Centene (CNC) 26 Jul 242024 Q2 Earnings call transcript

Good morning, everyone, and welcome to the Centene Corporation 2024 Second Quarter Financial Results Conference Call.

[Operator Instructions]

Please also note, today's event is being recorded.

At this time, I'd like to turn the floor over to Jen Gilligan, Head of Investor Relations. ahead. go please Ma'am,

this which also Head Executive and our our everyone. will during results second Chief Drew website Sarah Jamie, Affairs, Officer be Chief joining will our of available conference you also us London, Asher, and Officer; on quarter Executive of accessed President as good you, and Q&A. Dinesman, host Thank Financial Centene, morning, for call. Vice Thank XXXX centene.com. and Ken Jon can through be participants at Fasola, morning's call, Centene's President; External earnings

a results may Any Private company's differ by remarks the various the that the plans second quarter about from materially those Centene purpose of harbor statements safe including discussed make Securities is forward-looking as Litigation prospects which for website the of release, statements may forward-looking the available in and result those indicated Actual on constitute Reform under under XXXX our factors, important expectations, section. those Act provision future XXXX. Investors press of

cause subsequent may and developments to estimates anticipates that Centene change. events its

disclaim press refer can be While obligation The to measures, in may reconciliation these specifically forward-looking found second the measures, directly to at point to also in with future, release. we call A XXXX company do some will certain non-GAAP so. these update of most GAAP comparable quarter the statements elect any measures. the our

With call Sarah that, to I'd to London. like turn the Sarah? CEO, over our

we a previously quarter diluted for result. as This quarter joining financial we second us review you, adjusted morning, second Thank XXXX $X.XX, anticipated and stronger thanks, our results. EPS of than everyone, Jen, reported

resulting line, in supported the core from in with redeterminations. results to strong in continues Medicaid by line period our marketplace, execution power with mixed perform pressure our by in expectations. offset earnings Medicare Our was in partially business

power continues deliver enable a the quarter, us our step platform the earnings moving a consistent previous dynamic we expectations from of as with landscape. diversified to navigate Taking back our to pieces healthcare

the let's to redeterminations of QX importance there. the start results, Given

and As a this out the that process to you reporting behalf been account unprecedented scale on would driven for we members has membership a to know played the many have knew at continue of shift rebalancing of on as we for an and year similarly over our well of unprecedented now, acuity has serve we state the rates of partners. require

of this analysis rate mix that While actively we in we saw and and is is are a suggest addressing. our temporary the the are we acuity quarter, Medicaid population addressable due dynamic continues and magnitude to to largely underlying therefore one and the disappointed that between with of the materialized disconnect already the shift

to phase, in the in seeing as emerge lead-up The the with for early direction. regulatory and redeterminations of in each dialogue allowed year rates we established much on the profile actuarial very they to shifts and that second have the the in us this right half counterparts state's a are step we are resulted

uptick in an expectation composite As adjustment. you'll rate our by momentum is the this hear for Drew, evidenced from annualized

rate anticipate still operating each to normalized dynamic. pre-pandemic return more are to the redeterminations beyond we a Medicaid the we Ultimately, and range impact. HBR business a once steady month state fully each closer gets will And us cycle

partners, costs leverages help members. to to improved outcomes. our substance continue support control peer-to-peer for diagnosed we with our addition to recovery In to for members and state while of disorder. like can reduce our this drive to this is as Innovations underlying example HALO improve One use program, are within Medicaid innovate outcomes operations span a driving well medical for and our which we counseling new look rightsizing the on rates, health of

and an we with which through ability the is have successfully work dependent on opportunities in procure process, growth our historic we to Medicaid, sight state geographies not for teams As Florida, contracts wins level. deliver, reprocure state lost long-term a in discussed of team redetermination front, On at Michigan. previously like this and Kansas our and business critical to continue development local

to We QX taken to the Florida contract with business, We targeted by recently have start the and our contract the finalize look and announced feel Arizona state reviewed LTSS new our launching date this in actions to year. new outcome. about good that a forward implementing

Centene and after Medicaid, Throughout of has leaving under leadership the that strength been has with build success Thomas, of in helped Dave markets been of company's leaders. this will team local of and our the support a who and years has a year exceptional, to time, XX mission-driven priority The key CEO Markets organization. later be Dave our market influential the

of in and As we the take we years, extensive our Landsbaum, many leadership chapter Medicaid, than has to for in innovation brings a position next for health you from roles role of know multiple in Nathan us Florida, experience the to now one organization of markets. this Nate XX and the more his who those across from leadership ranging markets later growth organization leaders, as leverage prepare plan with role year. positions been will corporate

organization, programs. he and Nate harness and the more to working our significant thank Dave made in of contribution more look and to with serve for we CEOs market forward members to I to our power want has the incumbency

the business, redeterminations. leader we and Centene's again market, delivering from undisputed also providing complement individual is Turning strategic delivering natural expansion a strong shifts in it to the Health and once navigate core Ambetter margin mix only members on XXXX. in serves for coverage performance is business Ambetter our as a and marketplace. acuity not but in the demonstrated to as hedge Medicaid continuity

