Oscar Full Year 2025 Oscar Health Inc Earnings Call | AllMind AI Earnings | AllMind AI
Full Year 2025 Oscar Health Inc Earnings Call
Speaker #1: Fourth quarter and full year 2025 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session.
Speaker #1: Today we ask you to limit yourself to one question and one follow-up. If you would like to ask a question during this time, simply press star, followed by the number 1 on your telephone keypad.
Speaker #1: If you would like to withdraw your question, press star 1 again. Thank you. I will now turn the call over to Chris Potochar, Vice President of Treasury and Investor
Speaker #1: If you would like to withdraw your question, press star 1 again. Thank you. I will now turn the call over to Chris Potochar, Vice President of Treasury and Investor Relations.
Speaker #2: Good morning, everyone. Thank you for joining us for our fourth quarter and full year 2025 earnings call. Mark Bertolini, Oscar Health's Chief Executive Officer, and Scott Blackley, Oscar Health's Chief Financial Officer, will host this morning's call.
Speaker #2: This call can also be accessed through our Investor Relations website at ir.hiaosker.com. Full details of our results and additional management commentary are available in our earnings release, which can be found on our Investor Relations website at ir.hiaosker.com.
Speaker #2: Any remarks that Oscar makes about the future constitute forward-looking statements within the meaning of safe harbor provisions under the Private Securities Litigation Reform Act of 1995.
Speaker #2: Actual results may differ materially from those indicated by those forward-looking statements as a result of various important factors, including those discussed in our quarterly report on Form 10Q for the period ended September 30th, , 2025, filed with the Securities and Exchange Commission, and other filings with the SEC, including our annual report on Form 10K for the period ended December 31st, 2025, to be filed with the SEC.
Speaker #2: Such forward-looking statements are based on current expectations as of today. Oscar anticipates that subsequent events and developments may cause estimates to change. While the company may elect to update these forward-looking statements at some point in the future, we specifically disclaim any obligation to do so.
Speaker #2: A reconciliation of these measures to the most directly comparable gap measures can be found in the fourth quarter and full year 2025 earnings press release available on the company's Investor Relations website at ir.hiaosker.com.
We have not provided a quantitative reconciliation of estimated full year 2026 adjusted EBITDA as described on this call to gap net income because Oscar is unable, without making unreasonable efforts, to calculate certain reconciling items with confidence.
Speaker #2: With that, I will turn the call over to our CEO, Mark Bertolini.
Speaker #3: Good morning. Thank you, Chris, and thank you all for joining us. Today, Oscar announced fourth quarter and full year 2025 results, and the 2026 outlook.
Speaker #3: We reported total revenue of $11.7 billion, a 28% increase year over year, our SG&A expense ratio of 17.5%, improved by approximately 160 basis points, over the prior year.
Speaker #3: Reflecting continued efficiency gains through growth, disciplined expense management, and AI and technology advancements across the business. MLR increased 570 basis points year over year, to 87.4%, and our 2025 loss from operations was $396 million.
Speaker #3: Primarily due to higher market morbidity, resulting in a higher risk adjustment payable. Oscar is on track to return to profitability this year. We expect a significant year-over-year improvement of nearly $750 million in earnings from operations in 2026.
Speaker #3: Representing the midpoint of our guidance, Scott will discuss our financials in more detail shortly, before I get into our business highlights, I want to provide an update on the performance of the individual market.
Speaker #3: Overall, 2025 was a reset year for the industry. The industry-wide increase in market morbidity due to Medicaid Lives entering the market and program integrity initiatives shifted market dynamics.
Speaker #3: Oscar embraced the change and positioned the company for strong top-line growth and margin expansions in 2026. We took decisive actions with a disciplined pricing, distribution, and product strategy to go after profitable growth as competitors pulled back or exited the market.
Speaker #3: Our pricing strategy always assumed the expiration of enhanced premium tax credits. Our final 2026 rates also reflected higher market morbidity, elevated trend, and the effects of program integrity initiatives.
Speaker #3: Early 2026 open enrollment results demonstrate the resilience of the individual market. The latest CMS data indicates overall market membership of 23 million lives representing a better-than-expected decline of 5% year over year.
Speaker #3: We expect many passively enrolled members facing higher premiums will exit the market when the grace periods expire. We will therefore have greater clarity on final paid membership and market contraction when CMS releases final enrollment data mid-year.
Speaker #3: Current enrollment data indicates market contraction may track toward the lower end of our original projection of 20 to 30%. The individual market stability underscores the priority consumers place on maintaining health coverage, more small business owners, working Americans, and gig workers are entering the market as group insurance fails to meet their affordability needs.
Speaker #3: The individual market's fundamental characteristics, combined with a larger and growing addressable morbidity changes without dramatic trend market, can absorb impacts. Oscar is in a strong position to continue leading the individual market and defining the future of consumer-centered healthcare for all Americans.
Speaker #3: Now I will review our business highlights. The 2026 open enrollment period was a record for the company. Oscar delivered another year of above-market growth.
Speaker #3: And we are privileged to serve 3.4 million members as of February 1st, 2026. We expect to start the second quarter with approximately 3 million paid members, a 58% increase year over year.
Speaker #3: Member retention remains solid across the book, driven by our suite of affordable products, agentic AI features, and a superior member experience. Oscar's market share across our footprint increased from 17% in 2025 to 30% in 2026.
Speaker #3: We continue to grow IFP and ICRA membership in prominent service areas, including new and existing markets in Arizona, Florida, New Jersey, and Texas. The team created new cost-effective bronze and gold plans to support consumers losing enhanced premium tax credits.
Speaker #3: An expanded broker partnerships by 60% to manage distribution across the overall market. Our integrated strategy, which premium tax credit expiration, positioned us to profitably capture new membership in the active shopping season.
Speaker #3: Product innovation was a key growth driver of this open enrollment. We launched several new lifestyle offerings tailored to certain conditions and stages of life.
Speaker #3: These include Hello Meno, the first menopause plan in the ACA. When a salute, our Spanish-first experience for members with diabetes, and Hy-Vee Health with Oscar, our landmark ICRA plan.
