Molina Healthcare (MOH) 8 Feb 242023 Q4 Earnings call transcript

Good morning, and welcome to the Molina Healthcare Fourth Quarter 2023 Earnings Call. [Operator Instructions] Please note, this event is being recorded.

Standing in for Joe Krocheski today is Jeff Geyer, Vice President of Investor Relations. Please go ahead.

Good morning, and welcome to Molina Healthcare's Fourth Quarter and Full Year 2023 Earnings Call.

Molina's Keim. CEO, are our Zubretsky; today Mark CFO, me President Joe and and Joining release our closed press was available A announcing our distributed XXXX full on after earnings year the Relations market Investor yesterday is fourth and website. quarter and conclusion the a call, XX this available replay of be for after Shortly will days. the in to the The release. access numbers earnings replay are

of X, of the we remind presentation, and those For the made been to of remarks rebroadcast updated of February you call. the who this today, are not have initial as that XXXX, listen all Thursday, to subsequent you earnings

On to most quarter release. reconciliation directly A we found and this the measures XXXX of earnings GAAP be call, fourth XXXX for will certain non-GAAP our comparable with XXXX refer these measures can measures. in

forward-looking growth, we but long-term activity, acquisitions guidance, projected Medicaid our call, will including, earnings power share. to, regarding awards certain XXXX RFP our and growth revenue recent and earnings strategy making be and our per statements, statements the related recent redeterminations, XXXX our limited embedded not M&A During and our

completion Form report to prepared with our call our X-K questions. risk and XX-Q all the open We our review risk SEC. cautioned to of in filed will that our factors materially in results to current that annual listed could of and Form to After XX-K with SEC are forward-looking cause your actual our subject as statements differ our our Form as from certain remarks, factors well take advise Listeners listeners the risks filings expectations. are uncertainties we discussed the the

over Joe call the to our turn Joe? Officer, now Chief Zubretsky. will Executive I

several will Today, morning. good and Jeff, I topics. discuss you, Thank

and XXXX, initiatives quarter growth guidance for for earnings targets. long-term and our Our revenue and our growth, full fourth strategy financial XXXX affirmation an our our premium the of growth year sustaining profitable and results

of premium our adjusted share $X.XX, revenue. reported billion with earnings performance. Last me of Let an fourth diluted per $X.X start quarter night, we

fourth management well, metrics discipline. demonstrated strong medical seasonality target experienced unprecedented Our cost despite to performed performance perform the typically than quarter and in withstanding of Medicare medical consistent quarters cost the operating year late higher well continued the cost very costs, process. medical and impacts and with experienced. prior results Marketplace Medicaid redetermination

Our and of performance. fourth guidance with strong quarter year a represents year-over-year of share of and growth, earnings year X% squarely $XX.XX. financial of initial our completes per our Full range above XXXX operating to at long-term XX% XX% line XX% in target adjusted $XX.XX least

growth, billion of our end revenue pretax full and range heading X.X% at margin is year-over-year long-term X% premium Our of year XXXX. of represents into high $XX.X our target the

of factors process, state for factors prospective solid Medicaid's flagship redetermination over a all range. representing jump-off long-term land various point and within Throughout our and of shape utilization, full These the year to an managed year, reported at XXXX. rate through medical that cost performance, result minimums included changes. the into MLR corridors a full is revenue, have the Medicaid, number business XX.X% target we In XX% our MCR which we

full XX.X%. was In Medicare, the year MCR

in the benefit While the that confident utilization XXXX. I due XXXX our not we supplemental return strategy, business of our will expectations to meet bid in-home business drugs. am target and is operational did adjustments performance profitable, high-cost and services to benefits, to various improvements higher design margins

mid-single-digit strategy. full margins. is positioned This the our of low MCR reflects below year, to In which business grow allows at our target small, silver end reported and the a for a stable now Marketplace, execution range, of the us to we rate, successful XX.X% which sustain

business, XXXX. Choice successfully awarded retaining our serve profitable execute August, to Medicaid In milestones closed a we In re-procured recap In results, on financial acquisition achieved XXXX. have acquire the the we in XXXX. My growth we addition in program, plan that our growth continue X had in highly once in strategy a New STAR+ the July, won again for In growing all XXXX, January the strong Health Wisconsin we LTSS franchise. Iowa were June, we September, following California closed now to to expanding Bright our we and announced we contract effective Texas Medicaid which further to In our share. market-leading the likely process X, successfully January, RFP, beneficiaries regions of agreed state we delivering we competitive contract late on to Mexico. state's Medicare In in launched market which in

finally, win January our a our effective County, Los launched process, our competitive health bid successfully in doubled Also on X expanded And Nebraska January state. the plan. including we platform, Angeles of and highly the California business another X, which we size in launched after

RFP To XXXX results, doesn't and acquisitions which initiatives XXXX. XXXX a our pipeline be in which successes represent realized XXXX there. of understatement. execution stop are annual all which would in an the The But in opportunities, was our of these guidance fueling extremely of of say trajectory with Collectively, future most will of our the growth growth fully strong. our pleased we is premium of growth story portion and $X be is billion revenue,

Let with me begin reprocurements.