redetermination business morning's and the process, growth, through expectations been membership full in this And able to has exceeded expectations. serving to At for has the service transitioning time, our capture year to Medicaid. same date, for the contributing increase in-year premium revenue members

marketplace commercial individual addressable the direction. to giving in the our us run of market, continues executing micro perspective, and with we we exciting positively business. we shift harnessing see a heightened to the landscape members, gain From increasingly among half groups accessible and an XXXX, awareness positive distribution in By With and consumers migration of continue macro market, are to providers this to momentum our in first the the room partners. well small

promise across tax advanced driver a of enabling like than As are states the and country, this particularly in and to Georgia, finally individual XX of we drive growth economic a premium around chassis, benefits more look communities we Americans beyond. has believe that to Texas, for adoption stability in Centene bipartisan mass positioned to around long-envisioned, of the aside, we believe reality. and scenarios well Florida Rhetoric healthcare and alignment critical has XXXX is foundation robust access made for marketplace affordable been the is and build XXXX million a enhanced on to there Coverage clear. credits, the rural this

continue To momentum the form coverage track and this we around portable customized affordable, of for to end, [indiscernible]. individuals in

that the group compelling market a the to it space, is protect, the fertile, coverage. this represents we a leader to business And alternative thought organic still without story. employer-sponsored create can brand While our commercial to with individual as very in upside see in we #X as early, hunting believe and ground this market this

Meanwhile, in progress. quarter make significant continues Centene's platform financial Medicare the performance on-plan and an to delivered operational

announcement enrolled are, critical in STAR a X-year approaching be milestone we or represents October. this previously of as pending for step of towards better rated important in The Advantage Advantage plans X.X stars you STAR for XXXX. XX% our in many as fall to achieving of published We Medicare established membership the new goal our as of know, unveiled business, an Medicare prepare ratings

year's with XX% progress remain that CMS. efforts, compared XX% to year-to-date made achieved pleased the deliver operational by are steady We recently the to updated have to we by track progress on and last

Let we a with admin hold gains have year the and results able Consistent upon tangibly sense what build last has visibility were time, we in into to this related good on me ops. updates, At prior give achieved to improved. them. we to you this cycle, and for

CTMs and in our work continues performance would part processing driven improvements as we and improve risk the and Our center has see October. of by of scoring appeals, teams focused to health to claims call expect with assessments

the QX and HEDIS On in successfully closed the many HEDIS drove of QX are about scores. front, significant in member outreach physician our increase heard you that our These improved for important and care improvement in access for lead indicators members. in gaps

not with invest ultimate and to expectations move and XXXX, pleased our expect through October We continue strengthen focus enterprise-wide. meaningful quality caps consistent results sit our yet be goal. here we the commitment as points, against to step or but today, are we milestone in have final We programs XXXX a internal on these to progress do cut our with we this as to and

Relative Medicare a supplemental we did team into to lower-income strategy integrate I'm and data-driven our rate bids, focused health remain equity product despite work of challenging our on seniors of complex benefits lens to proud serving the XXXX environment, a design. our

build profitable growth. Medicare We of footprint, strategy also high-performing all for took multiyear a contractual and to a the opportunity part business to back cycle in this simplify bid to our high-quality, aligned

across scenario As a our on level policy and election key dynamics we of close planning business. at keeping eye we and November, are certainly themes every lines states approach for

at before, we we Centene, out policy, ecosystem. said politically and operate focus have on diverse in politics, in we day a As day and not

on have at multiple level administrations. each partner serve. This focus that we work for we XX past best and solutions success community our over the is state Democratic and the because first and mission We federal Republican thoughtfully demonstrated on both across years

is governors, there federal all in topics, across electoral role, health In views they serve. and has is on of they women, of committees. regulators mission, with meeting This the had and have a of the support improve policy senators, honor country, and one communities thing Centene's different is this many congressmen leaders it the we major the bipartisan regardless want, believe the of including and outcome firmly legislators And state November. lawmakers to vision while I've they

a still underlying work now revenue same moving temporary than in good talent and we challenge. organization beyond At STARs are business, redeterminations and the XXXX, Advantage the and the more making halfway processes our We are strengthening but exceptional Medicare infrastructure, investing well-documented innovation. adding we progress through and at hard modernizing including time, headwinds, Medicaid are real

Centene's we growth all we do. and healthcare the we keeping shareholders of as center forward, by very value our value profitable us positions well delivering our focus to go at that We for government-sponsored that them to we confident deliver remain believe on members and can

beyond. of for to EPS and pleased furthering dynamic than are $X.XX look progress and adjusted We during forward greater to our a diluted in our reiterate outlook year XXXX

turn that, over With it to I'll Drew.

