of to continue. in we are rebuilding to XXXX explicitly the balanced, we plan and and redeterminations Medicare that assume operational on and scores Star full today, in areas technology fall XXXX, team

what first our this year, While we've and about. and made for create federal That's of great this the will progress opportunity to long-term shareholders. half value in of plenty excited which members, improve providers, company has we're customers state

on journey thank open questions. of you and being you for Our Operator, it. line now part the is may for track,

[Operator first Nephron Josh comes Research. Instructions]. Today's Raskin from with question

think, XXX down Advantage in year, I'm a that And basis there, bunch points I but of in your guessing range. and for The half XX% I MA the know is MLR low it, I first probably got up. you've where the be up of Medicare to is stay wanted the look you atypical. products about can revenues if I ended are up, on Drew. at

a metrics So driving MLR you some the what where the is you is that a targeting confirm are already? members more year of And to closely quarter watching further year improvement? Or this MA margin getting that book XXXX you think I'm when are MLR? then still you're curious, what do especially is lastly, of new improvement,

filed around doing Stars meaningful priced or our company were actually priced we expect share in in I'd when move Medicare Josh, improvement in lion's We more balance revenue to stability right better say we little a PDP modest going We is is we're thanks But point, Advantage as Medicare question. the XXXX. actually the bids for the XXXX. for HBR those in to have -- in that what a probably of with XXXX, June your book XXXX, back expansion. business. growth. year-over-year. And the the margin bit Yes, for of disclose HBR Though,

heard at Brent into to is of to contend low XXXX, mentioned I Day pushing going quite in the think think Investor a Star obviously, you're good got growth, Medicare recovery through You digits. mid-single have for which, And headwind Advantage in to that structure when with then bids XXXX. we've balance a frankly, margin with that year a we XXXX. the scores

That book, PDP all MA from roughly of revenue perspective. assuming the makes business, X/XX sense. But size your a is just I'm just the

were Is big? improvement? X,XXX we're Is talking that So at? points PDP it what about about basis over of that looking we

to this of then better the to gotten our at the that's something health organized we've of well. a XX a There better at Medicare centralized Day, want And lot quite where Murray clinical at, or coming Investor we've mentioned execute. over tracking enable we're dashboards initiatives, -- it, some at at months. we've and I we're doing Jim sort metrics initiatives. of something is is look that's we yet PDP from having you this those plans not X Advantage react benefit its initiatives The clinical body gotten call mean, and but that across we connecting cost past, from be, that. that also and

comes Rice, today Suisse. question from Credit A.J. next Our

margin in you'll normalized year? you jumping your I a the How exchanges. do exchanges. a point at, margins similar you're And you but the give quarter, Maybe of I back just directed Can question ask I'll a off everybody. long-term the Do benefit but MLR us the just of risk Thanks. adjustment then flavor HBR. true-up. marketplace, where trajectory and know think reported next year low, Hello, that's you the this looks quite think this on think, getting toward from this give some is for that about you your the sustainable? public that's think

I the adjustment is with of Yes. bolts which sort lot engagement, nuts around mean really pleased physician execution member risk I'm and of engagement process, execution. a

carry we in making something balancing then to this X% And push into about to We're sort we year, the and stated that at for as year execution we we and sure better forward in can marketplace financially periods leverage think year. think I have competitiveness, of the pretax right execution. and future all next of we so continue of pricing that's submitted not X.X% as into maintain expect goal next things to momentum and those the look the sort at bids and we quite

even a in bit improved expect of we QX. advancement little So an margins with the in performance