Michigan. RFP Virginia and our contract for responses have in We Florida, submitted renewals

we proven confident all and of our these are states, retain partners X are We these grow and ability with relationships. in to

is $XX active including new just described, over years. the Florida regard several near With opportunity, revenue states coming premium or term, opportunities, state upper bid in of opportunity the total billion over to there

confident capabilities of ability track demonstrated to bids win in record, our remain submitted Kansas in to and We continue state new have contracts. we referenceable our and Georgia. With states the already

capital completed premium will allocation having M&A component This deliver and driver. be paid growth transactions revenue. have acquisition continue we X M&A initiatives, we to billion confident of our remains over robust of respect to acquired to which XXXX, to our $XX a value Since in opportunities for this actionable XX% our With are with our strategy. key of from ability pipeline we

least our Turning now outlook previous premium our guidance. revenue year-over-year project represents We consistent per to XX% at meantime, $XX through will me XXXX is minutes. XX% detailed build year-over-year the and the XXXX earnings a XXXX of approximately project take But guidance with in $XX.XX, billion, of adjusted growth. some few We high-level you growth. share offer in let representing Mark which commentary.

buffer impact footprint, core in revenue acquisitions Medicaid, impact margin by growth projected wins, billion to out are real, respect combination perspective, rates, retrospective, XXXX a premium The of offset MCR playing our but our we well-balanced From predicted. significant. the corridors, projecting guidance as the acuity the the capturing Medicaid as guidance The process. redetermination fully partially of this of have largely to contract are redeterminations. impact the a Our business, to and basis, growth Medicaid is represents a impact. $XX and current in our in the financial shifts acted With range. new not of long-term trend we be On same-store prospective and is earnings within considers a risk

benefit operational the mid-single-digit a strategy, We expect adjustments to to in business. and in our of result Medicare to improvements return XXXX as bid design legacy profitability

has pool been has the is Our competitively risk priced Marketplace stabilized. right, and positioned product

XX% membership grow expect to over We revenue mid- to and single-digit to the high margins, business grow XX%. achieve to

recall, On we by embedded store $XX.XX, Mark share the may per XXXX now share of earnings, his have remarks. the of in of our as new $X $X expected the per store updated will new top least of you accretion earnings which, growth. review our guidance represents at share per produced components

the with various a company-specific guidance a XXXX starts confidence earnings and XXXX. high-quality our could exogenous Our factors, in and takes then earnings of baseline account that all impact XXXX in thorough

a our Now few trajectory. longer-term on comments

point reaffirm our XX% last targets to Our adjusted at XX% Investor premium XX% and commitment guidance we XX% targets growth. committed of XXXX earnings to that is growth more our picture one today. Day to share May, that per and these long-term We validates data

With of low the outlook in in to growth see the execution our store the growth new of we driving XXXX, already our current long-term of a even XXXX, to initiatives achieving of the target footprint. growth earnings end considering clear before embedded from emerge additional majority expected $X and EPS

very inherent we growth for and pleased the outlook summary, provided with XXXX our deliver our profitability earnings to are our embedded the guidance trajectory In XXXX. XXXX and in we performance,

Our our confidence is data-driven continuing demonstrated set. fact long-term historical achieve targets to following in as by the

billion approximately existing re-procured have in $XX revenue. We

annual have added X through in share revenue per We expect of we XXXX, $X earnings new From harvest states. we growth $X share premium earnings the of our XX% wins earnings. achieved revenue billion year-over-year. XXXX, And expanded XXXX of share majority or per premium guidance, approximately embedded and of growth growth year-over-year, contracts to XX% growth. for XX% annual to XXXX per XX% new

simple. and clear is Our strategy

government are of assets for relying We individuals assistance. in business high-quality the to providing healthcare on

of to the which deal to maintaining great continue be we future and quality. that clear also commensurate with simple. why strong, while Our strategy to is standards capitated consistently and business make a has risk, The We margins trends cost on take rates of been will target and business are take those execution model trends, manage higher of look our our is model and achieve with medical or confidence.

group In such members. serve and want privilege access who delivering associates my It XX,XXX our high-quality my conclusion, dedicated to healthcare professionals. is with of our committed I are extend to to to capable thanks to special to a

to Mark additional I for that, Mark? turn financials. With over color some the call the will on

good and sheet and our performance, our Joe, some quarter Today, additional XXXX the discuss details morning, full redeterminations Thanks, and on year fourth everyone. balance guidance. I'll

year fourth our and results. with full quarter Beginning

This and For total reimbursement note net the billion G&A tax margin approximately April. premium and ratios, revenue modestly was revenue. revenue but to total no that includes item has quarter, our distorts economic of reported in will million $XXX MCO item California consequence. retrospective $X.X reported we billion for $X in our I that

management. On was was fourth and continued consolidated medical XX.X% full our our reflecting strong MCR cost XX.X%, quarter a basis, year

line Our MCR with our in was full expectations consolidated consistent and with squarely long-term our target range. year

expectations our in Medicaid, of moderate plan some fluctuations. and MCR XX.X%. MCR acuity the from Iowa reported Medicaid of as Choice was The from with net several as trend states, segment, corridors a our quarter-to-quarter cost our the shifts quarter effect medical redetermination our In well acquisition. major the health normal and My fourth included were pressure additions in our impact categories line largely Across MCR and

within consistent was and target MCR our Medicaid range XX.X%, year full with our expectations. Our long-term

both our was In Medicare, by services increased and long-term full and our was and supplemental in-home benefits, range of our impacted MCR utilization target reported year drugs. quarter XX.X% fourth XX.X%, above high-cost