May Today, Sarah. the previewed QX we Results of track intra-quarter example of the results, for revenue in The quarter serves you, Thank $X.XX XX% share the XXXX. quarter, the varying in per XXXX. earnings of on another enterprise, as consistent adjusted $XX described This in XX XXXX share earlier performance premium of diversified and diluted service excess $X.XX, per in in result among billion of and with yet we dynamics including from reported adjusted second allowing were business. week, diluted the many as of benefits in up our of degrees us X-K. to parts deliver earnings quarter QX a keeps the

full high for XX.X%. HBR end the year-to-date. Our guidance XX.X% QX XX.X% range year This and of was previous around achieve us positions of our consolidated to

higher due redeterminations As of to QX, membership X-K, previewed wrap-up. the that May was medical in the acuity as expense Medicaid remains in largely

have acknowledgment; sufficiency ago, need three; needing one, to match action; intent You acuity, talked year with about may partners: states we regarding and from action. rates two, but acuity. acknowledged all one the our All recall and a matching about have rates and state taken

the on we're through visibility sufficiency that now working more redeterminations. still with are We largely

the through when acuity membership The XXXX working and large and than now population more remains, we of XXXX. QX state the is the of QX clear shifts plus our stayers partners that were us rejoiners, to

the as them updated conversations our constructive we state part have the rates to of continue process. present sufficiency partners redetermination of and We from the the on timing with latter data with

the back be Pursuant Medicaid to X.X%. original of cycle rates X% of half X/X composite our plus, forecast premium. to will to relative to This to we now our expect XXXX XX/X rate these Medicaid about of half impact X% efforts,

HBR the QX's of in will So this XX.X%. to of help trajectory half the the compared back the year

in proper XXXX the our While Medicaid and more ultimate we in to do certainly matching have rates view of have no we work our on long-term and rates in business. of acuity change XXXX,

a well, wrapped also Meanwhile, with with business growth execution, XXXX our performance, continues including great just end. X.X adjustment positioning at more we risk Marketplace not and to XXXX members million in but our quarter perform XXXX as up in little

again, X-K. to that This get million, in wrapped revenue Let our pickup Wakely execution result Marketplace to The ultimately, estimated decade, published me gotten subsequently this at execution, hit of past in May of population. corroborated business, better-than-expected our submissions past great process Marketplace. in the referenced acuity May Tuesday's was and accumulation outlined highlights and pretty including in In of by of filing, which $XXX expected data notice good was Monday. Tuesday's operating we've was a paid data, a of server the the the XXXX our edge match as approximately X-K. as value year-over-year, submission Result favorable we we net CMS' right of P&L as the the result improved in the up marketplace then the final

as segment drive scores better on to get Medicare requisite business few with the performance. improve our expectations that to to years improve next STAR over be Our forward we XXXX, and we to look revenue continue track the continues and for

outperform And in and this despite to divestitures, redeterminations revenue. continues company premium

You revenue a XXXX for $X compared $X and the segment future, billion. guidance reported to and revenue can year the service increased full EPS Accordingly, approximately XXXX commercial billion $XXX to beyond. exiting earnings drive range base upon with Medicare in premium in the billion $XXX in in revenue. XXXX April well billion $X growth $X bodes higher to release, see billion That to our which a by in that Medicaid, billion we and revenue, XXXX year-to-date of

update, investment other on billion $X.XX excluding One guidance income now in divestitures. we expect XXXX, of gains over

Unregulated year X.X% Cash $XXX be year. quarter on was with half was track provided ratio the the previous of the flow Consistent million. expect expense guidance. operations during to deployable billion QX. the cash SG&A cash quarter, adjusted full was hand second $X.X at with by on Our of in second our in we comments, end majority available

year, shares. half deployed on $XXX the we In first of million Centene the

was adjusted X.Xx at Our debt EBITDA end. quarter to

XX Our medical XXXX. sequentially payable, compared claims claims liability in represented at quarter day up days to end up and days X X of QX

in given half on And original half the Centene expect would of second well XXXX as improvement continue of to year some performed in HBR the we second relative portfolio improvement. a diversified The rate half whole of action HBR into the the pressure Medicaid action. goal, Medicaid XXXX. Further compared to first our the while continued QX, our we expect rate

throughout on SG&A return market give today execution. continued overall we three, we continued On XXXX, in in $XXX through in category to XXXX; much absence have hit and the current that Medicare guidance, six, deployment PDR we you improvement growth to redeterminations; in walk two, in revenue XXXX; HBR and the the the but operational make and growth XXXX can In XXXX XXXX embedded expect XXXX. too deployment a rates Medicaid of to XXXX. improving in our early believe Medicaid into seven, forecast, membership; capital and progress we efficiency Five, marketplace one, Recall, to in topic progress it's guidance. of post relative our headwinds four, tailwinds, PDP; XXXX as tailwinds we on PDR million of growth the capital a XXXX in annualizing P&L currently a

risk annualization benefit; the expect the prior reserve we of impacting XXXX rate repeat to revenue; XXXX investment final three, $XXX income. gradually half wouldn't premium XXXX actions million adjustment headwinds would on and federal year one, two, the of impact marketplace first include: redetermination

in more will through as We formal guidance we Day at December. our get provide insight we XXXX and to provide XXXX, expect Investor