Speaker #3: Our lifestyle products are attracting new consumer segments and creating a loyal customer base. Members enrolled in our lifestyle products have above-average retention rates and are 50% more likely to recommend Oscar to family and friends.
Speaker #3: There are also more likely to come in as direct enrollments, demonstrating the greater attachment to our brand. Our deep understanding of the consumer and the strength of our product experience continue to create powerful entry points for consumers, positioning us for long-term IFP and ICRA growth.
Speaker #3: Oscar investments in AI are creating efficiencies across the business as we grow. We lowered administrative costs by $160 basis points year over year while significantly increasing membership.
Speaker #3: AI is integrated across the Oscar platform, enabling teams to automate routine tasks. Efficiently scale our service operations and improve decision support. For example, our agentic AI bot for care guides reduced response times by 67% during peak and open enrollment period.
Speaker #3: AI is also central to our member experience. Oswell, our industry-first health agent, now completes 86% of questions received from members with high accuracy and quality.
Speaker #3: We continue to embed Oswell across our product portfolio to help members take control of their health. The impact of AI on our efficiency and the quality of the interactions for our members is unparalleled in its pace in my 40 years in this industry.
Speaker #3: In summary, Oscar's disciplined pricing, record-high membership, and top-line growth lay a strong foundation for this year. We are well-positioned to significantly expand margins and return to profitability in 2026.
Speaker #3: Our strategic priorities position Oscar to shape the next evolution of the individual market in the following ways. First, accelerate national IFP and ICRA expansion.
Speaker #3: Second, create lifestyle products with an exceptional consumer experience. And third, drive operational excellence through AI and frictionless execution. The individual market is the engine of consumer-driven healthcare.
Speaker #3: When consumers choose how and where to spend their money, they exploit inefficiencies and improve the quality of the interaction. We see in our own growth the power of designing products around consumer needs.
Speaker #3: That's the promise of the individual market. The promise of choice. The promise of long-term innovation. Innovation our country needs to turn healthcare into a market that fits real lives and creates meaningful coverage for life.
Speaker #3: I want to thank our Oscar team for their dedication to our customers. And for delivering a successful open enrollment. Our 12 years of experience in the individual market will drive results for 2026 and beyond.
Speaker #3: I will now turn the call over to Scott. Scott?
Speaker #4: Thank you, Mark. And good morning, everyone. 2025 was carriers as market morbidity stepped up across a challenging year for ACA the industry. We experienced these industry-wide trends with higher-than-expected claims, and lower-than-expected risk adjustment offset, leading to a net loss of $443 million in 2025.
Speaker #4: Over the course of 2025, we took appropriate steps to position Oscar to deliver strong earnings in 2026, including disciplined pricing and cost management actions.
Speaker #4: I'll begin with a brief overview of fourth-quarter results, review of our full-year performance, and then discuss our outlook for 2026. Starting with the fourth quarter, we ended the year with approximately 2 million members and increase of 22% year over year.
Speaker #4: Membership growth was driven by solid retention, above-market growth during open enrollment, and continued SEP member additions. The fourth-quarter medical loss ratio was 95.4%, an increase of 730 basis points year over year.
Speaker #4: During the quarter, we received an updated risk adjustment report for claims through October. The report indicated that overall market morbidity remained stable from the third quarter to the fourth quarter.
Speaker #4: However, relative to our expectations, Oscar's membership skewed healthier than the broader market, which required an increase of our risk adjustment accrual of 275 million in the fourth quarter.
Speaker #4: The fourth-quarter risk adjustment true-up was partially offset by 99 million of favorable in-year development and 36 million of favorable prior-period development, primarily related to claims runout from the prior year.
Speaker #4: Overall utilization in the quarter was modestly above our expectations. Inpatient utilization continued to moderate, while outpatient and professional increase, which we believe was associated with members' accelerating care as the enhanced premium tax credits expired.
Speaker #4: Pharmacy utilization was largely in line with our expectations. Turning to the full year, total revenue increased 28% year over year to $11.7 billion, driven by membership growth, partially offset by an increase in the net risk adjustment payable.
Speaker #4: The full-year medical loss ratio was 87.4%, an increase of 570 basis points year over year. Risk adjustment was a headwind throughout 2025, driven by higher market morbidity which we primarily attribute to the full-year impact of members entering the ACA market as a result of Medicaid redeterminations as well as program integrity efforts.
Speaker #4: Risk transfer as a percentage of direct premiums was approximately 18.5% for 2025, representing a 390 basis point increase year over year. Switching to administrative costs, we continued to drive improvements in our SG&A expense ratio.
Speaker #4: The full-year SG&A expense ratio improved by approximately 160 basis points year over year to 17.5%. The year-over-year improvement was driven by fixed-cost leverage, lower exchange fee rates, and disciplined cost management, including an increased impact from technology and AI initiatives.
Speaker #4: The loss from operations for the full year was approximately $396 million, a change of 454 million year over year driven primarily by the higher risk adjustment payable.
Speaker #4: The adjusted EBITDA loss for the full year was approximately $280 million, a change of 479 million year over year. Turning to 2026, we have been preparing for the expiration of the enhanced premium tax credits for some time, and took deliberate actions in 2025 to position the business for profitable growth and improve financial performance.
Speaker #4: We introduced innovative and affordable plan designs aligned with member needs, optimized our distribution strategy, and took a measured approach to geographic expansion. Our disciplined pricing assumed an expected market contraction at the high end of our previously communicated 20 to 30 percent range, driven by the expiration of enhanced premium tax credits and CMS program integrity initiatives.
Speaker #4: We also refiled rates in states covering approximately 99% of our membership to reflect the higher market morbidity in 2025. Together, these actions position us to profitably drive share growth.
Speaker #4: For 2026, we expect total revenues to be in the range of $18.7 billion to $19 billion, an increase of 61% year over year at the midpoint, driven by another year of above-market growth during open enrollment, solid retention, and rate increases.