Joe our benefit adjustments business we design operational will are as to in our mentioned, produce in XXXX target strategy well improvements bid Medicare margins as confident As that XXXX.

this reflecting quarter In continued in XX.X%, was margins. success Marketplace, our our target fourth MCR reported to returning business

range. year MCR Marketplace well below full our target Our was XX.X% long-term

as X% was quarter the for ratio reported. G&A adjusted Our

premium from This accounting pass-through when ratio expected result restates New new business Mexico wins contract includes California, and for well implementation However, Medicare to as the seasonal new California expenditures X.X%. item, tax as Nebraska in marketing. for Marketplace and the spending

Our restates to the ratio full the the G&A recognizing California adjusted X.X%. ratio was X.X%, fourth full tax quarter, item G&A in year year

a our our initially expect acquisition announced Bright contributes effective $X.X Turning which to approximately net price be EPS. we acquired tax the transaction with to XXXX first still and X, successfully at closed members adjusted was January year. but of to is premium this year premium terms. dilutive past $XXX The million XXX,XXX acquisition. than benefits moderate final which adds losses, We acquisition expected billion to of the We lower deficiency in $X.XX reserve, this the business

we in $X an per share Now the our increased Bright the owned ultimate assumption acquisition that as margin. weeks, for have we final that deliver accretion X business will have rate of run confidence

in dilution. Bright this of store first are lot first the this year from of the acquisition year, updating to per XXXX earnings $X.XX share, expectation Given the the $X.XX modest new we embedded reflecting

quarter, Moving XXX,XXX we estimate by the full lost on XXX,XXX. to members driven the Medicaid redeterminations, we redeterminations. to bringing approximately year figure In

our estimate and the include business well XXXX are pandemic business. XXXX new members as gained million X We as now of in to legacy to additions updating during the

through than nearly verification, rate, high previous the quarters. are XX% seeing rate a consistent with of we procedural rather Given disenrollments reconnect

expect we described just continue, membership the reconnects months. lower level over As the to restate to losses coming a

gained, members from We net continue our of loss redetermination implies process. XXX,XXX to project ultimately a updated retaining XX% of the which

growth to losses significant. X.X the expect XXXX XXXX growth net impact offsetting members, Medicaid initiatives and million from The ended we from with is X-year We million our a members, redetermination. member with XXX,XXX period, a X.X close out positive over despite

redetermination now to for states impacting XXXX. adjustment have Moving rates. All now into included Medicaid our We our of XXXX of approximately visibility but one rates acuity have an for premium. XX%

We or experience rate through adjustments, rates given partners date. continue to to work with mid-cycle our retroactive ensure to normal the state appropriate cycle, the

offset the and actuarially We they XXXX considered been in rates that sound for requirement assumptions are confident the will our rates as guidance. may have MCR that supports Updated trend emerge. trends Medicaid

balance our to Turning sheet.

foundation Our $XXX company parent the cash the million subsidiary leverage at $XXX for and and year. our of quarter to Medicare end strong. EBITDA XX.X%. ratio X.Xx These was and the remains of trailing position of was We capital approximately Bright with approximately quarter, reflect acquisition of our Debt million, a dividends our at additional ample and investment. the portion was harvested capacity capital ratios cash debt-to-cap the first growth low in after XX-month the which fund just balance used

payable the our was end claims at strength Our XX. reserve remains position. quarter the consistent in quarters, approach the in prior are of confident Days reserve of with we

additional we expect add In approximately with membership our on wins some new guidance, Now XXXX from contract Medicaid, our membership. XXX,XXX new recent details beginning to members.

year-over-year. lose over redetermination to remainder XX% X.X members of of expect approximately XXX,XXX the growth or million process members the membership XXXX. XXXX net in We result year-end The in

XXX,XXX XXXX with the to we year-over-year. members. XXX,XXX Medicare members, our acquisition added In XX% legacy Bright with business, Medicare, representing end Combined expect growth

we enrollment, XXXX open on growth XX% from with XXXX. based XXX,XXX Marketplace, representing approximately to In expect year-end begin members,

the growth year-over-year. to members, ending continue year, through by representing conversions XX% expect the redetermination with We XXX,XXX approximately boosted and growth

are medical which for XX% bodes Silver, well We stability. margin still

representing is approximately Our billion, XX% XXXX premium XXXX. revenue from growth guidance $XX