Looking margins to our focused produce marketplace ahead, of grow acuity, EPS our products guidance stars, EPS match adjusted clearly our thereafter. adjusted rates strong are are to on on partners to XXXX we continuing planning position $X.XX than state we and deliver diluted with to greater improving and influencing

open in Centene, for interest questions. and we you up your for Thank can it

[Operator Instructions]

Our today comes Baxter first from Fargo. Stephen Wells from question

MLR about was hoping there? kind you MLR And of I X% guess of improvement a something assumptions we half you're back as tell we're magnitude to the that the that thinking us would Medicaid helpful get know. the to you on also composite rate, be use of bridging what in could plus that's that any year? I expecting get And for should

And more work states? if think rate states to half Or you of you your brings do you that still inside terms leave normalized there profitability? level with this on updated line give composite of of for in then your Is closer that a could in rates us where second sense the this basically do rate, targeted have profitability? does to you the back

Yes. Thanks, Stephen.

the So take and effectively with I we -- up range the HBR some top end XX.X% -- top could consolidated estimates. come guided of think of you to end around our the

I think you last a Tuesday. report actually did in

and math revenue us in the To come of about certainly, where year, expect back half you of QX. our might the in of can relative out improvement on have what we about Medicaid X% that sort just back printed benefit what of we half isolation some plus from. you do if the the think in to of And the that land, up year, premium half, half HBR figure would with estimates we in

seasonality trend we've course, depending got got of We've built-in. And on month-to-month.

XX%, got the XX%. X/X of X/X X/X but as think currently consider. back on, then before, that's visibility to of rates, the said in and take apple have about zone bite at we sort don't to XXXX. sure, another is for which 'XX to we We've other factors But those we've are this into will in So get XX/X equilibrium. to

So of that expect back to of we've sort influence to continue back, rate fully multiple got get to acuity. get equilibrium in we cycles here to to which rates

Our from Sarah James. next comes question

Can this first book year? So for of you stayer get help like it's full your, MLR us 'XX looks uptick 'XX. what a far like, core half versus Medicaid so the the sense in

related are there? with factors and there redetermination going other to rates, what's Just on in

Yes.

the on bottom it hit that and to for in this. I a is Drew the the post our remarks, both of increased think of the But said that are HBR is of me the rates some a our the mismatch between walk good acuity and is be then driver is acuity, data level, pressure primary this we Let at fixable viewpoint high would we through confident membership line, dynamic. temporary and redeterminations as underpins that which and

said of from you outcomes of that. trend for my state-by-state there out Obviously, there list we've like called behavioral programs dynamics, something there's drug we're health. before, and population. here preferred change then remarks manage And We always are or that to active pockets that watch. we in the heard very As terms to if developing that a

we've able support watching think we're underlying shift. I consistent talk past, to then, we're actively and stuff you was So that on acuity driver to really And isolate that maybe with how that. view the very the called again, cohorts our in the Drew, about out in what can managing, predominant but

look And remaining one that go Yes, -- stayers trend this of post deeper and rejoiners you're as we business here? James, a And left Or members. right. redeterminations? isolate is leavers, for, there new we right. Sarah the the step can we're Sarah, then can with stayers, we mix really is you're Stayer on

members. can the go continuous We actually into

members, trend a go And stayers, the into stable. which of looks we pretty so is when continuous subset

leavers, we versus stayers lifting has deeper. handful between so spread went stayers states due to the and of widened, rejoiners, that largely, And that believe, a leavers and to back up

Medicaid, membership. that the Therefore, out can a pushing administrative utilizers see lower in you expected little we terminations. than You We're out that were XX.X and in saw million more members. bit of our lower around they

care. of that's one cohorts, good that dynamic growing then a But ultimately. And those us, obviously, tilting is those the rejoiners, towards for in population which the other seeking are that's

of in So contributing where widening this It we're XX%-plus, a gap and and for to no including, that's months, to as is HBR well, a widening. the coverage. that's premium interesting dynamic, break number higher in coverage eligibility had not be an used getting

dynamic not impacting in Now under we're And wash break that the results coverage. on will rejoiners but for the the out of premium as HBR. reported is those getting over next well. another pushing with that's XX% no we're ultimate the year, number And months that's

Well, states. that a and add, data sharing we're include the dynamic in that just I we would with it's can

has in forward has able again, which dynamics. was along, an sharing. favorably dynamic the process, this data a rates. influenced think anticipated on we this well And And data as throughout to often took is the precisely so I that these to And approach and half obviously, but all we've us the bring early quarter why that different particularly served we're second

question Research. Lake next from from Our Wolfe comes Justin

questions. of Couple

guidance First, if MLR just the get some to of for you even that's out and X.X, maybe the I'm wondering us original second XQ? on to PDP you segment XQ half MLRs. MLRs on going seasonality versus your update between might by

significantly. a understand It you here. how premium at could book. the should you like big then I'm pretty if your subsidy to given looks increase going curious big lot should a help year-over-year. it Part there's And look is D, increase been of us part this think in This has changes of be going on on we a federal

for profitable of in XXXX about there? approach you How given this the XXXX? investors do all you should how think Is the changes in risk/reward it

guidance but then Yes. we revenue PDP, XXXX seasonality that give a tailwind. the not -- specific heard can of me hit you from is obviously about and talk Drew stage Maybe PDP at We're can XXXX HBR. let

process, CMS to leveraging week. see data that a we and from to approach next expect of the has taken frankly, the experience think I and of decades first team have really a data thoughtful bid set

the has And increase, volume a view standpoint. line product in aesthetic changes we IRA. as we've with down, as alone said the that as said, you just from able a from profitability to whether this will before, or be stand to premium But