Speaker #4: While our weighted average rate increase for 2026 was approximately 28%, the increase on a per-member per-month basis is lower, reflecting shifts in member age and metal mix.
Speaker #4: Our outlook also reflects elevated churn this year, driven primarily by passively enrolled members facing higher premiums following the sunset of the enhanced premium tax credit and ongoing CMS program integrity initiatives.
Speaker #4: perspective, our average members From a member profile 38 years old, approximately one year younger year over year. As expected, we saw migration from silver plans to bronze and gold plans, reflecting plan designs intended to offer affordable options following the expiration of the enhanced premium tax credits.
Speaker #4: For 2026, we expect risk adjustment as a percentage of direct premiums to be approximately 20%, based on our updated membership mix, and 2025 risk adjustment experience.
Speaker #4: Turning to medical costs, we expect our medical loss ratio to be in the range of 82.4% to 83.4%, representing 450 basis points of year-over-year improvement at the midpoint.
Scott Blackley: sold approximately 1 year younger year-over-year. As expected, we saw migration from Silver Plans to Bronze and Gold Plans, reflecting plan designs intended to offer affordable options following the expiration of the enhanced premium tax credits. For 2026, we expect risk adjustment as a percentage of direct premiums to be approximately 20% based on our updated membership mix and 2025 risk adjustment experience. Turning to medical costs, we expect our medical loss ratio to be in the range of 82.4% to 83.4%, representing 450 basis points of year-over-year improvement at the midpoint. Our outlook reflects elevated market morbidity observed in 2025, an incremental increase in morbidity in 2026, and medical cost trends and utilization patterns largely consistent with our 2025 experience.
Scott Blackley: sold approximately 1 year younger year-over-year. As expected, we saw migration from Silver Plans to Bronze and Gold Plans, reflecting plan designs intended to offer affordable options following the expiration of the enhanced premium tax credits. For 2026, we expect risk adjustment as a percentage of direct premiums to be approximately 20% based on our updated membership mix and 2025 risk adjustment experience. Turning to medical costs, we expect our medical loss ratio to be in the range of 82.4% to 83.4%, representing 450 basis points of year-over-year improvement at the midpoint. Our outlook reflects elevated market morbidity observed in 2025, an incremental increase in morbidity in 2026, and medical cost trends and utilization patterns largely consistent with our 2025 experience.
Speaker #4: Our outlook reflects elevated market morbidity observed in 2025, an incremental increase in morbidity in 2026, and medical cost trends in utilization patterns largely consistent with our 2025 experience.
Emission from silver plans to bronze and gold plans, reflecting planned designs intended to offer affordable options. Following the exploration of the enhanced premium tax credits for 2026, we expect risk adjustment as a percentage of direct premiums to be approximately 20% based on our updated membership mix in 2025 risk.
Speaker #4: We also incorporated additional third-party data to assess the risk profile of new members, which is tracking modestly better than our pricing and expectations, while renewal risk scores are in line with our expectations.
<unk> experience turning to medical costs, we expect our medical loss ratio to be in the range of 82, 4% to 83, 4% representing 450 basis points of year over year improvement at the midpoint our outlook reflects elevated market morbidity observed in 2025 and incremental increase.
Speaker #4: With respect to seasonality, we expect MLR to be lowest in the first quarter and highest in the fourth quarter, as members meet their annual deductibles.
Speaker #4: On administrative expenses, we expect continued improvement in our SG&A expense ratio. We expect the SG&A expense ratio to be in the range of 15.8% to 16.3%, representing an approximately 140 basis point year-over-year improvement at the midpoint.
And morbidity in 2026, and medical cost trends and utilization patterns largely consistent with our 2025 experience. We also incorporated additional third party data to assess the risk profile of new members, which is tracking modestly better than our pricing expectations, while renewal risk scores are in line with our X.
Speaker #4: We continue to see the benefits of scale as fixed-cost leverage and variable expense efficiencies driven by technology and AI are expected to drive further improvement in our SG&A expense ratio.
Scott Blackley: We also incorporated additional third-party data to assess the risk profile of new members, which is tracking modestly better than our pricing and expectations, while renewal risk scores are in line with our expectations. With respect to seasonality, we expect MLR to be lowest in Q1 and highest in Q4 as members meet their annual deductibles. On administrative expenses, we expect continued improvement in our SG&A expense ratio. We expect the SG&A expense ratio to be in the range of 15.8% to 16.3%, representing an approximately 140 basis point year-over-year improvement at the midpoint. We continue to see the benefits of scale as fixed cost leverage and variable expense efficiencies driven by technology and AI are expected to drive further improvement in our SG&A expense ratio.
Scott Blackley: We also incorporated additional third-party data to assess the risk profile of new members, which is tracking modestly better than our pricing and expectations, while renewal risk scores are in line with our expectations. With respect to seasonality, we expect MLR to be lowest in Q1 and highest in Q4 as members meet their annual deductibles. On administrative expenses, we expect continued improvement in our SG&A expense ratio. We expect the SG&A expense ratio to be in the range of 15.8% to 16.3%, representing an approximately 140 basis point year-over-year improvement at the midpoint. We continue to see the benefits of scale as fixed cost leverage and variable expense efficiencies driven by technology and AI are expected to drive further improvement in our SG&A expense ratio.
Speaker #4: We expect our SG&A expense ratio to be fairly consistent in the first three quarters, with an uptick in the fourth quarter. We expect meaningfully improved financial performance and a return to profitability in 2026.
Spectation.
With respect to seasonality, we expect MLR to be lowest in the first quarter and highest in the fourth quarter as members meet their annual deductibles.
On administrative expenses, we expect continued improvement in our SG&A expense ratio.
Speaker #4: We expect earnings from operations to be in the range of $250 million to $450 million, a significant improvement of nearly 750 million year over year, implying an operating margin of approximately 1.9% at the midpoint, adjusted EBITDA is expected to be approximately 115 million higher than earnings from operations.