Choice revenue billion to recent tied our of is including growth Wisconsin. across billion year finally, of acquisitions, of our add this, To redeterminations. of $X.X $X.X a Bright offsetting of from full revenue $X.X drivers $XXX and comprised estimated we RFP billion wins. a from Medicare several is growth and revenue Marketplace. organic And recently growth billion items: of full from in from My these $X.X impact revenue billion closed $X.X year decreased higher Partially Our million Medicaid,

guidance. Moving earnings to on

We of expect adjusted earnings at least full per XXXX year share. $XX.XX

reflects from XXXX Medicaid of EPS Our footprints, of the embedded share underlying the new per of organic realization for our across $X.XX the growth $X $X onetime current approximately and benefit realization store guidance the Medicare approximately conservative by finally, nonrecurring implementation costs, from redeterminations view year costs earnings $X.XX from from incurred impact offset in investment XXXX, income. of impact and first operating partially Bright contribution the and $X.XX acquisitions $X.XX carrying and a from earnings,

guidance. MCR to Turning

consolidated ratio expected Our be is to medical XX.X%. care

expected of be range. higher end significant guidance Our first at XX%, high to Medicaid at our the runs of which MCR is MCR our store the long-term This target reflects a in inclusion growth, the year. new

range, design legacy long-term be We or the success in at our bid reflects expected to to benefit of Medicare to while long-term our end adjustments the of MCR Medicaid high MCR middle operational XXXX fall range. same-store our our improvements. Our MCR and anticipate our target the is in various XX%, strategy expected

MCR XX%. the of the range expect at of XX% Marketplace, low target long-term we the end For MCR to

select metrics. to guidance on P&L Moving

additions business expect Effective average of over X% G&A well share slightly towards XX.X%, margin million range. the of and new of costs fall new the drive the in our adjusted we second ratio our tax our XX.X quarterly improved we subside, of be as business the count implementation pretax at increased scale business. our EPS Weighted as unchanged half year. year shares target within our portfolio rate the leveraged long-term and We X.X%, to performance weighted of will to course adjusted heavier

embedded earnings. of to XXXX per earnings. ended new embedded share $X.XX Turning store We with

$X.XX leaving base with realization us we Our first To new of the $X.XX. $X at add Bright XXXX. resulting of impact of end loss, acquisition's in the for the year of remaining this, XXXX $X, guidance includes a

further the to our XXXX expect of in rate long-term this We giving XX% for growth to emerge majority us confidence in XX% EPS.

Operator, we This to now concludes prepared take remarks. questions. our are ready

[Operator Instructions] comes A.J. from Rice The question UBS. first today with

things. X Maybe

design expecting largely underlying to On the relative like what trends? sounds that assuming changes to you're Medicare improvements. MLR you're operational utilization margin, attributing Any and comment improvements benefit your it on you're

your you're improvement? middle margin then Is sounding term of redeterminations? How be the thinking there the out And are just you business MLR for profile on the that? thoughts it steady? Is of on legacy Medicaid, coming opportunity on further long Any in about you'll like an targets.

we to was higher little richly benefits, on X medical cash ran benefits designed hours A.J. high-cost vision, more that costs that, card, MMP that respect Sure, confident our the over-the-counter managed, question, supplemental design than MLR product the based of will With we're cost the to some back in side One Medicare XXXX, and third, of We have drugs; LTSS was line. pulled too those Medicaid be the in and a dental, come second, allowance components and XXXX to expectations. on of We honest. bids. benefits into category be business; reshaped back

On in-home where, those know side not we benefit, to LTSS of hours, Medicaid service And hours a for economy it's why corrective in unusual are soft in on the place. increase. actions the we know and MMP

very So in back of to we the XX% Medicare to the the our of end in top confident MCRs in range XXXX. are restoration

shift process process that You rate and acuity shift. also half adjustments financial acted would happen as dramatic corridors to in financial me it to asked state began. latter and I'll began noticeable, partners, but the The it a buffer. said, the was shift acuity our actually cushion existed meantime, was noticeable In wasn't noticeable. be to this it they corridors, was exactly to occurred to redetermination And then the That the and it the introduce for became -- account the had Mark. the predicted. as the acuity turn we way, and as MLR. as let that significant, it The wasn't that the redetermination about began but first XXXX. And We the it of unfolded it frame then into Medicaid payments

actions we compensated to at of what in Medicaid that shift which MCR an call the core [indiscernible] medical trend, little and print the why end that's put bit a pressure compensated on XXXX, the into books. So new at high from acuity going able we for business we're of the the completely rate XX%, includes completely range

as from well. acuity XXXX Joe summarized included we that in from some bit the Look, but And projected, redebt finished also, mentioned, as benefit XX.X% pressure of shift corridors. Joe for a little that of Medicaid. the we

where exactly we tracking expected. really So

new in our rates trend book, the roughly we're partners. year legacy equals our from on Here the that state getting

legacy So a book our where we MLR finished on we're into flat seeing about 'XX, roughly XXXX. versus

an Now why new significant have are acquisitions number portfolio, be it to we our tends big as bit at our we mentioned, both guidance? Just wins. store store Joe adding the go year XX% Whenever and on business an we're a and MLR. first in a hotter into through in of little new

carryover increased So pretty of have we're that seeing in our store. a new get XX% to guidance. pressure a That's on we much that bit on you flat little legacy, how

