Q3 2023 eHealth Inc Earnings Call

Good afternoon, everyone and welcome to <unk>, Inc Conference call to discuss the company's third quarter drank during suite financial results. At this time, all participants have been placed in listen only mode. The floor will open for questions. Following the prepared remarks, I will now turn the floor over to Eli.

Good afternoon everyone and welcome to e-held Inc's conference call to discuss the company's third quarter 2023 financial

At this time, all participants have been placed in listen-only mode. The floor will open for questions following the prepared remarks.

I will now turn the floor over to Eli Newbrand Mintz, Senior Investor Relations Manager. Please go ahead and...

<unk> Senior Investor Relations manager. Please go ahead.

Good afternoon and thank you all for joining us today. On the call today, Fran Seussman, the health chief executive officer, and John Stelbin, chief financial officer, will discuss our third quarter 2023 financial results.

Good afternoon, and thank you all for joining us today on.

On the call today brand site, Ehealth, Chief Executive Officer, and John <unk>, Chief Financial Officer will discuss our third quarter 2023 and financial results.

Following these prepared remarks, we will open up the line for a Q&A session with industry analysts.

Following these prepared remarks, we will open up the line for a Q&A session with industry analysts.

As a reminder, this call is being recorded and webcast from the Investor Relations section of our website.

As a reminder, this call is being recorded and webcast from the investor relations section of our website. A replay of the call will be available on our website later today. Today's press release, our historical financial news releases, and our filings with the SEC are also available on our investor relations site.

A replay of the call will be available on our website later today.

Today's press release, our historical financial news releases and our filings with the SEC are also available on our Investor Relations site.

We will be making forward-looking statements on this call about certain matters that are based upon management's current beliefs and expectations relating to future events impacting the company and our future financial or operating conditions.

We will be making forward looking statements on this call about certain matters that are based upon management's current beliefs and expectations relating to future events impacting the company and our future financial or operating performance.

Forward-looking statements on this call represent the health views as of today, and actual results could differ materially. We undertake no obligation to publicly address or update any forward-looking statements and future filings or communications regarding our business or results.

Forward looking statements on this call represent <unk> helps views as of today and actual results could differ materially.

We undertake no obligation to publicly address or update any forward looking statements and future filings or communications regarding our business or results.

The forward-looking statements we will be making during this call are subject to a number of uncertainties and risks, including but not limited to those described in today's press release and in our most recent annual report on Form 10-K and our subsequent filings with ETS.

The forward looking statements, we will be making during this call are subject to a number of uncertainties and risks, including but not limited to those described in today's press release and in our most recent annual report on Form 10-K, and our subsequent filings with the SEC.

We will also be discussing certain non-GAAP financial measures on this call. Management definitions of these non-GAAP measures and reconciliation to the most directly comparable GAAP financial measures are included in today's press release. With that, I'll turn the call to the next speaker.

We will also be discussing certain non-GAAP financial measures on this call managements definition of these non-GAAP measures and reconciliation to the most directly comparable GAAP financial measures are included in today's press release.

With that I'll turn the call over to franchise.

Thank you Eli and thank you everyone for joining us today for Ehealth third quarter 2023 earnings call.

Thank you, Eli, and thank you everyone for joining us today for eHealth Third Quarter 2023, your earnings call.

He helped deliver solid Q3 results, reflecting favorable member retention trends and increase in Medicare advantage lifetime value and <unk>.

eHealth delivered solid Q3 results reflecting favorable member retention trends, an increase in Medicare Advantage lifetime value, and better than expected cash collections on our existing book of business.

Other than expected cash collections on our existing book of business.

Third quarter Medicare enrollments came in slightly below expectations as we focused on AEP preparedness and reserved our marketing budget for the fourth quarter.

Third quarter Medicare enrollments came in slightly below expectations as we focused on AEP preparedness.

And reserved our marketing budget for the fourth quarter.

Our Q3 results also reflects important investments in support of our Medicare annual enrollment period objectives.

RQ-3 results also reflect important investments in support of our Medicare, annual enrollment-curied objectives, including the successful scaling of our tele-stales organization.

Including the successful scaling of our telesales organization.

This included the expansion of our national and local market teams of license agents or benefit advisors, as well as the addition of customer care specialists as part of our ongoing commitment to enrollment quality and superior member experience that leads to improve customer persistence.

This included the expansion of our national and local market teams have licensed agents for benefit advisors as well as the addition of customer care specialists as part of our ongoing commitment to enrollment quality and superior member experience that leads to improve customer persistency.

We also ramped our advisor force supporting our dedicated carrier arrangements.

We also ramped our advisor force supporting our dedicated carrier arrangements.

During the quarter, we finalized our preparations for the AEP across all key areas of our organization entering Q4 in a strong position to deliver on our financial and operational goals.

During the quarter, we finalized our preparations for the AEP across all key areas of our organization, entering Q4 in a strong position to deliver on our financial and operational goals.

Importantly, the organization is now significantly more agile than we have been in prior enrollment season.

Importantly, the organization is now significantly more agile and we have been in prior enrollment seasons.

Allowing us to course correct as we go, leaning into channels and markets that are outperforming expectations while shifting spend out of under...

Allowing us to course, correct as we go leaning into channels and markets that are outperforming expectations.

Shifting spend out of underperforming areas.

Agility is a critical factor for a successful AAP, as this concentrated stretch is both intense and fluid.

Agility is a critical factor for its successful AEP as.

Is this concentrated stretches both intense and fluid.

Before discussing operational developments during the third quarter I'll first offer some comments on dynamics, we are observing within the Medicare market.

Before discussing operational developments during the third quarter, I'll first offer some comments on dynamics we are observing within the Medicare Mark.

First and foremost the Medicare advantage market remains as attractive as ever aided by demographic trends.

First and foremost, the Medicare Advantage market remains as attractive as ever aided by demographic trends, bipartisan support for the program.

Partisan support for the program.

significant value proposition relative to traditional Medicare and robust plans collection

<unk> value proposition relative to traditional Medicare.

And robust plan selection offered by carriers.

The Congressional Budget Office, the CBO, projects that the share of all Medicare beneficiaries enrolled in Medicare Advantage plans will rise from the current levels of 51% to 62% by 2033.

The congressional budget office CBL projects that the share of all Medicare beneficiaries enrolled in Medicare advantage plans.

From the current levels of 51% to 62% by 2033.

Looking ahead to 2024 health plans continue to feature core and supplemental benefits that senior signed attractive, including $0 premium and added value services.

Looking ahead to 2024, health plans continue to feature core and supplemental benefits that seniors find attractive, including zero dollar premiums and added value services.

I would also like to briefly address the 2025 technical notice published earlier this week by CMS.

I would also like to briefly address the 2025 technical notice published earlier this week by CMS.

We are in the early stages of reviewing the proposed rules. But the spirit of promoting competition and delivering transparency is in line with our carrier agnostic choice business model.

We are in the early stages of reviewing the proposed rules but.

The spirit of promoting competition and delivering transparency is in line with our carrier agnostic choice business model.

Regardless of the ultimate outcome of the proposal it will have no impact on our operations during the current AEP.

Regardless of the ultimate outcome of the proposal, it will have no impact when our operations are in the current AEP.

We are confident in our ability to navigate potential future impacts of the proposed rule down the road, as we are accustomed to adjusting for regulatory changes in this sector.

We are confident in our ability to navigate potential future impacts of the proposed rule down the road as.

As we are accustomed to adjusting for regulatory changes in this sector.

This enrollment cycle, we are observing additional trends that are shaping the Medicare market.

This enrollment cycle, we are observing additional trends that are shaping the Medicare market.

First, while carriers have made some changes to their 2024 MA plan offerings, overall, we are seeing a greater stability of benefits and premiums than initially expected.

First while carriers had made some changes to their 2024 and MA plan offerings. Overall, we are seeing a greater stability of benefits and premiums than initially expected.

Second <unk>.