Our next at question Borsch comes BMO Capital from Markets. Matthew

XXXX. walk terms of thinking I can guiding you hoping see could what latest at if tailwinds you've this that you and you're you're maybe another areas know just in was looking year, you Yes. What's give to your on as year. you're today your obviously XXXX us it into going margin going I through not headwinds about yet, for few points of but you seeing could? jumping-off be next made what's your improvement as -- talk

the in range now X Xs a as the mid-Xs we're been we've that laid or last months the little those this levers right just and fruit pull that low for we beyond. set us that year about as out. we not in if bear to again, progression, but Once we pulling for X that mid-Xs, to up levers But will that we're sort expect Yes. 'XX, specifically, plus 'XX 'XX, bit, you think of targeting

as about talked of basis. and $XXX that million million more a Our our on laid the Obviously, made the and in Investor $XXX move that's could $XXX headwind We Medicare there's bids. more revenue if can we probably when bit depending the when -- thinking out picture Sarah can are a well. of bucket. margin interest just both a be deploying income about load, the little we're another slide, then a the businesses. big one that, zone and constructed always that's in tailwind. little way. some that on in that going annualizes margin, rates We Investor commencement to Enhanced though 'XX, million Day, a back point that's timing that of to the to headwinds, pharmacy Those we you 'XX, move. and tracking that billion and of talked then this benefit margin. bit real get those then reduce there share business. the would million We can of in the of Redeterminations. Gross little just There's answer of how That tailwinds get either of $X.X bit Medicaid tailwind. -- redeterminations, investment of at SG&A Investor buyback are value run share -- $X.XX at there's year. can some that Day at element to bucket. over later. John towards divested talked we plus buyback it trend $X.XX we you APTCs proceeds ask guys execution, the still that's buyback. estate the And neutral a annualization, Jen decent-sized go had a go we'll rate Day We've of the bucket in expense share largely to But couple Jim talked And sort we're and should a giving debt carve-outs bucket us about $X Medicaid And other that, initiatives, run in plan, some third we've We too. billion ever-present of Then rate, creation you outstanding. about be get are the the that that advancement $XXX -- even

influence So and obviously, it's to our job those. manage

then Research. Justin question comes And our from Lake of Wolfe next

I about Medicaid the you wanted to MLR. ask

talked about paying the MLR what trend state of couple they'll the going Wanted corridors of about I'd lot will to $X for have hear over year-over-year overall, you eat MLR you're years, that both a that basis, up year-to-date forward? and XXX seeing a states basis $X COVID-related expecting of margin is last before to just is how impacted. in the through you've back I'm states. at billion of of billion to be your expect assume level the Over these own in here on place year you'd year-to-date. number in Reason terms the asking points and to your have

to out just there. on trying figure So going what's

a that's question. No, Yes. good

not. And the relevant risk -- amount we expect up be originate in the few into to disclosures up era. some COVID acuity at XX those largely that to payback those to as total in popped popped this previous paybacks, risk sun to setting we is expected billion other COVID your they the think era more which $X.X about of the isolated risk corridors. whether that's the expect adjustments maybe states. across what's mechanisms, new down during I of the in and because really a That's million our couple by COVID that or corridors, But era question be corridors hundred portfolio year

to And in that $X.X billion what compares total? Drew, last year,

sunsetting COVID 'XX. in and Well, risk more because a that were billion the couple 'XX, began of COVID with in the they and piece corridors of era present 'XX

that was but there, billion. Some are more out of like a still couple

$X.X guess of the you're I paying what at you're Drew, back. point So is billion

by So you're states think max I in all paying where at would your those back. margin definition,

all own is those changed $X this MLR billion. your assume paying up your at XXX still basis how I states? have in small? Or thinking am points So you're when couldn't about I would back

them of are next need There's benefit all are stair states of corridors, when improve of Yes. not years. It's There's portfolio. underperforming of many steps. not the into sort a our corridors. all rate over of grades having There's of that to different and couple states -- max there in we in get nothing you at we're that states. or the action risk It's

America. And Kevin of Bank comes our from question next of Fischbeck today

angle. dynamics. a it's risk corridor -- these redetermination. guess from like the one guess of kind when things building kind said I struggle different gotten of little why bit of reasons on hasn't thought bit kind little has risk the companies have say that pool better just question that a companies I I with Maybe necessarily during And margins of the headwind a to been won't just redeterminations be

that doesn't risk So to if in then bit risk of max a pool that terms questioning that average. somehow of better a back the it states, me come when number shouldn't get quarter worse speak margin at leaves thing that in. being you're the than little kind because

a because where in or or where that mentioned headwind, dynamic either you won't it's then in be core then state. dynamic be you're all again, not every risk nothing so broadly, And why mentioned more of that the the you not