We expect the SG&A expense ratio to be in the range of 15, 8% to 16, 3% representing an approximately 140 basis point year over year improvement at the midpoint, we continue to see the benefits of scale as fixed cost leverage and variable expense efficiencies driven by technology and AI are expected to drive further.
Speaker #4: Shifting to the balance sheet, we have taken opportunistic steps to strengthen our capital position and optimize our capital structure. As a reminder, during the third quarter, we increased our capital in preparation for 2026 growth, completing a $410 million convertible notes offering due 2030, generating $360 million of net proceeds.
Improvement in our SG&A expense ratio, we expect our SG&A expense ratio to be fairly consistent in the first three quarters with an uptick in the fourth quarter we.
Scott Blackley: We expect our SG&A expense ratio to be fairly consistent in Q1, Q2, and Q3, with an uptick in Q4. We expect meaningfully improved financial performance and a return to profitability in 2026. We expect earnings from operations to be in the range of $250 million to $450 million, a significant improvement of nearly $750 million year-over-year, implying an operating margin of approximately 1.9% at the midpoint. Adjusted EBITDA is expected to be approximately $115 million higher than earnings from operations. Shifting to the balance sheet, we have taken opportunistic steps to strengthen our capital position and optimize our capital structure.
Scott Blackley: We expect our SG&A expense ratio to be fairly consistent in Q1, Q2, and Q3, with an uptick in Q4. We expect meaningfully improved financial performance and a return to profitability in 2026. We expect earnings from operations to be in the range of $250 million to $450 million, a significant improvement of nearly $750 million year-over-year, implying an operating margin of approximately 1.9% at the midpoint. Adjusted EBITDA is expected to be approximately $115 million higher than earnings from operations. Shifting to the balance sheet, we have taken opportunistic steps to strengthen our capital position and optimize our capital structure.
We expect meaningfully improved financial performance and a return to profitability in 2026, we expect earnings from operations to be in the range of $250 million to $450 million, a significant improvement of nearly $750 million year over year, implying an operating margin of approximately one 9% at the midpoint.
Speaker #4: Subsequent to that transaction, we entered into a new $475 million three-year revolving credit facility. The transaction was well-supported by a strong syndicate of top-tier banks and executed on favorable terms, further strengthening our balance sheet and providing additional flexibility as we execute on our strategic plans.
Adjusted EBITDA is expected to be approximately $115 million higher than earnings from operations shifts.
Shifting to the balance sheet, we've taken opportunistic steps to strengthen our capital position and optimize our capital structure.
Speaker #4: We ended the year with approximately $5.5 billion of cash and investments, including $414 million at the parent. As of December 31, 2025, our insurance subsidiaries had approximately $1 billion of capital in surplus, including $315 million of excess capital.
As a reminder, during the third quarter, we increased our capital in preparation for 2026 growth completing a $410 million convertible notes offering due 2030 generating $360 million of net proceeds subsequent.
Scott Blackley: As a reminder, during Q3, we increased our capital in preparation for 2026 growth, completing a $410 million convertible notes offering due 2030, generating $360 million of net proceeds. Subsequent to that transaction, we entered into a new $475 million 3-year revolving credit facility. The transaction was well supported by a strong syndicate of top-tier banks and executed on favorable terms, further strengthening our balance sheet and providing additional flexibility as we execute on our strategic plans. We ended the year with approximately $5.5 billion of cash and investments, including $414 million at the parent. As of 31 December 2025, our insurance subsidiaries had approximately $1 billion of capital and surplus, including $315 million of excess capital.
Scott Blackley: As a reminder, during Q3, we increased our capital in preparation for 2026 growth, completing a $410 million convertible notes offering due 2030, generating $360 million of net proceeds. Subsequent to that transaction, we entered into a new $475 million 3-year revolving credit facility. The transaction was well supported by a strong syndicate of top-tier banks and executed on favorable terms, further strengthening our balance sheet and providing additional flexibility as we execute on our strategic plans. We ended the year with approximately $5.5 billion of cash and investments, including $414 million at the parent. As of 31 December 2025, our insurance subsidiaries had approximately $1 billion of capital and surplus, including $315 million of excess capital.
Speaker #4: To help frame our capital position in the context of our growth outlook, I want to spend a moment on regulatory capital requirements. While individual states vary, a useful rule of thumb is that for every $1 billion of premiums, we are required to hold approximately $50 million of capital, which reflects roughly 55% quota share reinsurance seeding percentage for 2026.
Subsequent to that transaction, we entered into a new $475 million three year revolving credit facility.
The transaction was well supported by a strong syndicate of top tier banks and executed on favorable terms and further strengthening our balance sheet and providing additional flexibility as we execute on our strategic plans.
We ended the year with approximately $5 5 billion of cash and investments, including $414 million at the parent.
Speaker #4: Overall, our capital position remains very strong. In closing, 2025 marked a shift in the individual market dynamics. Oscar has been in the ACA since its inception, and today we are operating from a position of scale and experience.
As of December 31, 2025, our insurance subsidiaries had approximately $1 billion of capital and surplus including $315 million of excess capital.
Speaker #4: That perspective has informed the actions we've taken to position our business for profitable growth in a rational market and improved financial performance. We are well-positioned to return to meaningful profitability this year.
Scott Blackley: To help frame our capital position in the context of our growth outlook, I want to spend a moment on regulatory capital requirements. While individual states vary, a useful rule of thumb is that for every $1 billion of premiums, we are required to hold approximately $50 million of capital, which reflects roughly 55% quota share, reinsurance ceding percentage for 2026. Overall, our capital position remains very strong. In closing, 2025 marked a shift in the individual market dynamics. Oscar has been in the ACA since its inception, and today we are operating from a position of scale and experience. That perspective has informed the actions we've taken to position our business for profitable growth in a rational market and improved financial performance. We are well positioned to return to meaningful profitability this year.
