Scott Blackley: Yeah. Well, why don’t I start and then, Mark, maybe talk about some of the membership growth, but overall, when we look at the demographics and kind of the morbidity of the group that we’re seeing, I would characterize it as, number one, it’s younger and so, we certainly with this growth have seen, younger members coming in more than a little more than a year younger in terms of the total population. Number two, I would characterize it as we’ve seen a shift of more of our membership in 2024 towards bronze or excuse me, from bronze to silver and so that is another dynamic that we’ve seen. Overall, I would say that our membership being healthier is representative of the fact that we think we’re going to have a higher risk transfer this year. So, the dynamics of that membership, younger, healthier and in silver plans are probably the things I would kind of point out. Mark, do you want to cover the state by state?
Mark Bertolini: Sure. Strong retention was the biggest part of our growth, I would say that and also provide stabilization and risk adjustment as we go forward into this year. It was obviously helpful for us last year. We did grow new members in existing markets, Georgia, Florida, Ohio, Tennessee, Iowa and Missouri, but we also outperformed expectations in new markets where we did some service area expansion, Cincinnati, Tennessee and some of the rural markets in Iowa and Georgia.
Nathan Rich: Great. And maybe just a quick follow up. I think in the past, the company has talked about a target MLR in the low 80% range. You pretty much got into that level for 2024. So I guess, as we think beyond this year, do you think there’s still kind of improvement in the MLR that can be had or will more of the margin expansion, I guess, come from leveraging growth that you might see?
Mark Bertolini: We definitely have room in the MLR.
Scott Blackley: Just to even put a fine line on that. Remember, our PBM contract has year-over-year step improvements that are built into that contract. So without doing anything, our pharmacy costs would be lower in 2025. So a lot of the things that you’re seeing in the run rate that’s benefiting ’24, we would anticipate have incremental improvements in the ’25 and, we would expect to continue to drive down the costs of healthcare.
Operator: [Operator instructions] Our next question comes from the line of Stephen Baxter from Wells Fargo. Please go ahead.
Stephen Baxter: Hi, thanks. I’m just wanted to follow up on, the PBM discussion. I know in the past you talked about the savings being spread out over 2024 and 2025. So good to hear some of that still in front of you. Can you give us a sense of maybe what you mean we’re in the PBM savings exit in 2024? And then just a second on, kind of the profile of membership you’re looking for in 2024. Just wondering, it sounds like now that you’ve gotten to insurance company profitability, I would think that growth that you’re seeing from inside the open enrolment period, would seemingly come on at incremental profitable margins, but perhaps you’re taking a more conservative stance to start out. So we’d love some insight into how you’re thinking about the profitability of the growth and then just last one, exiting this year, where do you think you’ll be on some of the payment integrity efforts that you’ve talked about in the past? Thanks.
Mark Bertolini: I’m going to try to remember all those. So if we miss one and I’m not being, please, please come back. So, when I think about where we might be going from a overall, starting with kind of the MLR, I think there’s opportunities there around the PBM, where the PBM actually goes out till 2026 and so we have, a contract where each year we will see benefits and this was the — first year was the largest step change, but there’s continue to be meaningful improvements in that contract over the remaining term. So that is — that’s something that, we can put in the bank and we’re pleased with our partnership there with our provider.
Scott Blackley: And I would add that we also have the opportunity for volume — more volume, that’s just more discounts than we initially anticipated and then thirdly, there’s an opportunity to work on the MAC list quarter after quarter. On the payment integrity issues, we’ll see full year effect on what we’ve done for last year, this year, but we have more to go this year. So we’ll continue to improve upon those, particularly as we apply AI models to the back of the business and go after things that we now pay vendors for. And then I think, last but not least, we still have a lot of provider relationships that we can affect in markets that were vintage markets where the company started, had no volume and was able to move on those medical costs. So we have room on medical costs across the board.
Mark Bertolini: And then Steve, probably the last piece on your question on member economics, I would say that we would anticipate that, you know, all of the growth that we’re seeing in open enrolment is contribution margin positive. So at this point, growth is great for the bottom line. We also expect to see continued enrolment through the special enrolment period and while those members come at — we talked about this in the past, with about a 10% higher MLR and there are the durational impacts that we talked about, that’s in the first year and then they, look exactly like the rest of OE if we can retain those people. So, it is certainly the case that depending on when you get those members in the year, the economics can be challenging in the first year, but we built that into the plan.
So those are already built into our guidance and we are excited to have the opportunity to add more members through special enrolment period in addition to the success that we’ve already had in open enrolment.
Stephen Baxter: Okay. Thanks for the color.
Operator: Thank you. Our next question comes from the line of Adam Ron of Bank of America. Please go ahead.
Adam Ron: Hey, thanks for squeezing me back in. I just have one more question. I get a lot of questions on the Affordable Care Act subsidies, and there are some government estimates out there of, if the subsidies were to go away, what would happen to the market size and so just wondering, one, if you have any comments on what you’d expect it to do to the market, maybe relative to like what your mix of members look like relative to who is using the APTCs. So first on that, and second, you mentioned before you look at G&A as fixed variable, like maybe this would be a helpful framework for us of, if we’re able to think about how much of the G&A is fixed variable, how that would flow into earnings. And then finally, if there, if the subsidies were to go away, which obviously nobody can predict, is it fair to say that margin would degrade, or is there a reason to believe, there’s some levers you could pull to kind of offset that? Thanks.
Mark Bertolini: Well, the last part of your question, Adam, we believe that we have an opportunity to provide services at a different price point that could help folks when and if the enhanced subsidies go away. But going up to the more general level, will they, we had some interesting looks at our data this open enrolment, and in this open enrolment, 63% of new ACA consumers are from red states and 76% during the open enrolment and year-over-year in the ACA, our market growth is in red states. So I kind of find it hard that the political dynamic that was going on six, eight years ago is going to be the same relative to the Republican Party, going after a group of people that largely are going to be their own constituents. We’ll see.
We have a planning version on our strategic plan of having it go away and all the things that we would need to do with product in order to make things affordable. Folks in the group we worry about most are the people in the 100% to 200% federal poverty level that have zero premium plans, and would potentially be paying somewhere around $60 or $70 a month. That’s the place where we think the impact is, and we’re planning against that to find solutions for it. Relative to fixed versus variable, Scott, I’ll let you decide.
Scott Blackley: Yeah, look, on fixed versus variable, I think that’s information that we will look forward to sharing more about with you when we have our Investor Day in June.
Adam Ron: Awesome. Thanks again.
Operator: Thank you, ladies and gentlemen. As we have no further questions at this time, we will conclude today’s conference call. We thank you for participating, and you may now disconnect.