Just trying to a better? understand redeterminations the MLR little implications or

Yes. I billion billion to revenue don't know losing that anyone would of the in characterize $X margin. or try $X.X to associated minimize

as billion headwind. if times of XXXX pointed growth that time look gave since at of out $X.X actually preview is revenue, we the the a What grown well a $X that our first a So I that billion. fact exit that's beyond we've you we number to clearly

going So revenue. we though be a $X.X billion company some exit, when back point, we'll to than originally of billion we even sequentially bigger to rate $X expected, giving we're at actually run be

XX% That XXXX. jumped okay, spent mean HBR as the of As TANF time point, alarming, your at at alarming, with we up some not X and and because payback from to a in being to at the the down but look base there context slightly the I actually but was of a that agree the And was we let's in looked really Day through to was was we XXXX population. look the, pleasantly nothing utilizers. Medicaid especially the hypothesis, little at in going And we underneath a was analysis up states. to surprising. the of risk I some bunch but Investor pool period X expansion that, population the data,

sit all before this we data, payback not sort the be when on position a at of but assess here you factors assessment. it's the what could of look right, population? in being that's impact is today you any have yes, we our panacea, -- And best So that's as many one

believe the data think to to it's Drew's conversations the creates that with but I with still are and we states would I bringing prepare process, includes by manageable, we Day, I change add, partnership the just What at in doing redetermination manage that said and it partners think that that point, supported because in doesn't as Investor work data. mandate forward the all it state for to us that we

get don't the classifications. people or redeterminations But will other sick reimplemented, follow-up they how when a are The healthy hasn't because stay worse, risk roles. theory though, fact people sick gotten the know point, that little and drop a then they they In time. for guess, got qualify the just guess, stay off I I people on suspended, on. to the on Maybe that redeterminations jobs qualify helping more because people the

that hasn't risk necessarily change respectively. lot, mean lot a is won't pool changed why guess, I So the whole a whole it that

Well, I and mean, looking you're theory, data. talking at I'm a

pool more of that's states take amped-up going or process states sort months to between with at about utilizers. we that be why boots and there in I and look forewarning declare for if So difference mean, the risk look But of is differential any be the it's and utilizers, to we're whatsoever that of stayers them the this to need are that then that local XX the when get ground we and minimal working the on levers. our that. won't where rate that We that we not got those mitigating pools And going is will sort compensated the that the that talked a upon believe there sort Sarah membership based upon but believe study, prepared XX% of place redetermine therefore, of our the not based Kaiser some it's we're concerning. we've in not is to we in other presence factor at states

question Lance comes Wilkes And Bernstein. our today from of next

about, pricing, redetermination, Can looking and sort the a talk and in XXXX XXXX you to also to states having bit Yes. planning states guess engage states, Medicaid in addition talk discussions what are inflation recession the could starting in? you're are the you if at little about I of how with a little

Yes.

side, with still On mean I our state partners. of year. the some we back and in rates on the we're finality we're get 'XX, still the pricing to data half constantly sharing in need

-- for extent one data. rates our Investor and thirsting reflected rates. keys forewarning But be convince to the partners So on inflation. our the what December that's but And That's there. a state those on see for don't visibility Day. seeing I The we we're sort out being necessary. again, not forecast to discussions of your usually the influence will what's once in are we of give of of lot Not XXXX state a movement partners going vigilant we're at able are sort that constructive. the yet will states number to of have pressures, of the mean not have yet lot yet that to be

it's their can working stable. is to when planning focused the commercial qualify. insurance. whenever are are and want as health would whether say And now most exchange care coverage, have it right years. so their on many, and ends seen And we've for of the Budgets or as I time health ultimately, our states help or and states or they the wherever have all that for and the PHE Medicaid with it's citizens ends, And paths actually stable citizens access health states many to the PHE

the people is PHE coverage. is is, planning, recession there and yet, say, not would I have planning the around where the sure So but making

on And just that. a quick follow-up

would more normally but might question and the in that tied you, during one and of be the to recession, increases for current require the or something recession? equivalent what For recession existing PHE different might really of a COVID than FMAP policy the is this kind to a see a bill

the A government. state public state be normal different far their whatever is would a would health between federal in as emergency as a state at the which point be federal the match getting of recession, the the match and time than