Second, dual special need plans known as these

Dual special needs plans known as D snips and chronic special needs plans known as C. Snips are becoming increasingly important contributors to overall MA growth and a key part of AEP strategy for many carriers.

And chronic special needs plans known as facetips are becoming increasingly important contributors to overall MA growth in a key part of AEP strategy for many carriers.

Third carriers are driving increased local market focus and to their product design and marketing efforts.

Third, carriers are driving increased local market focus into their product design and marketing.

We anticipate this trend to continue as the industry makes additional advances implementing value-based provider.

We anticipate this trend to continue as the industry makes additional advances implementing value based provider arrangements.

To this end, e-health made important operational changes to our tele-sales organization last year, and more this year to align with the local and community-based nature of healthcare delivery.

To this end Ehealth made important operational changes so our tele sales organization last year and.

And more of this year to align with the local community based nature of healthcare delivery.

Carriers continue to demonstrate a commitment to Medicare advantage as a core growth driver and based on the 2024 plan designs are prioritizing robust competitive plan offerings.

Carriers continue to demonstrate a commitment to Medicare advantage as a core growth driver. And based on the 2024 plan designs are prioritizing robust competitive plan off.

Despite the relative stability of that MA benefits, we do expect to see some changes in carrier competitive dynamics, especially on the local market level.

Despite the relative stability of MA benefits, we do expect to see some changes in carrier competitive dynamics, especially on the...

We are prepared to support and buy seniors as they evaluate their current coverage and available options.

We are prepared to support by seniors as they evaluate their current coverage and available options.

Further, in situations where carriers have witcher on products and or exited markets.

Further in situations, where carriers have withdrawn products <unk> exited markets.

eHealth is prepared to proactively protect our customer relationships and to be opportunistic as we seek to grow our market share.

Ehealth is prepared to proactively protect our customer relationships.

<unk> opportunistic as we seek to grow our market share.

With respect to the Medicare distribution sector, we see the competitive environment is favorable.

With respect to the Medicare distribution sector, we see the competitive environment is favorable.

Throughout the past 12 months, we have observed exits and financial distress leading to bankruptcies, reorganization and divestitures, along with capacity reductions from several of our competitors.

Throughout the past 12 months, we have observed exits and financial distress, leading to bankruptcy reorganization and divestitures along with capacity reductions from several of our competitors.

And we will likely see more as new Medicare marketing regulations put strain on industry players that are not able to adjust their practices timely and cost effective.

And we will likely see more new Medicare marketing regulations put strain on industry players that are not able to adjust their practices timely and cost effectively.

Additionally, in the current financial environment is increasingly difficult for small private organizations to access capital.

Additionally, in the current financial environment, it's increasingly difficult for small private organizations to access capital.

As brokers adapt to the changing environment. They are increasingly focused on profitability and enrollment quality as opposed to growth at all cost.

As workers adapt to the changing environment, they are increasingly focused on profitability and enrollment quality as opposed to growth at all costs.

We believe this is a major positive for the industry. At the same time, we are seeing limited innovation in the sector in terms of consumer facing technology tools and omnichannel capability.

We believe this is a major positive for the industry.

At the same time, we are seeing limited innovation in the sector in terms of consumer facing technology tools and omnichannel capabilities.

In addition, telebroker industry marketing messaging remains largely generic.

In addition, hello broker industry marketing messaging remains largely generic.

This sets eHealth apart as we see ourselves as the strongest true omni-channel platform with a distinct brand.

This sets ehealth apart as we see ourselves as the strongest true omni channel platform with a distinct brand.

This creates an opportunity for us to build deeper relationships with consumers and carriers.

creates an opportunity for us to build deeper relationships with consumers and carriers.

Now moving to our third quarter results.

Total revenue for the third quarter was 64.7 million, representing 21% growth, compared to Q3 of 2022.

Total revenue for the third quarter was $64 7 million, representing 21% growth compared to Q3 of 2022.

Gapnet loss for the third quarter was 37 million and adjusted even a loss was 28.1 million.

GAAP net loss for the third quarter was $37 million and adjusted EBITDA loss was $28 1 million.

R.T. free results include positive tail revenue of 12.2 million.

Our Q3 results include positive tail revenue of $12 2 million.

Ehealth cumulative net favorable revenue adjustments since 2018, when ASC 606 was initially implemented.

E-HELS, cumulative net favorable revenue adjustment since 2018, when ASC 606 was initially implemented, is now up to 186 million. I can't emphasize the...

Now up to $186 million.

I can't emphasize the importance of this metric enough.

It speaks to the high quality and reliability of our commissions receivable asset and reflects cash that we are collecting above and beyond the initial revenue book at the time of enrollment.

It speaks to the high quality and reliability of our commissions receivable asset and reflects cash that we're collecting above and beyond the initial revenue booked at the time of enrollment.

Year to date Ehealth is recognized more than $30 million in total net sales.

Here to date, E-HALF has recognized more than 30 million in total net sales.

Strong performance of our existing member cohorts in terms of retention and cash generation contributed to our year over year increase in our Medicare advantage lifetime values at.

Strong performance of our existing member cohorts in terms of retention and cash generation contributed to a year of year increase in our Medicare Advantage lifetime values and allowed us to enter the fourth quarter with significantly stronger liquidity relative to our forecast.

It allowed us to enter the fourth quarter with significantly stronger liquidity relative to our forecast.

As of September 30, we had $161 million in cash cash equivalents and short term marketable securities.

As of September 30, we had 161 million in cash, cash equivalents, and short-term marketable security.

Operating cash outflow for the quarter was 24.7 million, an improvement compared to operating cash outflow of 29.6 million in Q3 above 2022.

Operating cash outflow for the quarter was $24 7 million an improvement compared to operating cash outflow of $29 6 million in Q3 of 2022.

John will discuss our two, three financial results and key metrics in greater detail later on the call.

John will discuss our Q3 financial results and key metrics in greater detail later on the call.

On the operational side, we made significant year over year improvements within our marketing sales and product organizations.

On the operational side, we made significant year over year improvements within our marketing, sales, and product organizations.

These changes take into account the latest macro and regulatory developments in our sector as well as our long term strategic goals.

These changes take into account the latest macro and regulatory developments in our sector, as well as our long-term strategic goals.

I'll begin with our rebrand a project that's been in the works for months and launched officially on October <unk>.

I'll begin with our read brand, a project that's been in the works for months and launched officially on October 2nd.

We identified a need for a refresh brand identity to reflect the transformational work that has taken place over the past two years towards building sustainable competitive differentiation.

We identified a need for our refresh brand identity to reflect the transformational work that has taken place over the past two years towards building sustainable competitive differentiation.

It is critical that the.

It is critical that the look and feel of our brand of spectacularly communicate e-health value propositions to consumers, carriers, and strategic partners.

Look and feel of our brands expectedly communicate ehealth value proposition to consumers carriers and strategic partners.

Our marketing team listened to many hours of consumer testimonials and focus groups.

Our marketing team listened to many hours of consumer testimonials and focus groups.

Let those take away the North Star for the rebrand.

Let those takeaways to be the north star for the rebrand.

The key takeaway from this process is that everyone deserves a positive health care plan shopping experience.

The key takeaway from this process is that everyone deserves a positive healthcare plan shopping experience.

and that e-hills has an opportunity to make this a reality by embracing transparency, making consumers best interests for our own, and showing them how easy it can be to compare plans from top insurers and find the right match whether by phone, one line assistant, or do it yourself online.

Ehealth has an opportunity to make this a reality by embracing transparency.

Consumers best interest of our own and showing them how easy it can be to compare plans from top insurers and find the right match whether by phone.

Online assisted or do it yourself online.

As part of our rebrand we strike a new tone in our consumer messaging emphasizing simplicity consumer empowerment.

As part of our rebrand, we strengthen new tone in our consumer messaging, emphasizing simplicity, consumer empowerment, and genuine often to-

And genuine authenticity.

Additionally, our rebrand includes a redesign of our omnichannel user experience.

Additionally, a rebranding pose of redesign over our omnichannel user experience, making it more intuitive and user friendly.