Scott Blackley: To help frame our capital position in the context of our growth outlook, I want to spend a moment on regulatory capital requirements. While individual states vary, a useful rule of thumb is that for every $1 billion of premiums, we are required to hold approximately $50 million of capital, which reflects roughly 55% quota share, reinsurance ceding percentage for 2026. Overall, our capital position remains very strong. In closing, 2025 marked a shift in the individual market dynamics. Oscar has been in the ACA since its inception, and today we are operating from a position of scale and experience. That perspective has informed the actions we've taken to position our business for profitable growth in a rational market and improved financial performance. We are well positioned to return to meaningful profitability this year.
To help frame our capital position in the context of our growth outlook I want to spend a moment on regulatory capital requirements, while individual states very useful rule of thumb is that for every $1 billion of premiums. We are required to hold approximately $50 million of capital, which reflects roughly 55% quota share.
Speaker #4: With that, I'll turn the call back over to Mark for his closing remarks.
Speaker #1: Oscar is stronger than ever. Our decisive actions in 2025 position us to take a significant leap forward on profitability in 2026. We primed Oscar for the market of the future.
<unk> ceding percentage for 2026 overall, our capital position remains very strong.
In closing 2025 marked a shift in the individual market dynamics Oscar has been in the HCA since its inception and today, we are operating from a position of scale and experience that perspective has informed the actions we've taken to position our business for profitable growth in a rational market and improved financial performance we are.
Speaker #1: The team introduced new affordable consumer products, we increased broker distribution with new tools, data, and training, to efficiently move new and existing members to Oscar plans.
Speaker #1: We drove strong retention, showcasing brand loyalty and followership. 2026 is the springboard for Oscar to accelerate financial performance toward our long-term targets. Our playbook drives repeatable value in the market with ongoing product innovation, membership growth.
Well positioned to return to meaningful profitability. This year with that I'll turn the call back over to Mark for his closing remarks.
Scott Blackley: With that, I'll turn the call back over to Mark for his closing remarks.
Scott Blackley: With that, I'll turn the call back over to Mark for his closing remarks.
Oscar is stronger than ever our decisive actions in 2025 position us to take a significantly forward in profitability in 2026, we primed Oscar for the market of the future.
Mark Bertolini: Oscar is stronger than ever. Our decisive actions in 2025 position us to take a significant leap forward on profitability in 2026. We primed Oscar for the market of the future. The team introduced new affordable consumer products. We increased broker distribution with new tools, data, and training to efficiently move new and existing members to Oscar plans. We drove strong retention, showcasing brand loyalty and followership. 2026 is the springboard for Oscar to accelerate financial performance toward our long-term targets. Our playbook drives repeatable value in the market with ongoing product innovation, geographic expansion, and membership growth. We are not here by accident. Our growth is the culmination of years spent navigating the market and obsessing about the consumer experience. We proved consumers vote where they find value.
Mark Bertolini: Oscar is stronger than ever. Our decisive actions in 2025 position us to take a significant leap forward on profitability in 2026. We primed Oscar for the market of the future. The team introduced new affordable consumer products. We increased broker distribution with new tools, data, and training to efficiently move new and existing members to Oscar plans. We drove strong retention, showcasing brand loyalty and followership. 2026 is the springboard for Oscar to accelerate financial performance toward our long-term targets. Our playbook drives repeatable value in the market with ongoing product innovation, geographic expansion, and membership growth. We are not here by accident. Our growth is the culmination of years spent navigating the market and obsessing about the consumer experience. We proved consumers vote where they find value.
Speaker #1: We are not here by accident. Our growth is the culmination of years spent navigating the market and obsessing about the consumer experience. We proved consumers' vote where they find value.
The team introduced new affordable consumer products, we increased broker distribution with new tools data and training to efficiently move new and existing members to Oscar plans, we drove strong retention showcasing brand loyalty and followership.
Speaker #1: Oscar's growth is not just about retaining our book of business; it's about staying ahead of the consumer, driving long-term individual market growth, and setting a new standard for healthcare.
Speaker #1: Now, I will turn the call over to the operator for the Q&A portion of our call.
26, as the springboard for Oscar to accelerated financial performance towards our long term targets, our playbook drives repeatable value in the market with ongoing product innovation geographic expansion and membership growth we are not here by accident.
Speaker #2: At this time, I would like to remind everyone in order to ask a question, press star, then the number one on your telephone keypad.
Speaker #2: Again, we do ask you to limit yourself to one question and one follow-up. And your first question comes from the line of Josh Raskin, with reference research.
Our growth is the culmination of years spent navigating the market, but obsessing about the consumer experience, we proved consumers vote, where they find value Oscars growth is not just about retaining our book of business. It's about staying ahead of the consumer driving long term individual market growth and setting a new standard for health care.
Speaker #3: Hi.
Speaker #3: Good morning. Good morning. Hi.
Speaker #4: I guess the obvious question is, how do you get comfort on this new membership coming in for 2026? And why do you think the MLRs will be down so much?
Mark Bertolini: Oscar's growth is not just about retaining our book of business, it's about staying ahead of the consumer, driving long-term individual market growth, and setting a new standard for healthcare. Now, I will turn the call over to the operator for the Q&A portion of our call.
Mark Bertolini: Oscar's growth is not just about retaining our book of business, it's about staying ahead of the consumer, driving long-term individual market growth, and setting a new standard for healthcare. Now, I will turn the call over to the operator for the Q&A portion of our call.
Speaker #4: And then I guess related to that, maybe Scott, if you could provide a little bit more color on your assumptions around risk adjustment. I heard the 20% accrual, but as you become a larger part of the market, I think you said 30% market share overall.
Now I will turn the call over to the operator for the Q&A portion of our call.
At this time I would like to remind everyone in order to ask a question Press Star then the number one on your telephone keypad again, we do ask you to limit yourself to one question and one follow up.
Operator: At this time, I would like to remind everyone, in order to ask a question, press star, then the number one on your telephone keypad. Again, we do ask you to limit yourself to one question and one follow-up. Your first question comes from the line of Josh Raskin with Neptune Research.
Operator: At this time, I would like to remind everyone, in order to ask a question, press star, then the number one on your telephone keypad. Again, we do ask you to limit yourself to one question and one follow-up. Your first question comes from the line of Josh Raskin with Neptune Research.
