There are some members, the other 15% of what we’re seeing are being reinstated back to maybe a month or two after they lost eligibility. But it’s very early. There’s not a lot of redetermination activity in April. So it will be interesting over the next few months to see that dynamic of members getting reinstated.
Operator: And our next question today comes from Gary Taylor with Cowen.
Gary Taylor : I have two questions for you. One, a couple of your competitors mentioned that the second quarter results bore — for not immaterial MLR headwind from the California court settlement related to COVID costs out of period. So just wondering if your quarter did — this quarter did reflect that or if you had already booked that? And then secondly, just sort of coming back to Scott’s question, I just want to ask about commercial MLR again. And looking at this year-over-year, just to exclude sort of the deductibility seasonality. But in the first quarter, your commercial MLR was down 290. This quarter, it’s up 350. A small portion of that is SEP. A small portion of that, I think, is the smaller year-to-year RAF accrual true-up.
So it really did seem to deteriorate, but I know you’re saying, I think you felt it was in line, and you think the year is still going to come where you expect to land on commercial MLR. So I just wanted to understand that movement between 1Q and 2Q a little better from your view?
Drew Asher: Yes, on SB 510 in California, we booked that in Q1 when we got that information, which is — I think we explained this on the Q1 call also is why we were a little bit high at 90.0, and then we had a really good quarter in Q2. So year-to-date, we’re looking good in Medicaid. And then you’re right on commercial. You’ve got the dynamic of Q2 ’22, having a really sort of a good guy. We didn’t have any insolvency issues from the ’21 calendar year. And so that wasn’t chipping away at the final settlement from CMS like it is over the last five quarters, including this quarter as well. So that’s sort of the swing item. And our growth was excellent last year, it is tremendous this year. And while that puts a little bit of pressure on the near term, we’re thrilled that with our #1 market position, leveraging the Ambetter brand.
We’re able to grow a lot this year, which will give us earnings power for 2024 and beyond. But that does show up in the current period, HBR a little bit.
Operator: And our next question today comes from Calvin Sternick with JPMorgan.
Calvin Sternick : Just a clarification. In terms of the Medicaid retention rate, I know about 1/3 you expect to end up with. But in terms of timing, just given that we have these 90, 120-day sort of reenrollment windows, do you expect to land at that 1/3 number, I guess, second quarter of ’24? Or is there going to be sort of a couple of month lag where maybe it will take another quarter before you end up planning that 1/3?
Drew Asher: Well, part of that depends on whether or not people finish in that 14-month time period. And who knows what might be going on by the time we get to Q1 or Q2 of 2024. So tough to predict exactly when each state will end. But we think that’s — the numbers we gave, without trying to predict exactly the month we hit that, we think that’s the ultimate outcome, and that hasn’t changed.
Sarah London : And again, all those outreach efforts that I mentioned are designed to try to minimize the span between someone who’s dropped eligibility, but is still eligible in the recapture. And that includes, obviously, the direct outreach, but also relying on primary care physicians and providers in general, so that we’re not recapturing folks when they’re showing up at an emergency department. And so I think that outreach has also proven to be successful, at least in these early months.