Yes.

disclosive. the peers we -- on do that. seeing not segment, We by lot the actual including we're you I But do though XX.X%, could figure some do you you you think the enjoy a pretty segment, we've by Hopefully, give of give probably math guys not MLR So all we're of piece guidance of detailed each our to going segment, disclosure, that together and the I detail. what think historically out zone those. to by told

And once to again, Obviously, off we the see of it's up. flat The deductible had that in the you'd commercially, it you'd commercial QX. up a wear the that how tick the diversified portfolio. And business. typically see business, tick in then kept That's throughout such we sort is manage that seasonality year. QX benefit

to into one thing that's take account. So

one up the direct And to expected or that times explain D the in to we subsidy QX $XXX, fact just then I trying March, comment of said Part subsidy PDP. at more top year. $XX go on multiple over follow-up the conference direct just on the this

goes So -- the that obviously, largely yield the yield. into goes into

files will be more but come know landscape the next to step-up. stand, little yield, membership about pretty know we until a where shakes where premium said September. positioning In as So big out Sarah in out. We'll Monday a we'll see competitive the bit won't have we that

Our question from Raskin comes Nephron Research. Josh next from

changing you that if from than on got the much and And tailwinds are at there? importantly, better hurdle to we I payable you over, billion thought? back about dynamics about was right than what PDR, so you XXXX. And you your be Why on some risk X.XX% consensus exchange guess do sitting the the developed think curious just different? appreciate expected the Or that you get the but [ thinking more ], in directionally as be get for sort But get you I something is should spot? know I'd headwinds, you've the I $X.XX think to about that think of less has the $X.X adjuster the perspectives

risk on Yes, the adjustment.

we there population So let's at estimate at just sometimes then the out, trying also believe done that what vendors. have providers, XXXX, of to marketplace server. for in not we're we're acuity what next we year-end, data get that's edge at to in to submitted the where get from sitting run the the not every into data, point months, year current, we acuity and all just the going sit X say, over encounter the XX/XX/XX, data, estimate time, And sometimes is claims

so a got accumulate that on execute we've that And lot get of data and the server. and edge into to

there at at the year So executed say data go some really reserve. throughout at We better to Wakely year-end that. every estimates are into year point, strong. We've that we got from just know least, that relativity. that the But I'd get

It's relativity. zero-sum We estimate the have industry. to in game a the

So you're well. estimating what other people are going to do as

bit always of And thank -- We proposition, expect execution. maybe And news. good really would little a strong we the don't try book our favorability, this I to be here game. while for conservative was because zero-sum but realistic with assumptions a a since would it XX-XX I to teams is

on helped. this On consensus and early. consensus, yes, or we're not going opine Hopefully, tailwinds the headwinds give to guidance

that of for the on of amounts through good population appropriate and of as part color And adjustment You from rolling and getting risk acuity that's some for could the marketplace paid our of you now. year take pretty think hopefully, execution color to sort year. the

UBS. comes A.J. Rice question next from from Our

have I the One, public X trends. guess questions. on I exchange

the adjustment But XX.X% this true-up, -- I I the year. out the for a ex XX.X% tells you on range guidance the think assumptions risk know half you year your ex the official are in little MLR back of in exchanges. to bit if your what if was public on out be to

to confirm call that close that. like out any or pretty tailwind. you're maybe It that. sounds And didn't want just you as headwind I to

for ex on to that you Is difference true-up whatever way it? year, this risk the think that next public you're carry year. exchange So think to at the you can margin seem about adjustor

XX And months. time? look and a then have actuaries you're look discussion Or adjustments state rate about there's maybe period of based they do updates just on Medicaid make long been real shorter on they full back to how quick. back, seeing, to some The

the Are of X year, have the then rate Each July are then one assuming Those are enough progressively Or adjustments the better? you July things this assuming updates the you same. update that then next October, and the information? year's get those that about they as information? average all they get January on

Yes. Thanks, A.J.

from in the is had, starting on a what There going I data. you say But of we've a natural seen, the for the sort frankly, complement to right. full state rate the if see course look normal a we're look think of have updates we've been rates. in in beginning until back redeterminations, that You're Medicaid at of teams it normal easy to wait would we process

And moves. early so saw we

I in continuation half think favorability more rates. little with even to back speed reaction maybe a that of what seeing to relative we trend QX in bit saw the of we're a the materializing

data from so is here, saying we go we're supporting even really, what have more as that And we forward.

terms And the dialogue apple rate have sure and active as in to each we and full acuity so and matching bite making better we go positioning the through. sufficiency better with think of relative I our states, that gets at the

accelerating that momentum think feel. is So something I we

there's and you're continue do we next if seeing for rates, of in that we through X/X. half And I hope to and it then work year. to we would as think the second get expect additional need

performance? talk to then exchange Drew, you And about may want

Yes.