comes question next from with JPMorgan. Cal The Sternick

wanted about the and than book a were well the running is more this bit year competitively like you sounds It I I think ask priced previously. really to marketplace. little you were

talk margins digit maybe guess, that or bit of So a above? be about first, X% within half that of the you sort range, to X% expect to do towards high expectation that I to you're the upper single-digit we mid-single

you're the going do still you positioning maintain how then to, pricing across more you the position? and again? to I your market second, current Do be footprint competitive the Or you about do And XXXX? think expect total guess, think for

in Marketplace as strategy was and were silver pool But as to pool has we say, pretty has small, irrational much keep is we satisfied stabilized, pricing stabilized the until left it, risk market. the the that risk Cal, our stable.

that volatility, more it can allocate and X% key us. you as us that a to mid- this rate X%, pool We at us rate to to grow single-digit risk we and target to margin. grow business, business the will allows at margin, will and capital target The allows a we'll have the high margin a we achieve that to right of target That's suggested, margins. inherent believe earn that the for is

positioned year. very We're this competitively

the capture to We silver are membership book XX% well us single-digit The future. we'll is book achieving grow. in XX% the year. in renewal, to is year [indiscernible] with high this of XX% mid- growth margins. of to XX% it the And XX% of scoring. our compared still of revenue very #X good counties appropriate year. last hopefully, be grow this which this we at were to the positioned gives book just risk product, in is silver, able goal insight as XX% our All growth, to rate

comes of question next Bank America. The with from Fischbeck Kevin

one overall I could want bringing losing are Medicare still your book? MLR X talking you make the just sink saying Bright you're business with consolidated or margin, I the you're Bright Maybe be on on at PDR, target take first margin if to I you're being but just side. it even in guess the because with questions, target in. going at the a the target commentary sure money, at around I you'll margin to core be about

Are thinking keep part issue? benefit just And that? to pool exchanges, make was an on I issue exchanges. people sickest about not guess, Or really there does that to you of then potentially of some of the and seeing subsidies, about that comes kind lower then population any risk the off the of redetermination the

I I'm component really it's somewhat different to and Medicare to the kick on and but commentary the its MLR, parts. a it situationally, Kevin. are different. think to frame going Medicare Mark for they important quite detailed business They're

you CMS, as MMP rates the XXXX ] business are billion $X.X from billion and received minute. explain acquired, and $X where forecasted bidding benchmark. legacy demonstrations premium a Medicare, deficiency that against in is for You Bright in to billion is of revenue $X.X will billion Mark our are suggested, subject the not the $X newly you're reserve, have DSNP [

different. So the of dynamics quite are book in business the

to develop various the your look in components. order to need profitability view X components at You of the

commentary in Bright how the context, that respect it the for and kick on with Mark? the Medicare as MLR, But detailed I'll Mark to reserve. build deficiency the to particularly you backdrop with premium

Fantastic. Yes.

to us place. the line with So MLR. goes the into effectively With PDR, a the and PDR that break comes benefit in MLR reduces

Bright the X/X target range is our book, So at MLR which our moment. on the component, see below you'll of an that's

component is which the that our of to CMS another rates of which seeing we're course, And third we're into X/X target But able we range. that our bring is of around business, we're DSNP, book, partners, On to that X%. to trend the XX% on and pull the us all the offset guidance. MMP, probably getting our overall, MLR feel told from and that our state adequate quite in are of

I to the of respect second the question, off do into exchanges with to Medicaid had correctly, and exchanges. roles if members With your the remember you coming

the to the of If the the last attrition is point years, and year and a plan natural our members or own we're to XXX,XXX due plans. not X% inside to rate This always to from do ended at the by Medicaid that natural plan we Medicaid The members at has XXX,XXX lower grow membership of but look you pick at a plans, the attrition the already number, X% couple higher but the starting book. competitors' up of started more end -- only year year. still year it at point year,

XX% members of about think rate lost. Medicaid seeing I people of we're a of off coming penetration

add? to anything Mark,

new put MLR. in in we sustaining There's expect on on product. seeing pent-up fourth Yes. services. demand. off is coming using they'll when the past, over our In is more into I and what pressure levels. we're normalized What because they SEP they're come little put not at pressure picked the members, not up normal They're quarter That a third to and they 'XX won't 'XX the and

So and see QX did on SEP a pickup on I'm and QX pressure MLR. good we as not expecting the to in

with Josh Nephron. The question next comes from Raskin

me for as well. Two

what's prices? XX%, that mix that's the is reductions insurance is And up prices? versus membership revenue a geography that Just Or related? market health in state driving XX%. exchange that generally up but raising Is

range, embedded the the parts. by below then the MLR understand us Bright target this on the those how earnings increasing And target how confused I'm booking Maybe still you're just Bright, X that for you're actually $X.XX? year help is to $X.XX -- but

So things, a couple Josh. of

remained has unchanged. mix metallic Our

So related. what seeing all or mix related, you're in that's footprint at metallic is Marketplace not state

And states as you so our among mix we're As a bit. in the much XX maybe competitive we're some, does in not in know, states. more mix our others, shift little