Speaker #4: Does that actually help? Does that reduce your overall accruals? So I know there's a bunch in
Speaker #4: there. Yeah.
Speaker #3: Josh, thanks for the question. Can you just restate the second half of your question? I want to make sure I get that
Speaker #3: Josh, thanks for the question. Can you just restate the second half of your question? I want to make sure I get that right. Just more color on the
And your first question comes from the line of Josh Raskin.
Research research.
Speaker #4: assumptions around your risk adjustment in 2026 and my point being, if you're 30% of the market, does that make your risk accruals more market rate, right?
Hi, good morning, good morning.
Josh Raskin: Hi, good morning. I guess the obvious question is how you get comfort on this new membership coming in for 2026, and, you know, why you think the MLRs will be down so much? And then I guess related to that, maybe, Scott, if you could provide a little bit more color on your assumptions around risk adjustment. I heard the 20% accrual, but you know, as you become a larger part of the market, I think you said 30% market share overall, does that actually help? Does that reduce your overall accruals? So I know there's a bunch in there.
Josh Raskin: Hi, good morning. I guess the obvious question is how you get comfort on this new membership coming in for 2026, and, you know, why you think the MLRs will be down so much? And then I guess related to that, maybe, Scott, if you could provide a little bit more color on your assumptions around risk adjustment. I heard the 20% accrual, but you know, as you become a larger part of the market, I think you said 30% market share overall, does that actually help? Does that reduce your overall accruals? So I know there's a bunch in there.
I guess the obvious question is how do you get comfort on this new membership coming in for 2026, and why do you think the MLR will be down so much and then I guess related to that maybe Scott if you could provide a little bit more color on your assumptions around risk adjustment I heard 20% accrual but.
Speaker #4: Meaning, are you going to see less volatility as you become a larger part of the
Speaker #4: market?
Speaker #3: Yep. Understood. All
Speaker #3: right. Well, let's start off with kind of the membership and our ability there. So I would kind of bifurcate the membership between we've got a significant portion of our membership are renewing members.
As you become a larger part of the market I think you said, 30% market share overall does that actually help does that reduce your overall accruals. So I know, there's a bunch in there.
Speaker #3: We have a lot of information about those members, and I feel like we can project what their behaviors are going to look like. And then we also have a population that is new members for Oscar.
Yes, Josh Thanks for the question can you just restate the second half of your question I want to make sure I got that right.
Scott Blackley: Yeah, Josh, thanks for the question. Can you just restate the second half of your question? I wanna make sure I get that right.
Scott Blackley: Yeah, Josh, thanks for the question. Can you just restate the second half of your question? I wanna make sure I get that right.
Josh Raskin: Just more color on the assumptions around your risk adjustment in 2026, and, and my point being, if you're 30% of the market, you know, does that make your risk accruals more market rate, right? Meaning, are you gonna see less volatility as you become a larger part of the market?
Josh Raskin: Just more color on the assumptions around your risk adjustment in 2026, and, and my point being, if you're 30% of the market, you know, does that make your risk accruals more market rate, right? Meaning, are you gonna see less volatility as you become a larger part of the market?
Just more color on the assumptions around your risk adjustment in 2026.
Speaker #3: We obviously picked up share, so we do have a lot of new members. One of the things that we've increasingly done is to leverage third-party data to pull in clinical information about those members that really is giving us a fairly rich amount of information about those members in terms of their historical utilization trends.
My point being if you're 30% of the market.
Does that make your risk across more market rate right, meaning are you going to see less volatility as you become a larger part of the market.
Scott Blackley: Yep, understood. All right. Well, let's start off with kind of the membership and our ability to project what we see there. So I would kind of bifurcate the membership between, you know, we've got a significant portion of our membership are renewing members. We have a lot of information about those members and, you know, feel like we can project what their behaviors are going to look like. And then we also have a population that is, you know, new members for Oscar. We obviously picked up shares, so we do have a lot of new members. One of the things that we've increasingly done is to leverage third-party data to pull in clinical information about those members. That really is giving us a fairly rich amount of information about those members in terms of their, you know, historical utilization trends.
Scott Blackley: Yep, understood. All right. Well, let's start off with kind of the membership and our ability to project what we see there. So I would kind of bifurcate the membership between, you know, we've got a significant portion of our membership are renewing members. We have a lot of information about those members and, you know, feel like we can project what their behaviors are going to look like. And then we also have a population that is, you know, new members for Oscar. We obviously picked up shares, so we do have a lot of new members. One of the things that we've increasingly done is to leverage third-party data to pull in clinical information about those members. That really is giving us a fairly rich amount of information about those members in terms of their, you know, historical utilization trends.
Understood Alright, well, let's start off with kind of the membership.
And.
Our ability to project.
What we see there so I would kind of bifurcate the membership between we've got a significant portion of our membership our renewing members. We have a lot of information about those members and feel like we can project what their behaviors are going to look like.
Speaker #3: It also helps us to target our outreach to help them manage their care journey. So we feel like we've got better insights into this oncoming membership than we've had really at any point in our history.
Speaker #3: So those are kind of the building blocks in terms of why we're comfortable with the MLR projections. On risk adjustment in 2026, I would say that you can see from my talking points that we're actually expecting our risk adjustment as a percentage of direct revenues to increase year over year from 25 to 26 to about 20% in 2026.
And then we also have a population that is new.
New members for Oscar we obviously picked up share. So we do have a lot of new members one of the things that we increasingly done is to leverage third party data to Poland clinical information about those members that really is giving us.
A fairly rich your amount of information about those members in terms of their historical utilization trends. It also helps us to target our outreach to help them manage their care journey. So.
Speaker #3: It's an interesting thing that we're starting to see a little bit of a barbell between the plans who really cater to the highest morbidity populations and the plans that have everyone else.