XX%. guided So A.J., originally midpoint to We you're of right.

$XX.X of now the billion guidance. revenue with commercial On the book, updated full that's

we're $XXX sort benefit. excluding the So on track, million generally -- yes, despite growing of

good. that's So

we're think approach always to And risk XXXX about that. as be I trying how prudent we with mean we adjustment,

year the marketplace nicely. really but XXXX sitting and that's as that not something pleased execution XXXX well, tracking the But So to is year also in think just incurred QX, about. the team, benefit with

Kevin Our America. of from comes Fischbeck from next question Bank

for on Ron Adam is This Kevin.

to also One they're of your peers appear from pretty something to Medicaid these insulated some having And as be saying I of due benefit point. been risk called into that's a corridors. out deep some at believe pressures you've

also mentioned? if in then it the quick how size trend So And ask could higher one what thought what versus rate you corridors could you seeing and to that amount gross you compares clarification. X% the that's you're help before I composite these

You your you'd mentioned now be Medicare in optimizing footprint. business the submitted,

could includes help that those exits? market if membership in And wondering the markets? size you if So

Yes.

Medicare, relative really but a even thoughtfully done footprint Medicaid mentioned, as is a challenging with of I book the terms the the XX days that's good long-term further -- because in thoughtful team year late being our job about how defining it to think strategy the I So where puck consistent to with also that we going. align has streamline and

see handful of that a And states exit with longer-term mind. will so strategy that, as result in you of us a

in of a sort They in are more Yes. corridor, peak corridor risk true depending whether now our of is those the profit a part say few different during on would COVID come risk and And minimum business. COVID, state. state. forms, a I a it's steady sharing, a MLR, era, a the

line as balance ultimately we've And to That's retrieve spans and if just of our years, in long-term takes QX. sheet to return for of go give and you able necessarily. balance be it outs, to part collect a run for you years our that. through the to it on other got liabilities, billion split that states multiple number, look liabilities but current wouldn't the out years and premium Medicaid there's it machinations $X.X to as is sheet, at pick items, payable sometimes specifically, between a there's balance payable you But at the sheet

comes question from from Fidel next Stephens. Our Scott

how in X% of given long-term and what's target? ask would adjuster, that here you the Just up just wanted for suggest to about your when thinking the marketplace first just risk X.X% moving exchange to with sort pretax for we a on guidance margin different few sort think now against embedded pieces of Obviously, margins. that the

a would states Centene And sort if be a I know of then as of there's to lot operating lot separately, -- with obviously, year-to-date been helpful flow just it been for and certain across there's the timing with industry pieces dynamics of cash moving well. Medicaid.

into us So that had some could give year full of sort expectations that operating would your Drew, for maybe helpful you visibility as well. be you cash flow, if

one elements of in because, this the the positive pay $X.X quarter really day QX. and the of flows, it's swing I billion to you quarter want year, to negative think point, first states got of the based the Cash can our when next last But $XXX first we day to look half at Yes. your in business, upon can the not QX. guidance so of us. We've or in from exactly were million they

because The first half the of That's sort cash a to it's reasonable of the that. year, of errand fool's dynamic. predict you can you're look government programs at flow depiction. But a quarter-to-quarter right,

cash the getting important, the deployment. then of capital out and up though, dividends subsidiaries subs is What's and to

million half deployment we're we're we've So what do with first repurchase. half And able the in That's the to even in consistent the $XXX capital before. back the excited here of share year. said of about of year,

segment, top of let's the margin. X.X% Commercial would with we originally excluding I And that margins the $XXX million be to had obviously, going stick sort to discussion million on we the that. for back just think into on that well X% being what of the On to pretax the $XXX track said marketplace, or A.J., on -- then

So We'll sound about expect just for more year. good and our get as 'XX our product and further more we and next to excited the learn positioning, about positioning into market all shared their the And expect Marketplace good team years have entire supporting this Marketplace the partners 'XX. year XX in to experience of across of we service performance grow. in company, another and

comes Our from Jefferies. David from next question Windley

year. And a full have risk to range. what quarter, adjustment the you exchange the year ratio Your if seen that been benefits in us if your range for the out, those G&A direct you might are was would with subrange sustainable? have Wondering even below benefit might full that the from but called in some other you favorable

track Yes, on we're that -- on David, quarter, I'd in to SG&A And it the for right provided. still previously range ratio. right we're the track say X.X was that X.X we

being midpoint X.X. that So

ramps enrollment year. typically always with is all the cost. highest QX it open the up So the during