So that would be there. the driver

On the the it the level that a our we Bright business, that booked pulls on bit a before target little PDR actually was down that's with below and PDR, bought to MLR benefits the range.

our remember, Now target that's book. largely legacy our because Medicare range is DSNP MMP and

Bright, below it PDR the in bit the with pull range. On down little it MLR line, our a target the does

of reverse how through with does you guys losing money. which sort go right? And so they're that Bright's how trying the that just year, embedded but confused I'm MLR the that impact more -- it like feels does low, earnings will was I'm up, to the -- PDR, how so

knew later. and question, thanks or sooner that good get a going I It's we that. for to raising were

should normalize contract largely PDR year. of all expected a as allow the PDR certain the doesn't losses the So you into accounting held on operating PDR. There that you are losses out. with the put are know, PDR, still accounting to matters

funded is, the fully we have the their operating embedded small carrying I'll other costs. loss, we thing are include carrying The for Josh. when But essentially a talk fully with even capitalized earnings embedded costs. about or So the always very PDR, earnings,

on costs. the the year, about or cost $X.XX. I paid operating half that costs of $X.XX interest say about this about of I and half opportunity we about aren't Remember, dilution other that $X.X covered half when So billion. have it's PDR carrying by is The maybe the

property, a ultimate because years. a as hole a next now in to that of $X.XX $X hole carrying of a $X.XX Since couple benefit hole, out the said that's I $X of this I'd to over EPS bridge. I'm have the from going So year's $X.XX goes this result, I'm crawl

Wolfe from next Justin Lake The with comes Research. question

follow Just up want on to Bright.

So a here. few things

PDR the XXXX? that me there you give can number First, put you for through

a sheet. Sure. We PDR $XX acquired business million the balance the on with

Okay.

you're understand get -- potentially, the does so levels getting it saying PDR to PDR MLR I And levels? below how normal the it normal the but

the into The and PDR cost the books up with picks all of losses. It books medical line. G&A the cost a bit losses the little of them medical losses

It's that or of up were up So picked one get the where in to G&A the line. accounting losses extent item picked items, there an the in other. get net convention line some will it the MLR just

Okay.

is is it's go that to just point actually seeing come normal, MLR SG&A going So and up your below the next about you're thinking of will down? this, year the math the because

be that, will a Justin. bit of There little

And you XXXX? expect plus full to $X get Okay. back this in

And that's point. important the

The in first losses contemplated value year of here, fully important point we paid. the the first were all,

So XX%. to no at there. ratio. and XX% is there XX% the We XX% MCR The X% was plan XX% to XX% to a and G&A XX% get a running business surprise to down to the down

burden XX% to So XX% X/X very, should to have line cost of where the their of G&A from to very to related, how take it half X% down turn clear sight or a is and we be.

ownership. in expected accretion of emerge is full That $X the year of third to

mostly -- by protected PDR. protected year by First a

down $X breakeven third the of to XX% to XX% full down slightly full or or getting the ratio XX%. MCR Second first and your probably from XX% X% getting of accretion year year profitable, G&A ownership, and to XX%,

that a on a into lot of kind communicated. I of just -- Florida, negotiations. anticipation when of you we're is be normal But as you still any think not think lastly, maybe it that you're that the understanding My MLR where or there the kind whether any be know, in would conditions of would when today, RFP then you round under -- can't there's us be announced? you And assume in the are I might announced, there. RFP, idea tell big around running given should idea MLR. second it. Got

bids, comment We Sure. can't it's the all really smaller plant we as that $X of runs new only on on your observed it to same Florida look, $XX it on our a this. successful the all sensitivity well. appreciate nice We're statewide including wins process, our of X-star the bidding we [indiscernible] But to of to than works in sanctity the contract used is that and situation. re-procured so through business we specifically XXXX, these be and process, revenue used team And Florida, ITN same be team our million in regions. run Yes, billion we it. the back the worked in

go hope to we would expand with great So into we it in deal our confidence, of Florida. footprint and a

-- awards Florida let's currently be There's represented. some later and of not this in are how time announced where the will $XX out be But Medicaid spring. plays will billion process something hopefully, we announced see regions revenue

with The Wells comes Fargo. from next question Baxter Stephen

focused you the MLR -- the from that in that appreciate expectations I all XXXX, on? commentary adjustments to same-store of if you on think your bridge time of about think could factors or core we've midpoint play the range. because us Medicaid some of work the out? and the will do the was the get your to Or seasonal business hoping curious some Medicaid been the I rate Medicaid think that there the in MLR other X/X kind for through take of kind help I'm the you your could year. year earlier around exiting the year

As a almost pressure rates in XXXX, We process, on began stay redetermination for in long-term which MLR put late up we with a general about same-store our the range framework the it. caught year-over-year, within fact, until equivalent. to basis, on how talk

about of prepared less blends commented other know revenue the our so we in XX% in for that. than half That about Mark on rate at XX% As his came XXXX. X%, to X.X%. forecasted at remarks, that We rates Medicaid increase

shift XXXX a trend was with our exactly state by commensurate influenced we even And we observed. have built that modest the our into trend, increase So as guidance. have rate acuity that customers X.X% and