Making it more intuitive and user friendly.

We also introduced new television, direct mail, print, radio, and digital ads that we believe will study else apart in the minds of beneficiaries.

We also introduced new TV direct mail print radio and digital ads that we believe will set <unk> apart in the minds of beneficiaries.

Simply put, this rebrand represents a breath of fresh air for an industry that has been criticized for generic at often confusing marketing texts.

Simply put this rebrand represents a breath of fresh air for an industry that has been criticized for generic and often confusing marketing tactics.

Our new brand is exemplified by our brand ambassador, Eve, who will play a powerful role in our brand's affinity in storytelling with the goal of improving brand recall.

Our new brand as exemplified by our brand Ambassador Eve, who will play a powerful role in our brand affinity and storytelling with the goal of improving brand recall.

We encourage you to view our new TV ads and meet ease by visiting the e-health YouTube page or our new TV ads spots or posts.

We encourage you to view, our new TV ads need to ease by visiting the Ehealth Youtube page for our new television AD spots are posted.

Our AEP marketing strategy also includes scaling channels that works for us last year by expanding existing partnerships, adding new ones at optimizing market outreach through audience segmentation and targeting.

Our AEP marketing strategy also includes scaling channels that work for a flash year by expanding existing partnerships, adding new ones, and optimizing market outreach through audience segmentation and targeting.

New demand generation channels, where launch somewhat of a full scale basis and others in the limited pilot mode.

New demand generation channels were launched, some on a full scale basis, and others in the limited pilot mode.

For example, we re-entered the Direct TV channel after two years, deploying a fully redesigned strategy and method.

Example, we reentered the direct TV channel after two years deploying a fully redesigned strategy and messaging.

We are supporting our local market strategy by testing into local market campaigns with connected TV and radio ads as well as email outreach.

We are supporting our local market strategy by testing into local market campaigns with connected television and radio ads as well as E mail outreach.

And finally, we are testing social and consumer earned media channels that are reaching target audiences that our legacy marketing approach was not able to engage.

And finally, we are testing social and consumer earned media channels that are reaching target audiences that are legacy marketing approach was not able to engage.

All of these marketing activities are rooted in our discipline LTD to track objects.

All of these marketing activities are rooted in our disciplined LTV to CAC objectives.

As I mentioned earlier, our ability to be highly flexible and opportunistic in our channel strategy is 8 p.m. holds, allows us to shift between channels or strategies in order to meet our LTV to tackle.

As I mentioned earlier, our ability to be highly flexible and opportunistic in our channel strategy as AEP unfolds allows us to shift between channels for strategies in order to meet our LTV to CAC holes.

Through the collaboration between our marketing, e-commerce, and tele-sales teams, consumers will also see consistency and design and messaging across all of their touch points with e-hills.

Further collaboration between our marketing E Commerce and telesales teams consumers will also see consistency in design and messaging across all of their touch points with Ehealth.

All of our direct marketing channels now drive leads into both online and telephonic enrollment channels as opposed to the Siloed approach used in the past.

All of our direct marketing channels now drive leads into both online and telephonic enrollment channels as opposed to the siloed approach used in the past.

This allows us to truly leverage the omnichannel nature of our enrollment platform.

This allows us to truly leverage the Army Channel nature of our enrollment platform.

Moving to our sales organization.

In Q3, we completed our benefit advisor hiring and ramping process.

In Q3, we completed our benefit advisor hiring and ramping process.

We onboarded the largest advisor ramp in recent eHealth history, successfully achieving our headcount goals and conducting a comprehensive training program.

We onboard at the largest advisor ramp in recent Ehealth history.

First fully achieving our head count goals and conducting a comprehensive training program.

We began this process earlier in the year than we have in the past to give our new advisor classes additional at that before.

We began this process earlier in the year than we have in the past to give our new advisor classes additional at that before the stakes are exponentially raised in the fourth quarter.

Before the stakes are exponentially raised in the fourth quarter.

We believe this investment in earlier agent ramp will pay off this AEP for greater conversion rates and improve customer experience.

We believe this investment it earlier agent ramp will pay off this AEP for greater conversion rates and improved customer experience.

To this end, the conversion rate gap between our newly hired and tendered advisors has already narrowed meaningfully compared to prior years.

To this end.

The conversion rate gap between our newly hired and tenured advisors has already narrowed meaningfully compared to prior years.

We have also significantly expanded the number of agents supporting our carrier dedicated arrangements.

We have also significantly expanded the number of agents supporting our carrier dedicated range.

This is the first AP in which our sales organization features two distinct groups.

This is the first AEP, which our sales organization features two distinct groups.

One group supporting our core choice model and another driving or a growing carrier dedicated this.

One group supporting our core choice model.

Another driving our growing carrier dedicated business.

In preparation for the AEP, our sales organization made further refinements to our customer retention program aimed at cultivating beneficiary relationships year around with a particular focus on the first 90 days post enrollment.

In preparation for the AEP, our sales organization made further refinements to our customer retention program aimed at cultivating beneficiary relationships year round with a particular focus on the first 90 days post enrollment.

We're also engaged in audiences deemed by our models to be high risk with high touch customized outreach.

We are also engaged audience as deemed by our models to be high risk with high touch customized outreach.

This includes a particular focus on retaining our D-SNIP members and important demographic that is able to switch plans with more frequency than non-D-SNIP Medicare eligible.

This includes a particular focus on retaining our D. SNP members an important demographic that is able to switch plans with more frequency than non D. SNP Medicare eligible.

Our unwavering commitment to quality is demonstrating positive results as we continue to see encouraging outcomes. Both in terms of CPM scores and our receipt of accolades from many of our carrier partners.

Our unwavering commitment to quality is demonstrating positive results as we continue to see encouraging outcomes, both in terms of CTM scores and our receipt of accolades from many of our carrier partners.

In fact for many of our major carrier partners Ehealth speeds, the teller broker sector on quality performance and retention for the most recent AEP and OSP Medicare advantage cohorts.

In fact, for many of our major carrier partners, eHealthSeeds, the telebroker sector and quality performance and retention for the most recent AEP and OEP Medicare Advantage cohort.

These positive dynamics are reflected in our MA lifetime values and positive revenue adjustments this quarter. Here.

These positive dynamics are reflected in our MA lifetime values and <unk>.

Positive revenue adjustments this quarter.

Moving to our digital organization.

A new look and feel of our site launched ahead of the AP was implemented based on the analysis of customer needs and behaviors we observed on our platform.

A new look and feel of our site launched ahead of the AEP was implemented based on the analysis of customer needs and behaviors, we observed on our platform.

It is expected to drive an increase in online conversion, a significant operating lever, given that millions of customers come to our website annually to research and shop for health and justice.

It is expected to drive an increase in online conversions are significant operating lever given that millions of customers come to our website annually to research and shop for health insurance.

Our landing pages and messaging are now personalized based on audience and channel and align with corresponding marketing campaigns for a more seamless handoff.

Our landing pages and messaging are now personalized based on audience and channel and aligned with corresponding marketing campaigns for a more seamless handle.

2.0 version of our proprietary recommendation engine now includes additional benefit features in customer preference ranking. It is available to our benefit advisors as well as directly to our customers.

The 2.0 version of our proprietary recommendation engine now includes additional benefit features and customer preference ranking it as available to our benefit advisors as well as directly to our customers.

In addition to our updated plan recommendation engine.

In addition to our updated plan recommendation engine, we made material improvements to the tech experience of our benefit advisor.

Made material improvements to the tech experience of our benefit advisors.

This includes API integrations with third party data sources.

This includes API integrations with third party data sources.

that put important information at advisors' fingertips, reducing the amount of time they need to spend manually searching and typing during an enrollment call.

They put important information that advisors fingertips, producing the amount of time, they need to spend manually searching and typing during an enrollment call.

The key point here is that our commitment to technological excellence permeates, our entire omnichannel enrollment platform.

The key point here is that our commitment to technological excellence permeates our entire Omni-Cannel Roman platform. From online unassisted enrollment through fully telephonic enrollments.