Scott from from question our And comes next Stephens. Fidel

be to few divestiture. revenue impact Obviously, pieces from there's to the modeling going different a moving

guidance annualized you yesterday versus out we what's talked really to reflected when figure the think to XXXX. out sort updated we in Panther, when of I revenue and walk incremental modeling it thought assets helpful sale European through the trying of impact us from about about about can then now that the of we may the annualized of sale So you be the how maybe incremental if just revenue divestitures think MagellanRx think should about the

Yes.

it's until assets really, the this about late quickly. revenue. $XXX billion of expect estimate. don't I our year, the $X in to Rx And Magellan growing reduced is billion, the late by premium little Panther best and revenue million guess, over and we close Central service were So half we back year Spain $X was annualized for this a although year. And our

impact XXXX. So it wouldn't

still And Okay. related.

any, to I was accretive, slightly minimal, on X assets, of announced just earnings. Panther, if going we it to when with and conjunction think neutral in that impact as the add, so combination of those

Got it. And just a related follow-up.

of Sarah of that actively the I creation. you're other divestitures pretty that the at sort to sort think mentioned potentially initially a value as you for you've potential identified signature portfolio comments still or know assets announced I number sort as of us and reviewing now opportunities had looking the prepared non-core. in of that had

still be us interested, some on just give we'd if sort maybe you update about there of maybe what continued focused now an be Just else you're can where may on where thinking divestitures?

sort looking the the pleased that those greatest plan methodically if through non-health have through health of a historically And non-health assets so businesses, some date. where of enterprises, obviously done process. are to sat the impact. got we're We're and portfolio within the for Thanks to we work Yes. have other plan prioritize going care progress question. broader our a assets, and but the working lot you all to of of about have we're We those that the with still second quarter, in think going consistent we're

still work expect assets core. answer couple very not cases, are that. some actually to necessarily can about hit the is But to be in on, this lot again, positioned and a should strategic I've that all times. a these strengthen divestiture. In of there and going cases, additional The of So hear announcements you

beyond. and part think that's growth as so we conversation, parcel particularly and the too, of company the for in positioning XXXX And about

comes Sachs. Goldman Nathan Rich today question at next Our from

marketplace back about talked as had target price taking that actions in you work you for Drew, in the segment. toward 'XX business margins

think of view the like? how I of you across looks and think what in the your guess, environment? will consumer next year, premiums up current have are you to business do business be And the enrollment in react to any type when kind XX%. enrollment think look average increases, I like in expecting on it neighborhood preliminary price I for like could of about you market, guess that the you

Yes. of number moving still. parts There's a

to APTCs a have pretty see recess how because We end up the size August swing factor. decent the that's enhanced before

sort because We improved, to that's glitch the that of also gets have factor. it's redeterminations so to family see of of And commencement that then swing applicability the another timing extent if the that to the better marketplace.

waiting referenced down a many pretty the moving APTCs, pricing, The enhanced a little, as as still it'll the this up little basis. wasn't too quite in Congress It big aggregate So we're a so point. things around a high on on flat. And coming whether can't be composite at really we XXXX. pricing made or you predict on into move

lousy we didn't that big achieving expansion have margin XX% increase a we year, year. thing maybe of meaningful X% in X.X%, good this into So a terms a not financially. to a in pretty of because were to to And as we that performance need expansion next our still and pretty are on move basis, composite margin frankly, that's rates -- quite in marketplace jumping off XXXX pierce whereas we

we that had as it national of our be those a with we to Marketplace, states And actually approach. very exchange. generic for of states market not view local We have do of [indiscernible] Delaware, much of see XX kind to earlier we a XX an Medicaid. overlap XX It's market. like mentioned

potential for between knowing out think played and insured will future And quite well I play distribution the provider markets actually XXXX. it and in relationship us insured or and so the well

just quick in the of year. follow-up the on Can for a of half Great. half. the back outperformance you ask just earnings cadence the highlighted Drew, I first

little of like the big expected it seems previously back had half. just the talk Can a XX% year. like you sounds drivers back think savings would I real Panther divestiture, estate It the gone half some maybe like the about Obviously, that's in you the for down bit. but earnings come through.