So in be that with accommodated. acuity pretty for our to XX line was contemplated or impacted included, category states cost as rates much adjustments sound XX shift. completely business usual. medical It's an trend by by There's accounted acuity no influenced medical at and as needed cost our even of it of actuarially

to add? anything Mark,

exactly I No, right. think that's

and at rates being As much book roughly we trend look equal, flat. pretty the legacy the holds our

have ramps guidance. a a more in bunch know, pressure first you that in business at out which in of new us we bringing the that As the year, XX% little we're additional puts

The Rich question Nathan Goldman with next comes from Sachs.

to end I I driving membership points long-term talk year-over-year. wanted low moving the what's Is basis the that you on guess about about so Marketplace the just MCR, of saw? you that to of back XXX range, the up year-over-year? growth ask increase Can that a just function

for you guess, have to to that right use? the Is then the long-term XX% business? I XX% range target are And about thinking thought -- still maybe you how,

question then And Mark. for clarifying just one

back the I of said towards quarterly half the EPS think you weighted year. is

the I the year. about is total of half think back usually, XX%

to year that this mean comment over way you that does interpret the not that Or So be will the right is made? XX%?

the were middle really take question well the running I'll in We of first. XXXX. Nate, Marketplace

Our quite experience positive. was

So bid moderately to consciously business would. and modestly we consciously, the we we grow suggested as

the XXXX. the we observed observed observed but XX% hugely slightly the some in price earned business nearly trend the invest trend, that pretax so below excess And to below not trend, of somewhat essentially in below margin. We

So invested growth, in a in XX% growth. hence, of we growth the membership XX% revenue sense, excess margin and some the

on phasing? the Mark, -- the quarterly phasing

that the coming $X.X can bridge. revenue year, in bit particular. comes new first see in but got which into our Yes, absolutely. because the always in we on bit of little front little of just I'd revenue Nathan, a We're One, as new versus year. the business this the it different. in year, you this the right. almost the half normally around XX-XX you warmer on second billion first lot a dynamics in half year flip yes, put the are a quarter We got of company,

of new I'm kind to into grow and in get our MLRs as So momentum expecting we some there. footprint Medicaid Medicare on

the little that will So change a bit. dynamic

margins them some share up got in volume that convert, the we've Marketplace really they Marketplace. and Marketplace. The all prioritize very such often, our year. on and a fair year in Joe confidence members on is pick the year of I thing as to the as expecting on we'll that we the book bit redebt this, margin you during other attrition see given different. This in little off know, over think And touched is, growing that's With declines rolling marketplace marketplace a has throughout

trajectory those of more for little you're a back-end bit to X this So year. reasons, going EPS loaded see a

question. I your think that should address

comes James from Fitzgerald. Sarah The with next question Cantor

Can And trends seeing outpatient design is the some you didn't rest Medicare, you the contemplated you Bright? in flag into for you that guys or us you what XXXX clarify plan inpatient when also of were for mentioned and that guys the of group X on midnights seeing. VXX pressures your and for the

to this. if So I wanted clarify seeing you are

the our analysis it risk I'll Sarah, the kick what rules book. for changes -- Mark very of to and meant to in a we it had detailed adjustment

In answer to question. second your

reasons high-acuity configuration Medicare somewhat that book than income earlier, articulated different Advantage of the call the we what of business One our a I being is have of mainstream population. low I

highly on from done, population of Our pandemic. far its using based taking where demand to first day year. means of are In the the of our and the discretionary high-acuity of patients, it that's last to perhaps chronic, of place, members, members book the our mix than dynamic. comorbidities services notion a less year are a so day polychronic, less of might being are screenings business to procedures they chronic the be mainstream from utilization the orthopedic pent-up They're discretionary have

were articulated And drugs, the high-cost our book. X hours, GLP-Xs supplemental the so and the cost really benefits drivers in categories I previously, LTSS that

the Mark, do question? take adjustment to want risk you

we Sure. when as it's X And about I Medicare, mentioned, Joe in it's important, fact, think, things. talk Sarah,

the question it's is to which or less the most our Obviously, aimed probably Your of Medicare, at relevant high component DSNP is MMP. X/X of book. acuity

bit us lately, have for it's X a even and surprised the bit we're little quite little necessity. I've a there's X some things because folks is certainly you medical mentioned, seen always new factored rule, of that have of On and in a X And providers on not I the rule, midnight though what still time. midnight buzz this many prove remind to about

So there's for there window risk really big see adjustment trend a a not issues change change a in it. we as or can in

don't and in around interesting dynamic diabetes dynamics. for there On VXX VXX got each chronic actually book, that's there's polychronics, single situations. correlate out many interesting where there. kind in VXX, be fact, so of high-acuity is of It many certainly drag is adjustment see do folks, a actually some maybe the dynamic VXX when the but are, risk there's other. On same that acuity. use have quite reduction highly conditions but for helpful. there's or we But different that an on chronics, those those kind with of associated where of than high of in there's other different some some will folks example diabetes. the comorbidities that quite we our polychronics, And a other diabetes, are people places