Online unassisted enrollment through fully telephonic enrollments.

The final item to highlight within our digital organization is the optimization of our mobile experience.

The final item to highlight within our digital organization is the optimization of our mobile experience.

We've seen data over the past several quarters indicating that customers are increasingly interacting with our platform by a smart.

We've seen data over the past several quarters, indicating that customers are increasingly interaction with our platform via smartphones.

The new mobile user experience is decluttered, simple, and reflects the new look and feel of our rebrand.

The new mobile user experiences declutter simple and reflects the new look and feel of our rebrand.

As we finished the first three weeks of the AEP. The initial results further demonstrate our transformation plan, including the optimization of our sales and marketing processes is working.

As we finish the first three weeks of the AEP, the initial results further demonstrate our transformation plan, including the optimization of our sales and marketing processes.

eHealth brand message resonates with our customers and we're seeing strong unit economics in our direct channel.

Ehealth brand message resonates with our customers and we're seeing strong unit economics, and our direct channels other.

Other distribution platforms continue to maintain a more rational approach to demand generation compared to prior years. A favorable

Other distribution platforms continue to maintain a more rational approach to demand generation compared to prior years a favorable sign.

At the same time certain national carriers sort of in a more competitive position due to their strong stars performance and we expect we'll perform well this year in terms of enrollment growth.

At the same time, certain national carriers are in a more competitive position due to their strong stars performance and we expect to perform well this year in terms of enrollment growth.

In accordance with our diversification goals Ehealth also continues to develop our capabilities outside of our core Ma business.

In accordance with our diversification goals, E-Health also continues to develop our capabilities outside of our core MA business.

In 2023, we established a Medicare Supplement Advisory Team with dedicated leadership supported by MedSupp, Central Marketing Initiative.

In 2023, we established the Medicare supplement advisory team with dedicated leadership supported by Med sub centric marketing initiatives.

We're also seeing encouraging results from our ancillary products such as hospital indemnity plans.

They're also seeing encouraging results from our insulated products such as hospital and demy plants.

Med-Sop, financial-arriot plans play an important role in the menu of products we offer or our beneficiaries and in certain cases, pair well with our new to Medicare and D-SNIP audience strategies as they create key opportunities to deliver additional value to our customers.

Net financial Aerie plans play an important role in the menu of products. We offer are beneficiaries and in certain cases pair well with our new to Medicare D. SNP audience strategies as they create opportunities to deliver additional value to our customers and drive enrollment.

and drive enrollment outside of the annual enrollment period.

<unk> outside of the annual enrollment period.

We plan to pilot additional products and services in 2024.

We plan to pilot additional products and services in 2024.

Within our individual, family, and small business segment, our performance this year is primarily driven by direct to consumer sales, as well as favorable persistency metrics on our existing book of this.

Within our individual family and small business segment. Our performance. This year is primarily driven by direct to consumer sales as well as favorable persistency metrics on our existing book of business.

We've seen evidence that carriers are expanding their ISP portfolios and footprint.

We've seen evidence that carriers are expanding their IFP portfolios and footprints as the ACA market stabilizes after several challenging years.

As the market stabilizes after several challenging years.

We also remain bullish on the aircraft or individual coverage health reimbursement arrangements opportunity despite slightly lower adoption curve than we initially expected.

We also remain bullish on the aircraft or individual coverage, health reimbursement arrangement, opportunity, despite slightly lower adoption curve, than we initially expect.

We believe that ICRA will play a meaningful role in the future of employer-sponsored health insurance, and we intend to be there to support the

We believe that <unk> will play a meaningful role in the future of employer sponsored health insurance and.

And we intend to be there to support this growing trend.

In Q3, we created a dedicated Icris sales and service schemes to support brokers, employers, employees, and Icra administrators.

In Q3, we created a dedicated acreage sales and service teams to support brokers employers employees and administrators.

As we continue to execute through the critical annual enrollment period, I am confident in the health ability to deliver on the performance commitments we've made.

As we continue to execute through the critical annual enrollment period.

I am confident in <unk> ability to deliver on the performance commitments we've made this.

This includes returning the strong Medicare Advantage in Roman growth in the fourth quarter, while achieving expanded MA enrollment margins compared to a year ago.

This includes returning to strong Medicare advantage enrollment growth in the fourth quarter, while achieving expanded MA enrollment margins compared to a year ago.

We are also on target to deliver adjusted EBITDA profitability and a substantially more favorable cash flow profile for the full year 2023 relative to last year.

We are all at once.

Target to deliver adjusted EBITDA profitability, and a substantially more favorable cash flow profile for the full year 2023 relative to last year.

My confidence is rooted in the tremendous work that this team has done to prepare for the AEP as well as our observations during the first three weeks.

My confidence is rooted in the tremendous work that this team has done to prepare for the AEP, as well as our observations during the first three weeks.

We have the right team in place to lead our company forward at an inspired employee base that is committed to delivering for our customers with that I will pass the call to John <unk> to discuss our financial performance John.

We have the right team in place to lead our company forward at an inspired employee base that is committed to delivering for our customers.

With that, I will pass the call to John Stelvin to discuss our financial performance. John ?

Thank you Frank and good afternoon, everyone.

Thank you, Fran, and good afternoon, everyone. Our third quarter results reflect our AEP readiness efforts, including investments in scaling tele sales capacity.

Our third quarter results reflect our AEP readiness efforts, including investments in scaling talent sales capacity.

As our organization prepared for AEP, we continue to exercise cost discipline and work towards achieving adjusted EBITDA profitability.

As our organization prepared for AEP, we continue to exercise cost discipline and work towards achieving adjusted EBITDA profitability.

Our third quarter results also include positive tail or adjustment review indicative of strong performance of our Book of Business in both our operating segments, Medicare and IFPSMB.

Our third quarter results also include positive tail or adjustment revenue indicative of strong performance of our book of business and both our operating segments Medicare and <unk>.

The FP SMB.

Total revenue for the third quarter was 64.7 million, representing a 21% increase from the third quarter of 2022.

Total revenue for the third quarter was $64 7 million, representing a 21% increase from the third quarter of 2022.

Year over year revenue upside was driven primarily by the $12 2 million in net <unk> revenue that we recognized in the quarter.

Year over year revenue upside was driven primarily by the 12.2 million in net-tail revenue that we recognized in the quarter. And that compares to 3.5 million in net-tail in 2.3 of last year.

And that compares to $3 5 million in net sale in Q3 of last year.

Underneath that $9 3 million of the shale came from our Medicare book of business and $2 9 million came from our IAP F&B and ancillary products.

Underneath that, $9.3 million of detail came from our Medicare Book of Business, and $2.9 million came from our IFP, SMB, and ancillary products.

We have now reached $186 million in cumulative net sales since we adopted ASC 606.

We have now reached 186 million in cumulative net tail since we adopted AFC 606, including more than 30 million in net tail this year alone.

Including more than $30 million and net sale this year alone.

The main driver of third quarter positive tail was favorable cash collections from some of our Medicare-advanced cohorts relative to our original expectations.

The main driver of third quarter positive tail with favorable cash collections from some of our Medicare advantage cohort relative to our original expectations.

The LTV revenue, we recognized for each member cohort.

The LTV revenue we recognize for each member cohort consists of a combination of initial revenue booked at the time of enrollment and the revisions to that estimated lifetime value which we recognize over the life of that cohort.

So the combination of initial revenue booked at the time of enrollment.

And the revision to that estimated lifetime value, which we recognized over the life of that cohort.

Recall that we booked initial revenue with a constraint.

For our Medicare Danish product, we can strain LTVs by 7%.

For our Medicare advantage product, we constrained ltvs by 7%.

If cohort performance based on cash collection exceeds expectations estimated by the initial constraint LTV, that constraint is released over time in the form of positive adjustment revenue.

If cohort performance based on cash collection.

Seeds expectations estimated by the initial constrained LTV.

That constraint is released over time in the form of positive adjustment revenue.

