Operator: Thank you. And our next question today comes from Nathan Rich at Goldman Sachs. Please go ahead.
Nathan Rich: Great, thanks for the questions. I wanted to ask on the Medicare business. I guess — is there any change to how you’re thinking about MA enrollment and revenue kind of relative to the initial expectations now that you have a fuller view of the competitive environment? And just for clarification, are you still planning the $200 million PDR in 4Q? And then kind of bigger picture, could you talk about the path to getting the 85% of members into 3.5 star plans by October of 2025 and the areas that you’re investing in and kind of any incremental investments that you’re maybe planning for 2024 in that respect? Thank you.
Sarah M. London: Yes. Thanks, Nathan. So with the competitive landscape and additional information we have not changed our view that we would be down $4 billion in 2024 in the Medicare business. Again, our focus is really on narrowing to that lower income complex population that was part of how we constructed the bids and certainly how we crafted our strategy going into AEP. And then relative to Stars, we’re obviously pleased to have delivered results in line with our expectations beginning in Q2, but there’s obviously still work to do. And so this next cycle will be an important additional step to that ultimate goal of 85% of members in 3.5 Stars. And our focus really continues to be on rebuilding the operational capacity and the infrastructure to support sustainable programmatic improvement, and that was really demonstrated by moving again 53% of our membership from sub 3 to 87% of our membership at or above 3 in this first step.
So we’ll need to continue to pull up underperforming contracts. We’ll need to move contracts and members from the 3 across that 3.5 star threshold. And a lot of that is again, why we’ve tried to create visibility into some of the underlying operational metrics that we’re tracking internally around our overall CTMs and around call center metrics and our ability to answer questions for members and provide them a good member experience, getting them connected to physicians, getting them aligned to value-based providers so that those incentives are aligned to close gaps in care, which ultimately accrues not just to HEDIS but to cap. So those are all the things that we’re really focused on. We’ve got a very robust governance structure in place. As we’ve said before, we’ve got incentives aligned top to bottom in the organization.
There is no confusion that this is a priority, and we continue to be focused on making incremental improvements and holding steady on those improvements that we’ve made to date.
Drew Asher: And you asked about the — our view on the PDR has that changed? Our current guidance gives us capacity for PDR in the mid-200s. But the accounting calculations in December will dictate that precise number.
Operator: Thank you. And our next question today comes from Lance Wilkes with Bernstein. Please go ahead.
Lance Wilkes: Thanks. Just wanted to do a quick deeper dive on a couple of the items that you’ve talked to. One would be on Medicaid redetermination. If you can just talk a little bit about for levers, any sort of double coverage analysis you’ve done to see like what percentage of those were maybe 0% MLR? And then for this more complex population focus and MA going forward, do you know what the kind of percentage target margin would be for that as you think about that as a sustainable business going forward? And if you wanted to give any update on your PBM cost save, obviously, $500 million, I think, was the category cost, say, for gross margin improvements. It seems like you may have upside to that, so I would love to hear any further color? Thanks.
Drew Asher: Yes, back at — I think in the January conference we outlined, as we talked about a number of the factors before we had any real data on redeterminations and now we’ve actually got real data, which sort of trumps all the hypotheses that we were going through leading up to April of 2023. We had indicated that as we look through our data, we could see through COB claims, the other insurance coverage where members that had duplicative coverage had gone from 2.7% of the Medicaid population in 2019 to 3.4%. So made sense at the time, we sort of triangulated that with a bunch of other things to come up with our forecast that we outlined on the Q1 call. And the good news is we’re right on track with those forecasts now that we’ve got — we’re well into redeterminations and over 40% according to our estimates through redeterminations.
On the PBM that’s right on track, as Sarah mentioned, and the economics as well that we’re expecting. And as you would expect from us, many of those are in the form of guarantees that our PBM underwrote. So we’re on track for the contribution to the greater than 660 from the PBM economics.
Sarah M. London: And then just relative Lance to your question on the complex populations. Obviously, the reimbursement for those populations can be higher, but you’re dealing with a higher acuity and more complex care within that cohort. And so our view is that because that aligns with our expertise in managing Medicaid members that we have the opportunity through value-based arrangements for that to be a profitable cohort but also to drive differential outcomes for that population. And if you take a step back and look at segments of the Medicare population, the lower income complex members are the fastest-growing segment. And that is part of why we have focused on that membership not just for this cycle, but as part of our long-term fundamental strategy.
Operator: Thank you. And our next question today comes from Gary Taylor with Cowen. Please go ahead.
Gary Taylor: Hi, good morning. Two quick ones on Medicare. The first is, as we’re thinking about Medicare enrollment in 2024 and looking at some of the reductions across OTC and Flex Benefits and SSBCI, it looks like those hit pretty evenly across both individual MA and D-SNP. And I know you’re talking about focusing on more complex care next year, and I think D-SNP’s actually been growing this year. So just wondering how we should think about individual retail MA versus D-SNP if we should see similar trends? And then just my second question on MA is I still get a lot of questions from folks trying to do the EPS bridge. I know you said $0.80 loss from Medicare next year. I’m just wondering if you could give us just an updated figure for Medicare this year, including the PDR?
