Joshua Raskin : Just looking at 2024 and adjusting for the PDR, EPS next year would be — if you sort of moved it from this year to next year, EPS would be down, call it, mid-single digits. Can you just help us bucket broad strokes? How much is Medicaid headwind from redeterminations? How much is MA? I think you sized the loss there. How much is earnings from exchanges? Is that going to rise? I’m sure there’s a benefit from lower G&A dollars. There’s a share buyback. Just any directional commentary to help us understand sort of the puts and takes? And then, just lastly, help us understand the PDR and why that doesn’t cover the entirety of the loss for Medicare Advantage next year?
Drew Asher: Yes, let me start. Thanks, Josh. Let me start with your last question. Yes, it’s the accounting rules around PDRs. You really only pick up — think of it as like the marginal loss and direct cost necessary to administer the contract, including distribution costs, but there’s a lot you can’t pull into a PDR in that SG&A. So that’s why we still have an $0.80 loss — the ballpark of $0.80 loss embedded in that $6.60 in 2024, despite the fact we’re rolling a projected $200 million or, call it, $0.27 or so PDR into ’24. If you step back and think about — and we’ve given a number of these elements of ’24, even though, typically, we give ’24 guidance at Investor Day in December of ’23. But we’ve given a lot of information, so let me try to summarize some of that.
Medicaid, about a $7 billion incremental revenue headwind. We’ve all known that for a while, and that’s built into the figures we gave out in Q1. About a $77 billion Medicare revenue premium stream in 2024. So a little bit of a headwind there in terms of volume. And then if you’ll recall the bridge that we walked through in Q1 of HBR, going from a projected 89.8 in ’23 to 90.1, inclusive of an allowance for some potential pressure and a mismatch between acuity and rates as well as some benefit from our PBM arrangement. So there’s a couple of headwinds in Medicaid. Obviously, we talked about the $0.80 headwind, which is not just the $0.80, but it’s — we’re making a little bit Medicare this year, we expect to. So it’s that swing. Marketplace, you’re absolutely right.
Not just the continued push on margin in Marketplace, but the growth this year and how that matures into next year, the sophomore year of special enrollment period members is attractive, as I mentioned in the script. And then you’re right, we’ve got other elements like the annualization of this year’s share buybacks. So those are the pieces that get you to the $6.60, inclusive of the $0.80 headwind that’s embedded in that, which we expect to recover over the next couple few years.
Operator: And our next question today comes from Justin Lake at Wolfe Research.
Justin Lake : I’ve got a few, hopefully, simple number of questions, I’ll rattle off to you here and we’ll see what you can answer. The first one is, I’ve got you at about 3 — or I should say, 20% of your Medicare Advantage members right now in 3.5 star plans. So I appreciate you’ve given the 85% for ’26. I was hoping you might be able to give us a ’25 ballpark there where you expect to be in October for 3.5 star plans? Then Drew, you said 14% of Medicare revenue — 14% of revenue in Medicare. What does that imply for MA membership next year? And then just lastly, on the rate increases you’re getting in the third quarter, how are the overall rates coming in versus typical 1% to 2% that I think you guys talked about?