Our cumulative net <unk> revenue of $186 million since our implementation of ASC 606 in 2018 should provide investors greater confidence in our revenue accounting process and related commissions receivable balances.

Our cumulative net tail revenue of $186 million since our implementation of ASC 606 in 2018 should provide investors greater confidence in our revenue counting process and related commissions receivable balance.

It seems, in the short period of time I've been here, that we are not given sufficient credit for our tail revenue, and the tail is not seen as a reflection of e-health underlying operating performance.

It seems in the short period of time I've been here that we are not given sufficient credit for our tail revenue and that shale is not seen as a reflection of ehealth underlying operating performance.

But make no mistake tailed speaks to the strength of our business and reflects the true value of our book of business that in aggregate continues to perform ahead of our original expectations.

But make no mistake. Kale speaks to the strength of our business and reflects the true value of our book of business that an aggregate continues to perform ahead of our original expectation.

This is in contrast to other industry players that have gone through substantial commission receivable impairments over the past two years.

This is in contrast to other industry players that have gone through substantial commission-received bull impairments over the past two years.

our consistently positive net adjustment revenue could be interpreted as conservatism within eHealth's Initial Revenue F-

Our consistently positive net adjustment revenue could be interpreted as conservatism within E. Health initial revenue estimates and that is a fair observation given our recent results.

And that is a fair observation given our recent result.

While we continue to work on refining our initial revenue estimates.

While we continue to work on refining our initial revenue estimates,

E-Health believes investors are better served with the conservative posture E-Health has employed.

Else believes investors are better served with the conservative posture Ehealth has employed.

Third quarter Medicare segment revenue was $55 5 million up 23% year over year.

Third quarter Medicare segment revenue was 55.5 million of 23% year over year.

Medicare's segment lost the $17.5 million in Q3 2023 and compares to segment loss of $23 million in Q3 2022.

Medicare segment loss was $17 5 million in Q3, 2023 and compares to segment loss of $23 million in Q3 dollars 22.

Key drivers of Medicare segment performance during the quarter included a decline in Medicare enrollment offset by higher Ltvs and net tail.

Key drivers of Medicare segment performance during the quarter included a decline in Medicare enrollments offset by higher MATL TVs and net tails.

Scluding tail, the Medicare's segment performs slightly lower expectations in terms of enrollment volume.

Excluding tail the Medicare segment performed slightly below our expectations in terms of enrollment volume.

Our operational focus in the quarter was on the AEP preparedness, including agent hiring and training.

Our operational focus in the quarter was on the AEP preparedness, including agent hiring and training.

Third quarter Medicare unit economics are typically characterized by our seasonally highest <unk> cost per approved member.

Third quarter Medicare Unit Economics are typically characterized by our seasonally highest CCNE cost-perproved member.

Given that the newly hired advisors are either still in training or just beginning to take live calls.

Given that the newly hired advisers are either still in training are just beginning to take live calls.

and therefore converting at lower rates on average than are more experienced advisors.

And therefore converting at lower rates on average than our more experienced advisors.

As Fran mentioned, this conversion got narrowed meaningfully as we entered the AEP.

As Fran mentioned this conversion gap narrowed meaningfully as we entered the AEP.

This AEP, new advisors, represent more than half of the E-Health Total Pellet Sales Capacity.

This AEP new advisors represent more than half of Ehealth total telesales capacity.

Third quarter approved any members to climb 7% year over year, relatively in line with the decline in our variable marketing and advertising spend during the quarter.

Third quarter approved any members declined 7% year over year relatively in line with the decline in our variable marketing and advertising spend during the quarter.

Total approved Medicare members, including Med sup in PDP products declined 10% over the same time period.

Total approved Medicare members, including MedSup and PDP products, decline 10% over the same time period.

Total variable Medicare cost for MA equivalent approved member was $1,546, a 27% year-over-year increase reflecting relatively flat variable marking for approved Medicare member, and a 50% increase in CCE-NE cost for approved Medicare member driven by the factors I just described.

Total variable Medicare cost per <unk> equivalent approved member was $1546, a 27% year over year increase reflecting relatively flat variable marketing per approved Medicare member and a 50% increase in <unk> costs per approved Medicare.

Member driven by the factors I just described.

We believe this investment in scaling our advisor base earlier in the year and putting them through an enhanced training protocol will yield positive returns in the fourth quarter.

We believe this investment in scaling our advisor base earlier in the year and putting them through an enhanced training protocol will yield positive returns in the fourth quarter.

Estimated lifetime value of our Medicare advantage products was $997 representing year over year growth of 5%.

Estimated lifetime value of our Medicare Advantage products was $997, representing your over-year growth of 5%.

LTV gross in the quarter was driven mostly by positive trends for both commissions collected and our carrier.

LTV growth in the quarter was driven mostly by positive trends for both commissions collected and our carrier mix.

In terms of persistency, our largest recent cohort enrolled during the fourth quarter of 22 continues to outperform prior ATP cohorts by approximately 100 basic.

In terms of persistency, our largest recent cohort enrolled during the fourth quarter of 'twenty two continues to outperform prior eight cohorts.

Cohorts by approximately 100 basis points.

This has positive implications for fourth quarter, Medicare advantage ltvs, assuming that trend persists.

This is Poverty and Implications for Fourth Quater Medicare Advantage LTVs assuming that they're 10%.

Non-commissioned revenue in the third quarter was $7.5 million, as compared to $4.4 million in Q3 2022, and was comprised primarily of Medicare sponsorship revenue.

Non commission revenue in the third quarter was $7 5 million as compared to $4 4 million in Q3, 2022 and was comprised primarily of Medicare sponsorship revenue.

Now moving to our individual family and small business segment, which includes our ancillary products as well.

Now moving to our individual family and small business segment, which includes our ancillary products as well.

Second revenue in the third quarter was 9.2 million or a year over year increase of 12%.

Segment revenue in the third quarter was $9 2 million or a year over year increase of 12%.

Second in-prope it was 4.6 million compared to 2.7 million in Q3 2022.

Segment profit was $4 6 million compared to $2 7 million in Q3 2022.

Q3 enrollment volume decrease within the segment offset by higher Ltvs and a $1 1 million increase in segment revenue.

2-3 enrollment volume decreased within the segment, offset by higher LTVs and a 1.1 million increase in segment tail revenue.

The growth until revenue year over year. It was almost entirely driven by our SMB book of business.

The growth and tail revenue year over year was almost entirely driven by our SMB book of business. The growth and tail revenue year was almost entirely driven by our SMB book of business.

Moving to our operating expenses.

Total non-GAP OPEX increased 6% compared to Q3 of 22, driven primarily by 38% year-over-year increase in CCNE associated with our larger benefit advisor base.

Total non-GAAP opex increased 6% compared to Q3 of 'twenty, two driven primarily by 38% year over year increase in cc any associated with our larger benefit advisor base.

non-GAAP marketing and advertising expense declined 5% year over year.

Non-gap marketing and advertising expense declines 5% year over year.

This reflects a 9% decrease in variable marketing and advertising costs, partially all set by our investment in rebrand.

This reflects a 9% decrease in variable marketing and advertising costs, partially offset by our investment in rebranding.

Fixed costs, or the combination of our tech and content and G&A expense lines, decreased 11% year over year as a result of our cost reduction after

Fixed costs are the combination of our tech and content and G&A expense lines decreased 11% year over year as a result of our cost reduction efforts.

Underneath that non-GAAP tech and content expense decreased 31%, while non-GAAP G&A expense increased by 13%.

Underneath that, non-GAAP tech and content expense decreased 31%, while non-GAAP G&A expense increased by 13%.

Higher non-GAAP G&A in the quarter was driven in part by higher personnel cost year over year.

Higher non-gap geneing in the quota was driven in part by higher personnel cost year over year.

Third quarter operating cash outflow was $24 7 million an improvement from $29 6 million in Q3, a year ago.

Third quarter operating cash outflow was 24.7 million, an improvement from 29.26 million in Q3 a year ago.