I if helpful. That's clarification, And one more could.

is still I Just mature are favorable for guys as book? your earnings know but with on the in comments this really I new right, step-up lift this earnings other implied a second on of still year, you that guess, exchanges, there year you the book there in guiding your to X as new an below operations? into range, slightly members be year target words, is would moves and then MLR

at a for is are not means MCR essence question, margins, I'm quite which the the captured achieved certainly of the which target long-term not of your but we'll we XX% year, our the end range, sure XX% I've operating high forecasting XXXX. we be pretax in low single-digit

going more if you to members your look, be the the aggressively, But book. grow of book new more are to

want. have new so you grow member if If adjustment. and get about profitability in they're many they are you find SEP, in in, risk come And balance to during a better or chronic, comes -- need in adjustment term. the how quickly you risk members you to how view, to have Every won't that to going you fast they new strike find our to you near

what when risk between pool. the you I thinks the how the you how in achieve of balance fast get annual a grow important the and about much enrollment, membership do the very in stability maturity to mid-single-digit one and the there's what is book pretty SEP So membership duration of margins to of the up pick

factors. to those X You have balance

Deutsche with Hill Bank. George from comes question next The

the utilization which in I I for the to of low. about to sounds the and to can one is, more utilization book exchange, trends it I kind I'll growth bring Sarah XXXX, up talk growth on going Because of everything remain you you hit priced think continue and guys kind Nathan there. of underlying wanted try covered to topic, but cost trends but like is kind guess,

I of the Kind So be helpful. that any to and utilization parse the I'm trends expansion. color guess spread for price between on margin trying growth would

George, question on focused And is Marketplace? your

Marketplace. Yes,

very this we're keep believe business. is been this member do silver, has Joe both way the really margin is it have payer. and renewals. for we But space in to stable, clear, which prioritizing we we we which the best product keep the the good we in as Look, Yes. And that -- over volume it means continue

look range at we make market target to were bit we we a our our here. below putting price bit that well is we in and pricing printed XX% of into just Remember, the of to target something here, because margin concede our can little for XXXX, 'XX. XX% south range. our little margins defend in As We sure objectives pricing reasonable a we're that did

reason can some our So volume the that if on of bit price margin volume I hope table leave we and back, little drive targets. hit to no still a put helps. there's

follow-up. changes of quick And disruption maybe I tiny it's talk of a 'XX the the could if in does. you expected in It piece in business. PDP the given about sneak from But just I can a know kind IRA?

of I'm question, had last sorry. the part we -- didn't George. We hearing PDP? trouble your

like said, you to if be of the tiny or helpful. expecting part what XXXX a on commentary it's business, the book, in but guys a changes. saying IRA kind would I But disrupted it's of part because PDP any I you're know of Yes. pretty I tiny of but we're be know have disruptive the

Yes.

IRA Act that's out. pointing you're that price our So Inflation on business, the PDP, know, headwind as in or the we that Reduction too certainly for PDP a but you not It's don't to sector, George. product relevant the

question Stephens. last Scott with from today come Fidel will The

that walk interested down the on the your MA between projecting advance and through book? to analysis parse impact the was whether Bright you And impact then just XXXX you're able the us can on preliminary be I notice? what if preliminary you're will legacy business

for balance, our compensate the the I view is all notice that not does to to Scott. on Sure, from that were view advance trends heard you've that adequate is reserving. others same be mean, appear

out, X.X I think rate is, XX along if notice with our we to in increase, as different our point a projected the and from of anybody take notice you view CMS our final think basis which not advance you book, others, is comes that. comes out. see any we'll insufficient, point, better and else's. It book, I usually where know, we're the But is projecting about than believe

Yes.

domain Just to this data lot that, the build at on is and a of this public in point.

On seeing X, mentioned, a benchmark at As the those see we the across the market, of advance of effective normalization, are entire net folks Joe bps. rates score most net in about right? the positive risk XX about and then a notice

little a normalization earlier. reasons a So for little bit so I and or alluded not bit risk rate, the bad some on benchmark we're better to on the we're

has risk bp scores our point And yet on the ultimately and STAR's benefit a But about So legacy we're play impact out. with seeing there. of XX to initial the what rest everyone does obviously, book. that's

little Bright the than that then And And clarify, fair in book, book, that to I the Is overall that's then bps, probably XX book would for right? assumption? in just worse legacy legacy so assume the a that. the directionally the a better

through that. We're there. will couple way There be a still things going of our on working

all We're is I entities of with balance the there. one between also and happen the year. plan earlier, health those that this entities. owning day. weeks be exactly issues we're some One it. bunch a of team issues community how X working will those through dynamics There There will into mentioned on the this brand-new we be other X As There them are actually there. effects between X

on that little bit not to of there and So comment a ready one. work

that on anticipating would not full when $X any the But I of off that in We're pretty achieving year the trajectory. we're analysis that ownership. move say confident in us would third rates completed of accretion in

you This also conference the concludes for the today's attending concludes Thank call. question-and-answer session presentation. and

disconnect. now may You