quarter from of settlement because in were the revenue in the denominator aided we marketplace. the having bit more by right, a You're little XXXX risk in adjustment

come. we're And and So the but do. say I'd to -- pleased on more execution. we track more right There's can there's with

of set I've out the to creation Medicare the sort in SG&A points company. our of multiyear working is that, a value of out Medicare that's when plan, now in And we original got before, the couple on company. business. basis of of we take of launched and And rest hundred just leadership conjunction said achieve with our part that initiatives we of the the fiber to

in not we're but with track. to that expecting we're this satisfied with SG&A, on year -- achieve we're what So

need we more, few years. next over We and will to So that's good. do the

Our next question comes Bernstein. from Lance Wilkes from

seeing And pipeline. to successful wanted Medicaid is? outlook in an particular, on I more for being you're get Great. rejoiner outlook I successful to about ask of scoring? your as where the and update wanted far as less you're What RFP growth. And what kind

Part helpful. But well, imagine background as could going little demographics maybe you most? And a just you also what's Kind much And Over little book, can which if describe D book? a clarification. in the I is that just is that give how would that the there? cohorts of description you've of of and the us age through be as got LIS,

Thanks, Yes. Lance.

the of terms some new in and presence changes results, was very maintain expect put the trend. enrollment statewide underneath an Florida, board update as maybe last hit can great of results on Let of about stable we rejoiners, obviously, the contract the including what Kansas. I are as give well where we're RFPs. quarter, that our the be bit to Michigan on Drew some little in RFP you talking to very numbers pleased and me to But a

new think and new I opportunities exciting bodes opportunities. for organic Medicaid. but look programs about we've well And think markets, expansion really about think to various then before, cohorts really we this growth what as we performance are ahead talked these states, new

also to capture opportunity and ability Medicaid we've think care Arizona, us, new state. last a opportunities. these a XX and for North months tailored demonstrated the recent Carolina, the in a new market Delaware was both is opportunities in I for expansion Oklahoma then And plan. our Centene. long-term expansion new

access to again the in really the those to see priorities have that think And want in and a programs, work to out design for I that and the experience have direction the again, So members. time this of organization results. unique that ability of I power comes think the our differentiator, the each to states really I our a understand think of teams state work leader the solutions time take local the and virtue that leverage by approach to we're the confident community incumbency ability has of that with we and we local as our RFP the that health

the bandwidth We and obviously, pipeline through, as we and pipeline. now good the the even the state offices. is feeling really get for active activate about redeterminations, more So pandemic Medicaid through to there's think continues

there. opportunities interesting of lot a So

down And started members We're that having coverage. of to in gap playing spread. Relative that states, tick the to no on vast again, continuous rejoiner which coverage, It's dynamic this now, majority that's to through that, mature the touched and the most of numbers. creating shared is now with XX%. he all rejoiners, those in less those low of again, But the having Drew than of premium continues for how sort rate XX% up.

And demographics PDP? then, Drew, about do you for want to talk

XXXX. us. strategic we're for PDP, a That's business #X Yes. position in

got PDP by beyond. $XX the think we've about shifts 'XX before, spend I And company business, this we'll but of about across we the and and we've how of that control. pharmacy see that driven in said half billion is that

auto-assigns. leading But that position means we've a got in

next Inflation premium Act So all the that we've for got changes coming are higher product. a of been And for year. Reduction second the and product low the of I call, we've the X products, about, IRA, then in a year mentioned as premium the thoughtful QX

demographic want, data in you And ways. We can of to a that or with actual the number buckets the extent can slice get afterwards we of and data. any if membership for dice you of the

from Andrew from Barclays. comes Mok question next Our

I to Medicaid follow here. to you're saying quarter MLR. make like that at that the so, I running from say, SG&A X% suggests with an It now. right X% wanted close this margin is of, sounds Just And Medicaid or is pressure pair sure peak this XX.X% progression when margin Medicaid

half. second in half rate the on your X% book getting you're of Then

the with path at recovered that the to margin think in X% should Is right closer way business? to you put Medicaid So balance the margin that year-end, the about XXXX. on

our which we business to then remember embedded distribution is the in we got have our costs. goods and commercial you I And certainly, QX. XX.X% expect is pretty have SG&A mean to products that Medicaid. sold peak the lower think, out, that's price. lower. heavy probably of of I allocate cost on It's broker We've be -- to that with at you'd than the

distribution about of think So business. the our you to have

Medicare well. is as well above distribution there there's Medicaid as because well costs

about that SG&A aggregate Xs. you the think our high look at when So in

on of expect year we better that revenue get to and X%-plus to back rate in Medicaid we work the the and yes, about continue with in impact to execute half 'XX do. half more So our carry as do then that into of

next Ha from question Michael Our comes Baird. from

then a question. Just real one, and a quick

So one from adjustment out of rate retro peers negative your California. called

data have MA Just program MLR? a stronger star it more like curious how how And ratings, much real second quarter does Medicaid that progressing. impact your you on sense the question, then you're and complete sounds on