Despite supporting a substantially larger benefit advisor force than we did last year.

Despite supporting a substantially larger benefit advisor for some we did last year. This improvement was driven by stronger commission collection. Lower marking and advertising spend year over year. As well as our steadfast commitment to fixed cost discipline.

This improvement was driven by stronger Commission collection, lower marketing and advertising spend year over year as well as our steadfast commitment just fixed cost discipline.

Further, operating cash well for the trailing 12 months and in September 30th was positive 8.1 million, a significant improvement from negative 110.6 million for the trailing 12 months and in September 30th, 2022. 2.1 million for the trailing 12 months and in September 30th, 2022.

Further operating cash flow for the trailing 12 months ended September 30.

It was positive $8 1 million a significant improvement from negative $110 6 million for the trailing 12 months ended September 32022.

For the full year 2023, our guidance implies negative cash flow from operations as we invest in member acquisition during the fourth quarter AEP.

For the full year 2023, our guidance implies negative cash flow from operations as we invest in member acquisition during the fourth quarter AEP.

As a reminder, the majority of initial commission payments from AEP sale comes in during the first quarter of the following year and we continue to expect breakeven to positive operating cash flow for the trailing 12 months ending March 24.

As a reminder, the majority of initial commission payments from AEP sale comes in during the first quarter of the following year. And we continue to expect break even to positive operating cash flow for the trailing 12 months ending March 24.

ELF ended the quarter with 160.6 million in cash, cash equivalents and short-term marketable securities on our balance.

Ehealth ended the quarter with $166 million in cash cash equivalents and short term marketable securities on our balance sheet.

Our total commissions receivable balance was $780 6 million as of September 32023 <unk>.

Our total commissions receivable balance was 780.6 million as of September 30th, 2023, including 212.4 million, receivables that we expect to collect in the next 12 months.

Including $212 4 million in current receivables that we expect to collect in the next 12 months.

These significant positive tail that has been recognized over past quarters is an indicator that our commissions receivable balance is not only reliable.

The significant positive tail that has been recognized over past quarters is an indicator that our commissions receivable balance is not only reliable. What could actually represent a discount to the total task we could expect to collect on an unconstrained basis from our member base.

Actually represented discounts to the total cash we could expect to collect on an unconstrained basis from our member base.

Looking ahead to the fourth quarter, you should expect another sequential step up in absolute <unk> spend and a large increase in marketing expense as we ramp up existing channels and launch new ones.

Looking ahead to the fourth quarter, you should expect another sequential step up in absolute CC&E spend and a large increase in marketing expense as we ramp up existing channels and launch new ones.

At the same time, we forecast, an increase or telephonic and online conversion rates as compared to a year ago.

At the same time, we forecast an increase our telephonic and online conversion rates as compared to a year ago.

This is expected to drive an expansion of our MA enrollment margins as measured by LTD minus total acquisition cost per member.

This is expected to drive an expansion of our MAA enrollment margins as measured by LTV minus total acquisition cost per member.

We also expect improved fourth quarter net income and adjusted EBITDA driven by these improved margins as well as fixed cost leverage year over year.

We also expect improved fourth-quarter net income and adjusted EBITDA, driven by these improved margins, as well as six-cost leverage year-over-year.

In Q2, we increase our annual guidance to reflect the positive tail revenue we booked for that quarter.

In Q2, we increased our annual guidance to reflect the positive tail revenue, we booked for that quarter.

Given that we are in the midst of the annual enrollment period.

given that we are in the midst of the annual enrollment period and the significant impact that our performance during these weeks.

And the significant impact that our performance during these weeks and especially the last days of the AEP has on our overall annual results. We are reaffirming guidance provided in August.

especially the last days of the AEP has on our overall annual results. We are reaffirming guidance provided in on.

Based on all the extensive preparation that's being described in our solid financial footing, I am confident that E-Hell's well positioned to execute on our AEP plans and longer term financial goals as presented at the annual stay in May.

Based on all of the extensive preparation that train described and our solid financial footing I am confident that ehealth is well positioned to execute on our AEP plans and longer term financial goals as presented at the analyst day in May.

With that, I will turn the call back to frames for closing remarks.

With that I will turn the call back to Fran for closing remarks.

Thank you John before we open the call for questions I'd like to take a moment to highlight the significant progress. This organization has made in the past two years.

Thank you, John . Before we open the call for questions, I'd like to take a moment to highlight the significant progress this organization has made in the past two years.

Today, we are much stronger operationally and every major aspects of our business, including our telesales processes.

Today, we are much stronger operationally in every major aspect of our business, including our telephase processes, demand generation programs, consumer and agent-facing technology tools, carrier relations, customer satisfaction, and so much more.

And generation programs consumer and agent facing technology tools carrier relations customer satisfaction and so much more.

Our book of business is performing well with an improving retention trends and strong commissions low relative to our LTV model.

Our book of business is performing well with an improving retention trends and strong commission flow relative to our LTV models.

cost reduction program we implemented last year has led to significant improvement in our earnings and operating cash flow. As a result, we are in a strong liquidity position and on target to reach cash flow generation.

Cost reduction program, we implemented last year has led to significant improvement in our earnings and operating cash flow.

As a result, we are in a strong liquidity position and on target to reach cash flow generation.

Most importantly, our employees are motivated and engaged and looking forward to taking our company to the next stage as we complete the transformation process.

And now we will open the call for questions and answers operator.

And now we will open the call for questions and answers operator.

Thank you.

Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press star one. If you want to withdraw your question, please press star two. Your questions will be pulled in the other day.

Ladies and gentlemen, we will now begin the question and answer session showed you will have a question. Please press star one.

If you want to withdraw your question. Please press star two.

<unk> will be bolt in the order they are received.

If you are using a speaker phone please leave the handset before pressing any keys.

Are you seeing a speaker phone please lift the handset before pressing any keys.

One moment please for your first question.

One moment. Please for your first question.

Your first question comes from George Sutton from Craig Hallum. Please go ahead.

Your first question comes from Yard's son and from Kirk Halum. Please go ahead.

Thank you I've got a few questions first on the customer care and enrollment side obviously.

Thank you. I've got a few questions. First, on the customer care and enrollment side, obviously much more expense per approved member in Q3. You mentioned that that was an enhanced training protocol in part. Can you just give us a sense of what that means for Q4 or how much better are you set up? And will we see actual reductions in that line item on a per approved member basis in Q4?

Much more expense per approved member in Q3, you mentioned that that was an enhanced training protocol and part can you just give us a sense of what that means for Q4, how much better are you set up.

Will we see actual reductions in that line item on a per approved member basis in Q4.

Good afternoon, George Thanks for your question.

Good afternoon, George. Thanks for your question. Yes, I think the short answer is you will see improvements in the fourth quarter. We're very metrics oriented here. We know which tribes, offline, bottom line performance. We're mindful of not just...

Yes, I think the short answer is you will see improvements in the fourth quarter.

We're very.

Ah metrics oriented here, we know what drives topline and Bottomline performance.

We're mindful of not just <unk>.

Having the capacity to respond to inbound calls, but also making sure that where we invest the marketing dollars, we're getting the respectful and appropriate LTV to CAC outcome. Let me see if John would like to...

Having the capacity to respond to inbound calls.

But also making sure that where we invest our marketing dollars we're getting.

Respectful and appropriate LTV to CAC outcome, let.

Let me see if John would like to add anything to that.

No, for I think that's right. We expect the expansion and the LVU to tap margin. Thank you for it.

And I think that's right, we expect to see expansion in the Ulta beauty care margin.

In Q4.

Got it year over year so.

Got you over here. So others have also reported kind of early indications of what they're saying. Found somewhat consistent with what you're saying. I believe given you mentioned you were below playing a little bit in Q3, others have said they saw slow start to the season, but it has picked up relatively nicely since is that generally what you were saying in this messaging.

Others have also reported kind of early indications of what Theyre, saying.