other be major should about? we So pieces moving thinking any

now the ROI-based Delaware we to the example, is we $X.XX that full the the rate, of run of $X.XX now back dime At make creation year. one other there's right. lifted in was benefit we I printed early but half right, and explicit in value on first making that estate Investor XX%. we're expected year Day, $X.XX the Yes, pretty real benefit investments that by investment of your minus guess that's intend plan that it's I a we to XX% half, actually point, because the

nickel. thereafter. the like marketplace, normal we And it's normal But why of business it's rise progression, commercial that's the sort the So those to otherwise, net in sort throughout year. of guidance cadence HBRs and a increased

Bank. And our Hill question Deutsche with from comes next George

it about lives Yes of state the national and Do kind I cadence will you to process could then will just on through the I Medicaid if or to dropped is through for follow-up by PHE modeling talk you you or go determining process of know another guys think at state. like if guess the expectations for guess, I once a lives these it's process. be eligibility. about redetermination I -- roles then about go will redeterminations. once And and the think ends? the you'll redeterminations of or I'm trying don't expect effectively slope be lot on these the the as paperwork -- stay

process. state-by-state a definitely It's

seeing what operationally. Brent, So about want we're talk to maybe you

when And it PHE ends, end they're are And that said, standpoint. of the state. and from at all by day, the well is planning waiting states to state definitely see the

in the it that and coverage proceed And approaches meetings through sees are take ultimately both everybody the be months to and to standpoint. some their they want understand depends on they trying will and have health states really state options really and from state. having care much Some groups nonetheless, how that state working every faster. help through will and communication, many how But education and

reflective of for levels would could I renewed relative to volume actually each that numbers at go through measured it's pretty be a us in a in to said, more take closely the understand tracking we're also enough not make and of versus, states thing issues going what or the the state parte helpful want add support staffing is have the automated members but are early automatically for an sure members proxy One states that those months that and create process are as happen have process, they member would to to dropped accumulating, that that the fact order to different Brent maturity overall. the very ex are of approach would that abrasion which that either

question Our from Michael of next today comes Stanley. Morgan Ha

exactly much clarification, [indiscernible] up your benefit Firstly, just XXXX a exchange did A.J.'s question. the quick on risk following quarter? adjustment how favorable

big obviously It's contributor. a

that swing recall, actually in had we the XXXX. QX our if every expect so of was missed marketplace dramatic a expectation we pretty QX -- We you'll because in

get which because it's So quarter first then data. you CMS driver an that's data anticipated [indiscernible] final in the the and

basis by but -- So improvement. the as we that year-over-year outperformed X,XXX evidenced point

question from comes with next Sternick today our And Calvin JPMorgan.

the specifically on comments HBR much Medicare in to how then back -- you in performance little bit intentional the I is maybe the way how you guess those And sustainability made, coming how thinking versus is a wanted expected? than the about of to PDP I PDP circle outperformance better are XXXX? margins business much of the there in

shifting the of low-yielding in of product. planned as very the And of and the PDP. responsibility of it's the that's plus each yield benchmarking in for was sort the I Most bids. drops the because mean year a year-over-year unique improvement

reflected. has of you HBR because low to amount the a So certain have to be admin

on yield range of of point, top PMPM in to on And depending the I most bit, bit planned. of sort little a think then little was a that product. outperformance the is $XX that, of there's your to but the $XX there's

at comes And Taylor Gary from our next Cowen. today question

I MA appreciate keep you way the front riding stores. the

a I you So if bit. on to see knits, everybody is that. the can I with a had little respect same force couple page smaller might

quarter, The of quarter. first temporarily investment we that And a be just claims that you out Did on a would reverse so one anticipating this DCP. then just about talked days, be sequentially be income. those on least factors pushed at would days should next second right couple couple back up payable, the of

guide that to $XXX to higher contribution half? million anticipating is investment back quarter earnings running just the we're so the -- in hit half, in your back to going So income be a