Scott Blackley: It also helps us to target our outreach to, you know, help them manage their care journey. So, you know, we feel like we've got better insights into this oncoming membership than we've had, you know, really at any point in our history. So, you know, those are kind of the building blocks in terms of, you know, why we're comfortable with the MLR projections. On risk adjustment in 2026, I would say that you can see from my talking points that we're actually expecting our risk adjustment, as a percentage of direct revenues, to increase year-over-year from 25 to 26 to about 20% in 2026.
Scott Blackley: It also helps us to target our outreach to, you know, help them manage their care journey. So, you know, we feel like we've got better insights into this oncoming membership than we've had, you know, really at any point in our history. So, you know, those are kind of the building blocks in terms of, you know, why we're comfortable with the MLR projections. On risk adjustment in 2026, I would say that you can see from my talking points that we're actually expecting our risk adjustment, as a percentage of direct revenues, to increase year-over-year from 25 to 26 to about 20% in 2026.
We feel like we've got better insights into this oncoming membership and we've had really at any point in our history. So those are kind of the building blocks in terms of why we're comfortable with the.
Speaker #3: We're picking up a very large share of young, healthy members and so that's driving risk adjustment higher. We are continuing to look at ways to get more information about what is going on outside of our books because that's the hardest part of forecasting risk adjustment.
The MLR projections.
On risk adjustment in 2006, I would say that.
You can see from my talking points that we're actually expecting our risk adjustment as a percentage of direct revenues to increase.
Speaker #3: We've been engaged with Wakely on helping around this new reporting that they're proposing to bring forward in the first quarter, we're expecting that'll give the entire market more visibility into what's going on with membership.
Year over year from 25% to 26% to about 20% in 2026.
Scott Blackley: It's an interesting thing that, you know, we're starting to see a little bit of a barbell between, you know, the plans who really cater to the highest morbidity populations and the plans that have everyone else. We're picking up, you know, a very large share of young, healthy members, and so that's driving risk adjustment higher. You know, we are continuing to look at ways to get more information about what is going on outside of our books, 'cause that's the hardest part of forecasting risk adjustment. You know, we've been engaged with Wakely on helping around this new reporting that they're, you know, proposing to bring forward in the first quarter. We're expecting that'll give the entire market more visibility into what's going on with membership. That should help all of us in forecasting risk adjustment.
Scott Blackley: It's an interesting thing that, you know, we're starting to see a little bit of a barbell between, you know, the plans who really cater to the highest morbidity populations and the plans that have everyone else. We're picking up, you know, a very large share of young, healthy members, and so that's driving risk adjustment higher. You know, we are continuing to look at ways to get more information about what is going on outside of our books, 'cause that's the hardest part of forecasting risk adjustment. You know, we've been engaged with Wakely on helping around this new reporting that they're, you know, proposing to bring forward in the first quarter. We're expecting that'll give the entire market more visibility into what's going on with membership. That should help all of us in forecasting risk adjustment.
It's an interesting thing that we're starting to see a little bit of a barbell between the plans, who really cater to the highest morbidity populations and the plans that have everyone else. We are picking up a very large share of.
Speaker #3: That should help all of us in forecasting risk adjustment. And so I don't know that it's going to decrease the challenges in making that estimate as accurate as it can be, but it certainly will give us a head start.
<unk> healthy members and so that's driving risk adjustment higher.
Speaker #3: All right. Perfect. Thanks.
We are continuing to look at ways to get more information about what is going on outside of our books because thats the hardest part of forecasting risk adjustment.
Speaker #2: Your next question comes from Jessica Tassan with Piper Sandler. Please go ahead.
Speaker #5: Hi. Thanks for taking the question. So I appreciate the color on membership. Can you elaborate maybe a little on the fourth quarter utilization pull forward you described?
We've been engaged with wakely on helping around this new reporting that there.
Speaker #5: You guys spoke about higher retention, so should we think about the pull forward as being kind of silver members in '25 who are disinclined to utilize care in '26 due to higher deductibles?
And to bring forward in the first quarter, we're expecting that will give the entire market more visibility into what's going on with membership that should help all of us in forecasting the risk adjustment.
Speaker #5: Just any color on 4Q utilization and how it relates to your 2026 utilization expectations?
Scott Blackley: And so, you know, I don't know that it's gonna decrease the challenges in making that estimate as accurate as it can be, but it certainly will give us a head start.
Scott Blackley: And so, you know, I don't know that it's gonna decrease the challenges in making that estimate as accurate as it can be, but it certainly will give us a head start.
And so.
I don't know that it's going to decrease the challenges in making that estimate.
Speaker #3: Yep. Thanks for the question, Jess. Good morning. So I want to emphasize utilization was modestly higher than our expectation in the quarter. Really, when I look at the MLR performance in the quarter, I really would say that it is vastly driven by the risk adjustment true-up.
Accurate as it can be but it certainly will give us a head start.
Alright perfect. Thanks.
Josh Raskin: All right, perfect. Thanks.
Josh Raskin: All right, perfect. Thanks.
Yeah.
Your next question comes from Jessica <unk> with Piper Sandler. Please go ahead.
Operator: Your next question comes from Jessica Tassan with Piper Sandler. Please go ahead.
Operator: Your next question comes from Jessica Tassan with Piper Sandler. Please go ahead.
Hi, Thanks for taking my question. So I appreciate the color on membership can you elaborate maybe a little on the fourth quarter utilization Pulsar do you described.
Jessica Tassan: Hi, thanks for taking the question. So I appreciate the color on membership. Can you elaborate maybe a little on the Q4 utilization pull forward you described? You guys spoke about higher retention, so should we think about the pull forward as being kind of Silver members in 2025, who are disinclined to utilize care in 2026, due to higher deductibles? Just any color on Q4 utilization and how it relates to your 2026 utilization expectations.
Jessica Tassan: Hi, thanks for taking the question. So I appreciate the color on membership. Can you elaborate maybe a little on the Q4 utilization pull forward you described? You guys spoke about higher retention, so should we think about the pull forward as being kind of Silver members in 2025, who are disinclined to utilize care in 2026, due to higher deductibles? Just any color on Q4 utilization and how it relates to your 2026 utilization expectations.
Speaker #3: In terms of the utilization pressure, we did see we had a modest expectation of an increase as we went into the end of the year.