Sounds somewhat consistent with what Youre, saying I believe given you mentioned you were below plan a little bit in Q3, others have said they saw a slow start to the season, but it is it has picked up relatively nicely since is that generally what you are saying in this messaging.

I think largely that's right George. I mean, you know, the first day we have...

I think largely that strike George.

<unk>.

The first day, we absolutely killed it.

And then things started to settle down a little bit. And in that first stage performance was largely reflecting the pipeline that we had built up for the agents to build up and we're able to move on it very quickly. And that was a Sunday, by the way, the good Sunday.

And.

And then.

Sort of.

Settle down a little bit.

And that first phase performance was largely reflecting our other pipeline that we had built up that the agents are built up and were able to move on it very quickly and that was a sunday by the way the huge Sunday.

So it has largely moved, you know, to what I would say is pretty predictable at this stage for 24 days into AEP.

So it has largely moved.

What I would say is pretty predictable at this stage for 24 days into AEP.

As you know, there's generally or at least historically asserts.

As you know there.

There is generally or at least historically a surge in those last 10 days.

And those last 10 days, we have no reason to believe it's going to be different this year.

We have no reason to believe that's going to be different this year.

But I would say.

to elaborate further, you know, we are an omni-channel distribution organization, and, you know, we have channels that are performing strongly, channels that have performed a little less than expected, but we see some signs over the last couple days of that improving.

To elaborate further.

And Omnichannel distribution organization and.

We have channels that are performing.

Strongly channels that have performed a little less than expected, but we see some signs over the last couple of days of that improving.

We see, you know, with our diversification of now having a dedicated carrier capability, we see different trends there as well. The agency started the business and the...

We see with our diversification of now having a dedicated carrier capability.

We see different.

Different trends there as well.

On the agency side of the business.

Sure.

The dedicated Terry side of the business, there's some similarities that there are also some interesting differences, which will certainly elaborate further if they continue when we report out for the quarter.

The dedicated carrier side of the business. There are some similarities but there are also some interesting differences, which will certainly elaborate further if they continue when we report our fourth quarter.

Okay, and then finally, just a comment and then a final question. The comment is on the TV AD I think it's really well done.

Okay, and then finally just a comment and then a final question. The comment is on the TV ad. I think it's really well done. Concept of reducing stress. So I certainly am eager to see kind of how that plays through this season. But on the question side, the 2025 CMS technical changes.

Sept of reducing stress, so I certainly am eager to see kind of how that plays through the season.

But on the on the question side, the 2025 CMS technical changes.

include a $642 fixed cost or fixed compensation arrangement. Can you explain what you see that meaning for you? And is that meant to target certain players in the industry specifically?

Include a $642 fixed costs are fixed compensation arrangement can you explain what you see that meaning for you and is that meant to target certain players in the industry specifically.

Well before I answer the question let me.

Well, before I answer the question, let me acknowledge what you've already shared in terms of the TV spot. We're really pleased with it. It's helping our branding recognition, and that's important. As you know, there's a lot of noise at this time of the year. The messaging needs to find its way through all that noise, and we are seeing some encouraging signs that indeed it's doing what we had opted to do. And the stress.

Acknowledge which you've already shared in terms of the TV spot.

Really pleased with it it is helping our branding recognition and thats important.

As you know Theres a lot of noise at this time of the year.

<unk>.

Find its way through all that noise.

Seeing some encouraging signs are indeed, it's doing what we had hoped it to do and the stress.

limiting press messaging is really resonating. As far as your question, as you know, the CMS did issue, it's proposed new roles for 2025 on Monday evening. And it's just under 500 pages.

Limiting fresh messaging is really resonating as far as your question as you know the.

CMS did issue.

Its proposed new rules for 2025 on Monday evening.

And if aluminum is just under 500 pages.

I would say that there's areas where we are still trying to decipher what the intent is.

I would say that there is areas, where we are still trying to decipher what the intent is that.

That's not uncommon. I'll remind you of what happened with the 48 hour rule, the scope of appointment. We experienced similar ambiguity. That's pretty typical. So clearly this will be a process, including an opportunity to talk to CMS, to comment to CMS before these proposed regulations become finalized. So we may have more to share with you later in the quarter.

That's not uncommon.

I'll remind you of what happened with the 48 hour rule the scope of appointment.

We experienced similar ambiguity.

That's pretty typical.

Clearly this will be a process.

Including an opportunity to talk with CMS to comment to CMS.

Before these proposed regulations become finalized so we may have more to share with you.

Later in the quarter.

Okay. Thanks, guys.

Thank you.

Thank you.

Thank you. Your next question comes from George Hill from Deutsche Bank. Please watch it.

Your next question comes from George Hill from Deutsche Bank. Please go ahead.

Hey, good evening guys, and thanks for taking the questions. One is just a thing I want to revisit on the tail revenue, which is if I remember like the margin on that comes through at a pretty high level. And I guess I just want to confirm that. And I guess I want to ask if you guys have any visibility into any more tail revenue coming through in Q4. And then I've got a couple more as well.

Hey, good evening, guys and thanks for taking the.

Questions. What is just I think I wanted to revisit on the slot revenue, which is if I remember like the margin on that comes through at a pretty high level.

Just wanted to confirm that and I guess I wanted to ask if you guys have any visibility into any more revenue coming through in Q4, and then I've got a couple more as well please.

George I'm going to let John take that and I may supplement it.

George, I'm gonna let John take that and I make supplement it, which John has to say.

<unk> has to say.

Sure. You know, the tail revenue relates to a prior period. So therefore, it is very high margin. I'll tell you, we do not guide or forecast tail forward. There are a lot of factors that go into how that tail gets developed. So our guidance for Q4 implied in the annual guidance does not include any tail.

Sure.

The tail revenue relates to a prior period.

So therefore, it is very high margin I would tell you we do not guide.

Guide or forecast tail forward.

There are a lot of factors that go into how that tail gets developed.

So our guidance for Q4 implied in the annual guidance does not include any tail.

Okay, that's your problem. That was pretty clear. I didn't know if you had anything else you want to add or I can just move on.

Okay.

That's pretty clear I, just want to add anything else you want to add or I can just move on.

I think it is an encouraging sign.

I think it's an encouraging sign. It's an early indicator of the important work we're doing with retention. So we're very encouraged.

It's early indicator of the important work, we're doing with retention.

So we are.

We're very encouraged.

The work is far from completed, but it's an important sort of...

The work is far from complete it but it's an important sort of.

Preliminary milestone.

Okay, and I guess how are you guys thinking about how you resource the IFP market given kind of what we're seeing in Medicaid redeterminations? Excuse me, and a lot of members, a lot of these people transitioning to ACA style plans with some degree of subsidy and we're seeing a lot of the MCO companies who you guys work with kind of put a pretty good result around what would look like IFP business for you guys with just what's the macro above on that.

Okay, and I guess, how are you guys thinking about how your resource the ISP market given kind of what we're seeing in Medicaid redetermination.

Excuse me and a lot of numbers a lot of these people transitioning to HSA style plans with some degree of subsidy and wishing all of the MTO.

Companies, who you guys work with some of the put up pretty good results around what would look like <unk> business for you guys just lots of macro thoughts on that.

Thanks for that question, George. You know, the individual market is an interesting, I would say phenomenal right now. If you've seen one state, you've seen one state. There's been states that have suspended the redetermination efforts.

Thanks for that question George.

The individual market.

Is.

And interesting I would say phenomenon right now.

<unk> seen one state you've seen one space.

Theres been states that have suspended the redetermination efforts.

We've seen states.

With their state exchanges, we're more difficult to work with them or there's limitations of what we can do. That said, we're still very committed to the individual market and we're looking at enhancements to our operating model to our marketing strategies. So, well, it hasn't been as much of a factor in 23. We aim to change that for 24 and beyond.

With the state exchanges, where it's more difficult to work with them.

There is limitations of what we can do.

That said.

We're still very committed to the individual market.

We're looking at enhancements to our operating model.

So our marketing strategies.

Well it hasnt been as much of a factor in 'twenty three.

