On the individual side, I think it’s important to mention what Tom did, which is to say, we did get more members in the SEP period than we anticipated, which actually, I think, is a good thing for 2024. And so, while it’s creating some pressure in 2023 because they come in late in the year and you don’t have the opportunity to document their conditions, between the pricing increases that we put through, as well as our risk adjustment processes that will really ramp up for 2024, it’s actually a nice tailwind for 2024. Our commercial business also is doing well, our Group Commercial business and our Medicaid business. So, there’s no other pressures there. This is really a Medicare story. And as I said, I think we’re fully covered with our 2024 guide.
Justin, with respect to your benefits question, it was important for us coming into 2024 to maintain benefits stability for our members in light of, obviously, the stars pressure that we faced. This is an important strategic priority for Medicare. It not only impacts our business on the Aetna side, but also has wide-ranging impacts across the enterprise. And so, this was a business that we are committed to, maintaining benefits stability and being thoughtful in some of the investments that we made. So, for example, on the D-SNP side, that’s clearly an area where we leaned in. Our focus was on the flex cards. And as Tom said, these are cards that our members can use for food, OTC, utilities, etc. We believe this is an attractive benefit. But importantly, the assumptions we used for 2024 effectively assume full utilization.
And so, there’s just not a lot of incremental breakage that can occur in 2024 relative to the D-SNP population. I’d also remind you that our D-SNP population is largely HMO, and so they weren’t impacted by the stars challenges that we’ve had for 2024. So, as you think about marginal contribution and where our benefit design is and our anticipation to grow that book, actually, we expect marginal profit contribution on new members for D-SNP, and so, actually view that as a positive. And on the general enrollment side, we’re very targeted in our investments, and the investments we made tended to be in new plans as opposed to existing plans, which actually was a thoughtful way of really driving opportunities for growth without earning the entire book with incremental costs.
So, again, I feel good about 2024 where we’re positioned. And I would say, as Karen said in our opening remarks, feel very good about our ability to achieve at or above-market growth on the Medicare side. And then finally, on your margin question, I’m clearly we’re way below where we need to be on 2024 margins, we understand that. Our expectation for 2025 is that we’ll take significant ground against our margin targets. Obviously, we need to see where the rate notice comes out, what the competitive dynamic is. But you should expect 2025 for us to see incremental margin improvement, and hopefully, material improvement in that regard.
Operator: The next question comes from Lisa Gill from J.P. Morgan. Lisa, please, go ahead. Your line is open.
Lisa Gill: Great. Thanks very much, and good morning. I want to focus on the healthcare services side of the business, and I really had a few questions here. One, when I think about Cordavis and I think about the opportunity around biosimilars, is there a way for you to maybe frame how big that opportunity is? Secondly, when we think about things like GLP-1, I would think that as being a positive for this business. Can you help us understand that? And then thirdly, there is expectation that there’ll be some level of PBM, maybe a bill this year when we think about the reconciliation. Can you talk about what you’re seeing right now and is that built into your expectations around your business for 2024?
Karen Lynch: Hi, Lisa. Let me take a couple and then I’m going to ask Prem to talk about Cordavis and I’ll ask the team to talk about GLP-1s. But just generally on the PBM bill, obviously, there’s a lot of unrest going on in the legislative body of the U.S. We don’t — we may see something at the end of the year and the end of the — in that reconciliation bill. Our best thinking now is that is transparency which we are fully aware of and have contemplated in, in our business. So — but it remains to be seen what really will happen in that year-end reconciliation package. I think, there’s a lot going on in Washington. So, it’s unclear what will happen. Relative to Cordavis, we view that as a significant opportunity, as I mentioned in my prepared remarks.
This is an opportunity for us to bring a healthy biosimilar market to the U.S. so that we can really bring lower drug costs to our customers. Prem has been doing a lot on this opportunity, and I’ll ask him to talk about kind of the magnitude of it. But we are excited and we are in a position to really have an impact. It is a $100 billion opportunity by 2029. So, we have the opportunity over the next few years to really make significant improvement in lowering drug costs, and obviously, in the performance of our company. And then relative to the GLP-1s, what I would say is that this is an area that has demonstrated and proven that we can see significant weight loss and improvement in health, but it comes at a very hefty price tag. And it is the reason why PBM exists, to really have the opportunity to reduce overall costs for GLP-1s.
