Oscar Health, Inc. (NYSE:OSCR) Q4 2022 Earnings Call Transcript

Stephen Baxter: Thanks. I think could you just touch on maybe how you guys are thinking about the risk pool dynamics as the market continues to grow in 2023 kind of put in the redetermination piece aside.

Mario Schlosser: Yes, sorry, I forgot about that one. So generally what you see in the ACA is that if you’ve had more growth, it tended to bring down the average risk score. Now there is clearly risk score trends in the market, meaning every year all insurance companies tend to get better at collecting risk scores and recapture rates and things like that, right? So you sort of always have written that in that race of making sure you don’t fall behind the year. And we’re very aware of that. But generally, the risk pool has comes down if €“ when the pool expands. And I would think that that’s would again, have happened coming into this year. We did not make big assumptions around this. And so partly because we didn’t want to be too, again, exposed in terms of whatever happens in SEP.

And I could see a situation where SEP members coming in drive the pool up, but then the more recent growth has driven it down. So that’s kind of our overall about the same. But as I mentioned before, and I’ll just briefly say it again, from a metal mix perspective and also from an average age perspective actually, we have about the same population as before. And so to us that generally means there isn’t anything there that we will be somehow too concerned with getting the risk pool will run us versus the overall markets. But obviously these are all the things we’re watching and there’s the same weekly report coming out. We’re always sitting there and cheering when it comes in the way we expect. And I’m looking forward to the next time that will happen.

Stephen Baxter: Okay, thanks. And then just one super quick follow-up, hopefully. Just on the PBM contract, like, it sounded like you are renegotiating or it already has been done, I just am trying to clarify whether we should think about there’s an impact beyond 2023 that we should be considering or is the impact fully captured in the 2023 guide that you provided? Thanks.

Sid Sankaran: Yes, thank you, Steve, it’s great question. And it’s €“ I think we’ve always talked about this about the benefits of the increased scale. And so, yes, we are in the final, final steps of renegotiating that PBM contract and it’s structured in a fashion that will provide us benefits in 2023 and beyond. So think of it as multiyear.

Mario Schlosser: Yes. I think for us this was a good example of €“ we’ve reached a certain level of scale now that enables us to take these kind of steps that maybe at lower scale wouldn’t have been the case. And that’s something we intend to also press on going forward.

Operator: We have no further questions at this time. Ladies and gentlemen, that will conclude today’s meeting. Thank you all for joining. You may now disconnect.