We aim to change that for 'twenty four and beyond.

Okay.

I say for I do quit quit as quick wins for you to pick up on one of them which is I don't know if you I know you guys are in the position of 24 guidance out there yet but a lot of companies on the third quarter calls kind of talk about big moving pieces and puts in cakes. I was wondering if you guys would address that on my last follow up would just be it looks like the medd program is going to see a significant amount of disruption over the next two years. I know it's not important very important to you guys, but we just love how you're thinking about.

I think for I had two quick questions quick ones. Thank you picked up on one of them which is.

I don't know if you I know you guys aren't in a position to put 24 guidance out there yet a lot of companies on the third quarter calls I want to talk about the moving pieces and puts and takes I was wondering if you guys. When you put that on my last follow up would just be it looks like the med D program is going to see a significant amount of disruption over the next two years.

Got it.

Barry can you guys just love how youre thinking about.

you know, with the meds, either the opportunity or like the elimination of the opportunity because I looked up for you guys and I'll hop back in the queue.

What may be either the opportunity or until I can.

Elimination of the opportunity to both of you guys and I'll hop back in the queue. Thanks.

Let me address your first question, guidance. We don't provide 24 guidance until we report out to four, four year, 23 results, which will be early first quarter next year.

Well, let me address your first question.

Guidance, we don't provide 24 guidance until we report out Q4.

Full year 'twenty, three results, which will be early first quarter next year.

So more to come on that, we obviously have a governance process. We have to get forward by in in terms of our operating plan.

So more to come on that.

We obviously have a governance process, we have to do.

Forward buy in.

In terms of our operating plan.

As far as part D, I think you're right, there will likely be a fair amount of disruption on Medicare Part D.

As far as part D. I think youre right, there will likely be a fair amount of disruption on Medicare part D.

It's potentially.

Potentially going to be a catalyst for more movement into Medicare advantage because of most Medicare advantage programs have an integrated party program.

Potentially you're going to be a catalyst for more movement into Medicare advantage.

Because of most Medicare advantage programs have an integrated part D.

Program.

So, but to the extent that it's still necessary to complement.

But to the extent that its still necessary to complement.

Those who are in original Medicare with or without med sup.

those who are in Original Medicare with or without MedStop.

people are going to need it. In fact, you know, there's penalties if you don't sign up or when you first become eligible. So...

People are going to need it.

Fact, theres penalties, if you don't sign up for it when you first become eligible.

So.

Right now our thinking is.

Right now our thinking is that it could be a catalyst for more of an acute damage.

It could be a catalyst for more Medicare advantage.

Business.

Yes.

Yeah, I phrased the question, probably that's generally the direction I was going in is I would expect that you guys should see a bill but as PDP to make conversions in 24, in 25, I'm sorry, but I appreciate the comments. Thank you.

I phrased the question poorly Thats generally the direction I was going in as I would expect that you guys should see dividends PDP conversions in 2025 I'm sorry.

Appreciate the color. Thank you.

Thank you.

Your next question comes from Ben Hendrix from RBC Capital Markets. Please watch it.

Your next question comes from Ben Hendrix from RBC capital markets. Please go ahead.

Hi, This is Michael <unk> on for Ben.

Hi, this is Michael Murray on For Ben. Could you discuss the scaling of your tele-sales organization ahead of AEP? How does this compare to prior years and how are you thinking about the efficiency of these agents given potentially limited?

Could you discuss the scaling of your Telesales organization ahead of a head of AEP. How does this compare to prior years and how are you thinking about the efficiency of these agents given potentially limited experience.

Hi, Mike Thanks for the question.

Hi Mike, thanks for the question. You know, the scaling has, I would say, is comparable to what we did a couple of years ago.

The scaling has I would say is comparable to what we did a couple of years ago.

As you know, we needed to reset our sales organization and it's part of the transformation. And we did that successfully in April of 22.

As you know we needed to reset.

Our sales organization as part of the transformation and we did that successfully in April of 'twenty two.

The advancements that have been made on our sales effectiveness and our marketing optimization.

The advancements that have been made on our sales effectiveness.

At our marketing optimization gave us confidence that we could scale it again.

confidence that we could scale it again. Plus, you know, for our diversification efforts and having the dedicated carrier of BPO capabilities, we needed to ramp up for that opportunity. So it's, it's, it's,

Plus through our diversification efforts and having the dedicated carrier bto capabilities, when we needed to ramp up for that opportunity.

That didn't exist.

when we were, you know, last at a comparable level a few years back. So the scaling really accomplishes our strategic needs on the agency side, as well as on the dedicated carrier BPOs out of our business.

When we were.

Class at a comparable level a few years back so the scaling really accomplishes our strategic needs on the agency side as well as on the dedicated carrier side of our businesses.

As far as that of tenure go ahead, what I can tell you.

As far as it can, you're... Oh, go ahead. What I can tell you...

And it's really a testament to the effectiveness of our training. Our sales organization has just an incredibly...

And it's really a testament to the effectiveness of our training.

Our sales organization has just been incredibly.

well-tuned training capabilities that is continuous. It's not one and none. I mean, it is continuous every day.

Well tuned training capability that is continuous.

Not one and done.

Tenuous everyday.

We send out what we call a smooth bite and it's a pre-reformment in video.

We send out what we call a smooth.

And it's a three to four minute video that provides training chips to both new and tenured agents and I've watched him every day because.

that provides training tips to both new and tendered agents.

And I watch them every day because, you know, it's important to understand what we're focusing on and its message resonating. So training is not one and done, it's continuous. And it's been effective at narrowing the gap between tendered agents conversion performance.

It's important to understand what we're focusing on and its message resonating. So training is not one and done its continuous and it's.

<unk> been affected narrowing the gap between tenured agents conversion performance and new hires so I'm really pleased with progress.

and new hires. So I'm really pleased with the progress. And the learning curve is fast, and I think we accelerated because of all of our training techniques.

And.

The learning curve as fast and I think we accelerated because of all of our training techniques.

Alright, Thats really helpful. Thank you.

That's really helpful, thank you. And then just a quick one on your local teams. Could you remind us how many markets you're in for this AEP and how does performance in these markets compare with other markets?

And then just a quick one on.

Your local teams could you remind us how many markets you're in for this this AEP and how does performance in these markets compare with other markets. Thanks.

Sure Mike we started with.

Sure. Mike, we started with really two teams last year. We made a proof of concept that it does produce better performance than focusing only on a national operating model. And it absolutely did prove that local health care is local. And we've found that when you have agents better,

Really two teams last year.

We needed proof of concept.

Does.

Produce better performance.

Focusing only on the international operating model.

It's absolutely good proof that local healthcare is local.

And we've found that when you have agents better or.

are focused more on what's available in a defined, a very defined geographic region, not just from a carrier perspective, but from a provider perspective, particularly with value-based arrangements.

Our focus more on what's available in a defined a very defined geographic region.

Just from a carrier perspective, but from a provider perspective, particularly with value based arrangements.

and plans that offer social-determinative health solutions. They can be even more effective than being responsive to beneficiaries' needs. We expanded that to six markets this year, and at say early signs are confirming that it continues to be the right model. How far we go with this remains to be seen, but I think we made an important investment for 23 and it's looking good. Thank you.

And plans that offer social determinant of health.

Solutions that can be even more effective and being responsive to beneficiaries needs.

We expanded that to six markets this year.

And I'd say early signs are confirming that continues to be the right model.

How far we go with this remains to be seen but I think we made an important.

<unk> 423 units is looking good.

Thank you.

Thank you.

There are no further questions that this time, I'll turn the call over to friends so it meant from closing remarks. Please watch out.

There are no further questions at this time I'll turn the call over to France Sweetman Franco's remarks. Please go ahead.

Well, thank you operator, and thank everyone again for <unk>.

Well, thank you, operator, and thank everyone again for listening in on our call today, and we look forward to having one of one conversations over the coming days. Thank you.

Listening in on our call today, and we look forward to having 101 conversations over the coming days. Thank you.

Goodbye.