yes, So income investment on with million. $XXX

so up income year-to-date fuel we That investment hit were includes we down million some we $XX or sort of cleaned and think investments, first things income the I that wrote half. other the $XXX in yes, that million And equity equity the a took year. full half the first of some expect hit for markets. we around with had investments obviously year. we But

it books. actually where balance to are I came there if are That but strength of one, fundamentally, cash out correct of there. output. is that, the a to out. will that. out elements to and strength a just it take when It push reserves there's question a rates, in we is measure $XXX That's that know It's don't closed reserves. predict. depending that, quarter. the literally we've on because around the and It's But Fed that's sort detail I'm getting I imperfect couple quarter. it from exactly that quarter we of our manage and happens believe an it mean things of we're that typically have in stretched million are invoices state, I Pharmacy pretty expect may be you're much of but tough Yes, payments a But ramping see to quarters interesting. next got always in a your to I that. often, do element, sheet the up obviously, a the the an first So the of And looking state-directed DCP. embedded would impact don't DCP. But hospitals. measure, timing, over

And next from question comes at Benjamin Flox our Jefferies.

to follow on up but was I wanted this for already, scores XXXX apologize plan Star if revenues. asked year I

headwinds to is the understanding some as run as going factors COVID a off. era is Our face whole industry some

prepared key on in us the color of give that you're So can you headwind? industry expect more remarks a then underperform And was just kind the the pressures bit that to point you expecting?

The and year just And an QX revenue back if But an to XXXX, that time right. industry probably, this you thinking go XXXX, of absolutely over were answer plan XX%. we started is you're we XXXX amount factor so peers. I'm about benefited the the outsized to from There's first relative yes. for talking

the XXXX STAR there. in to 'XX, control, me As team just relief would the year that end you're XXXX we and of that about, talking scores And to rating this XXXX then the management and than and that is our of believe in XXXX XXXX Star half what we're of Forestar sort an and can execution from year in which beyond, on membership absent be which of we in can what driving terms top will results first execution get indicators of over going of underperform. attract see those look now of scores we control, result we're is that, of XXXX drive less example, half now into XX% hopefully then and and But rating revenue you'll started operational at XXXX we're into some the publicly of are in the fall that, as 'XX, throughout provision. disaster that's

at top really Investor And Maybe through service XX what Day impacted at Starz went anticipated sort just period is back in that of early the Wave history XXXX. to part half from of the on XXXX. lesson and that is revenue the of those Drew And of that rehash days Yes. we quickly why. pointing again, to time 'XX are

we we're models. Medicare XXXX, in and a things One together so tripled overnight. parts WellCare that we the decentralized an scale book We in operating enterprise different very to happen, everybody a home of then and We and at program size centralized fundamentally at together one run of different decentralized for was our COVID. WellCare couple And level model. early hard was brought X send brought And quality Centene right?

operations the of in And back quality impact of the of saw performance 'XX was year, leadership again the that degradation will what in last quality to 'XX of and half tuck caught employee. creation 'XX, short-term middle has prioritized the 'XX priority added every and half office for it to in single to performance for from unified the different be so back new initiative. of we them program order then in we've team, under management incentive is value the and of committed first the half company, which a that sort this for past our And is which the and baked into whole

so for operational team a year XXXX in rebound that weekly Jim telling can Investor meaningful of of a Murray of talked we're executive that for about The service. terms looking And all performance that those revenue on watching in because Day how is the we is what be basis watches at us work dates XXXX.

to driving Let one we are that. pulling long me our question, is to committed achieve answer a thing short This plan. still to levers and multiyear but more a add on

to is So will will our be headwind a it around year, upon nice based isolated this while going XXXX for be in turn execution. a XXXX and for tailwind

laid we to towards saw and in going this that game to you. the the tied is out compensation you as executing multiyear proxy, is drive for out, the organization targets Our we laid on plan still

over to closing for And our remarks. the session. you. I'd this Jennifer like ladies Thank and gentlemen, Gilligan question-and-answer any conference give to turn back concludes

want calls, are very any follow-up please much. there joining Thanks thank for And free if us this out. everyone feel We to to morning. reach

today's thank ma'am. all for you, conference presentation. This concludes We call. Thank you today's attending

and now day. have lines, wonderful may You your a disconnect