Scott Blackley: Sure. We will try to make sure I hit most of those a couple of big topics there. So starting with 2023 improvement, I would expect to see significant improvements in both MLR and on admin. On the MLR side, I would point to pricing that we put into the market for next year, which was designed to cover trends, was designed to cover redetermination as well as create margin expansion. And then as I mentioned in my talking points, we do have a number of total cost of care initiatives that we are executing right now. On the admin side, we are expecting significant improvements in admin and would expect to see that both in the insurance company as well as our total company adjusted administrative expense ratio. The $120 million that I spoke to is total spend for the company.
And I would just point to a few things that will drive the admin. The first is distribution, which will be a significant driver of the improvement in the insurance company. The second is vendor. We do use a number of vendors as part of our business, and we have already negotiated many of those arrangements based on our larger scale. We expect that we will be able to continue to do that. And then third, we anticipate additional fixed cost leverage as we move into 2023. To go to your question on adjusted EBITDA in terms of where we are coming in at above the high end of our range, and we expect it to be modestly over the $480 million top end of the range that we previously disclosed. So, I would point to a few things. The first is that the higher than expected distribution cost that we saw was really associated with additional new members.
And we had eliminated broker commissions as of the beginning of the second quarter. But towards the tail end of the second quarter, CMS provided updated guidance to the industry that prohibited differentiating your broker compensation for the same effectuation year. So, we have restated that. Obviously, that wasn’t implicit in our original guidance. And that was €“ that has created a headwind to our administrative expense ratio as well as driving up the adjusted EBITDA loss. Obviously, we have already put distribution pricing into the market for next year. And so we have got a good line of sight to the improvements that we are expecting there. And then the second thing I would just say is that we had hoped that we would be at the bottom end of our MLR range.
But with that new membership, that also comes with some MLR pressure, much less than what we experienced last year. So, it’s really not a big year €“ a big impact to our current quarter results, but it did take up some of the cushion we had in our MLR guidance and pushed this up into the top end of the range. So, obviously, these effects didn’t all happen in this quarter, but we did see some worsening last quarter, and we had hoped to claw back some of that, but the distribution expense in the third quarter came in really strong and pushed us over the top end of the range €“ excuse me, I said that the MLR was going to be at the top end of the range. We are going to be in the middle end of the range, but we would expect it to be at the bottom of the range, just to be really clear about that.
And some of that MLR pressure that came with SCP is pushing us, took up a little bit of the guidance and moved us from the bottom to the middle end of the range. So, those are the drivers. Hopefully, I got all your questions.
Stephen Baxter: Thank you very much.
Operator: Your next question comes from the line of Nathan Rich with Goldman Sachs. Your line is open.