of surprise So be sound from a expect update, would there? toughness that do much no with actual [ curious early still But to October? factor how potential tax you expected you right now on items do an have some have ] admin build And visibility line actually swing resumption? to now strong. the all Any thoughts you how top you have of much information,

for thanks the question. Yes,

pleased heard, on with line as internally. STARs, you the we're is bottom very momentum we're the So and seeing progress

improvements We are year-over-year the each of tracking chapters. key in

results the yet. CAP don't those yet scores have in don't points to final Relative October, have cut and obviously we

in and So range And expect meaningful there's results entire internal expectations. that the tracking feel a about we as step-up said, our nicely October. in in a very with I range good But projection. are

line quality you've is result different a outreach the really like along enterprise-wide and top is things the team, member our the this of that all investments and centers. activation all the of awareness us the work organization, the and process, more alignment, continued by way heard the And about priority, of call governance talk across

to relative make differently done data member lot the of provider efforts onboarding hood around a work our and We've under organized to We've best-in-class. partnerships. digital experience

terms also creates visibility so the XXXX. in then in that of And momentum

service XXXX is feel will results improvement, So just drive quality seeing It's not dates in the think well business. important stars our but to the accruing about what fact the XXXX through lines other note this work of of score as we're about halfway the we're improvement there. good that that and

them And about to in are terms and the factors. how able we Medicaid, to RFP deliver important in are in and think really being We particular, members. quality success scores by of viewed value state to

So improvement, all fact about just not sustainable will in, we the programmatic deliver we in go overall to quality feel we as really forward. be able good stars, that but in

on then in SG&A And I Yes. make question, clear first, sure on question. was the me your let crystal last

then Our into in -- Medicare sort think double current are of terms as and Marketplace you Commercial about guidance whole is high X.X% the or think And SG&A digits of to X%, as that about relativity of a again, of the Xs. in Medicaid. once terms that the so as call

and And what was same in to we yesterday. in our operate every then, there's yes, At as state minuses size, pluses referred the quarter.

didn't we out. that the So to need feel call

next from Ryan from comes Our Cowen. question Langston

in versus, don't anything view I say, I assume your it. Advantage, if Medicare improvement heard for year-on-year. XXXX. enrollment you broadly maybe tailwinds have and some margin can just just into to on be on I or that it's would missed headwinds think even But unless the I us directionally? Appreciate would priority the XXXX, on refresh growth

shrink XXXX. before, said to in we expect We've Yes.

think think the opportunities. Medicare what Medicaid business is well duals about going [indiscernible] with and and of we we to As run, convergence the in long serve the company about this

a So PDR $XX for PDR the year into million, a in $XX publicly, actually $XX that million, PDR for we year, And couple zone we the did and expect of booked million, that this is P&L then we're 'XX. XXXX. the revenue said the times mention booking half then tailwinds, of booked of in XXXX to don't last the I that fact somewhere have

then negative of margin and to towards about what at push the got and we've away is chip opportunity the first, in rate So breakeven, run Medicare. margin degree talk we can

or tailwind, progress expect and we multiyear the tailwind. So is us mathematically, a referred about that's Stars lead going Sarah be a a to to that excited view. to, over And where it it

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

what a Two long-term business, thinking Or it you're you XXXX? that any D the Part for for guess, don't be on of pharmacy product? lot there's for I prudent sustainable to midpoint is mentioned most X.X% guys changes into is how quick networks? And you well making price to in you then guys the my in mind. focused XXXX. D guess, you really if I the me, ones I'm margin. rate? exchange on the of Drew, follow-up changes is run are about is Are And would significant Part kind

Yes.

in. jump On the Marketplace maybe just side, I'll

I to do we're we've is think as think expect X.X% into to grow. said And we well XXXX, for X% we range. the about what positioning

have can in We expect growth. the we continue for view grow, but profitable strong marketplace overall market to XXXX, positioned margin the to and a product deliver that

balance pull smooth how really hit from and phase PDP, thinking went cost about access thinking effectively about XX%. it's program. and the going the there, going And on can let thinking hit Then earlier, member deep of Yes. MPPP, all sold. IRA are but me the to are thinking goods and down, the changes, optimize always as XX% These member therefore, highlights. network you we catastrophic go we're and of member manufacturer QX about transcript payers share behavior, out-of-pocket the to underwriting the the the cost about Obviously, --

for as prepare continues that So XXXX. we

session. to And Sarah time, question-and-answer gentlemen, conclude back London like this floor I'd over to we'll turn for at ladies our and the remarks. closing

Thank for morning interest questions. great Thanks, this everyone, the the you. and

I just really want this up ahead around business. we to As the our wrap lay excitement call, that for the opportunities emphasize

modernizing organization, we enterprise, core about making as feel of good progress and and significant the performance are, the business. really We strengthening an the

team, grow energized have the we by As markets to serve profitably a as and we're the really we forward. leadership we also room go

morning So forward the this future updates. Centene, appreciate, time interest again, your in to look and and

for joining. do today's presentation. conclude Ladies and conference we'll call you We and gentlemen, thank with that,

lines. disconnect now may You your