You guys spoke about higher retention. So should we think about the pull forward as being kind of silver members and 25, who are disinclined to utilize care in 'twenty six.
Speaker #3: Members losing their subsidies likely to go ahead and seek care. We saw that. We think that was primary driver of some of the movement we saw in outpatient and professional.
Higher deductibles, just any color on four key utilization and how it relates to your 2026.
<unk> expectations.
Speaker #3: We also saw things like substance abuse disorder that ticked up, some mental health benefits that ticked up, and labs types of things. So really, things that would indicate to us these were members that were just trying to make sure that they took advantage of the benefits while they had them.
Scott Blackley: Yep. Thanks for the question, Jess. Good morning. So I want to emphasize, utilization was modestly higher than our expectation in the quarter. Really, when I look at the MLR performance in the quarter, I really would say that it is vastly driven by the risk adjustment true up. You know, in terms of the utilization pressure, we did see. You know, we had a modest expectation of an increase, as we went into the end of the year, members losing their subsidies, likely to go ahead and seek care. We saw that. We think that was, you know, primary driver of some of the movement we saw in outpatient and professional. You know, we also saw things like substance abuse disorder that ticked up, you know, some mental health benefits that ticked up and, you know, labs, types of things.
Scott Blackley: Yep. Thanks for the question, Jess. Good morning. So I want to emphasize, utilization was modestly higher than our expectation in the quarter. Really, when I look at the MLR performance in the quarter, I really would say that it is vastly driven by the risk adjustment true up. You know, in terms of the utilization pressure, we did see. You know, we had a modest expectation of an increase, as we went into the end of the year, members losing their subsidies, likely to go ahead and seek care. We saw that. We think that was, you know, primary driver of some of the movement we saw in outpatient and professional. You know, we also saw things like substance abuse disorder that ticked up, you know, some mental health benefits that ticked up and, you know, labs, types of things.
Yes, thanks for the question, Jeff Good morning.
So I want to emphasize utilization was modestly higher than our expectation in the quarter really when I look at the MLR performance in the quarter.
Would say that it is vastly driven by the risk adjustment true up in <unk>.
Speaker #3: Don't give us a lot of concern about carry forward impact of those types of activities.
Terms of the utilization pressure, we did see we had a modest expectation of an increase as we went into the end of the year members, losing their subsidies likely to.
Speaker #5: Got it. And then just I know you all mentioned that overall market-wide membership could come in a little bit better than the 20 to 30 percent disenrollment you had been forecasting last year.
Go ahead and seek care, we saw that we think that was primary driver of some of the movement, we saw in outpatient and professional.
Speaker #5: Can you just maybe offer any color on the overall size of the market post-effectuation and then secondarily just any comments on kind of the adequacy of pricing market-wide?
We also saw things like substance abuse disorder that ticked up.
Some mental health benefits that ticked up and labs.
Speaker #5: So how should we get comfortable with the fact that all of the peers have been also priced appropriately and that risk adjustment doesn't end up being a problem in '26 the same way it was in '25?
The types of things, so really things that would indicate to us. These were members that were just trying to make sure that they took advantage of the benefits why they have them.
Scott Blackley: So really, things that would indicate to us these were members that were just trying to make sure that they took advantage of the benefits, why they have them, don't give us a lot of concern about carry forward impact of those types of activities.
Scott Blackley: So really, things that would indicate to us these were members that were just trying to make sure that they took advantage of the benefits, why they have them, don't give us a lot of concern about carry forward impact of those types of activities.
Speaker #5: Thank
Speaker #5: you. Thank you, Jessica.
Don't give us a lot of concern about carryforward impact of those types of activities.
Speaker #6: From the standpoint of effectuation versus actual enrollment, we believe that the market currently has shrunk by 5%. However, a lot of people have changed their plan designs, and it was purposeful on our part to give brokers specific transitions that they could do for their members to impact the loss of enhanced premium tax credits.
Got it and then just I know you all mentioned that overall market wide membership could come in a little bit better than the 20% to 30% this enrollment.
Jessica Tassan: Got it. And then just, I know you, you all mentioned that overall market-wide membership could come in a little bit better than the 20 to 30% disenrollment you were- you had been forecasting last year. Can you just maybe offer any color on the overall size of the market, post effectuation? And then secondarily, just, any comments on, on kind of the adequacy of pricing market-wide. So how should we get comfortable with the fact that, you know, all of the peers have been, also priced appropriately, and that risk adjustment doesn't end up being a problem in 2026, same way it was in 2025? Thank you.
Jessica Tassan: Got it. And then just, I know you, you all mentioned that overall market-wide membership could come in a little bit better than the 20 to 30% disenrollment you were- you had been forecasting last year. Can you just maybe offer any color on the overall size of the market, post effectuation? And then secondarily, just, any comments on, on kind of the adequacy of pricing market-wide. So how should we get comfortable with the fact that, you know, all of the peers have been, also priced appropriately, and that risk adjustment doesn't end up being a problem in 2026, same way it was in 2025? Thank you.
And forecasting last year can you just maybe offer any color on the overall size of the market.
This actuation and then secondarily just add any.
Any comment on kind of the adequacy of pricing market wide. So how should we get comfortable with the fact that all of the peers have been and also priced appropriately and that risk. It doesn't end up being a problem in 2016 and 25. Thank you.
Speaker #6: And so as a result, in our book, we saw silver drop in half as a percentage. Of what it by almost 50% and gold almost quadruple.
Thank you Jessica from the standpoint of.
Scott Blackley: Thank you, Jessica. From the standpoint of effectuation versus actual enrollment, we believe that the market currently has shrunk by 5%. However, a lot of people have changed their plan designs, and it was purposeful on our part to give brokers specific transitions that they could do for their members to impact the loss of enhanced premium tax credits. And so as a result, in our book, we saw silver drop in half as a percentage of what it was before, and bronze increased by almost 50%, and gold almost quadruple. And that's the kind of shift we saw in our membership mix. That means people are carrying higher deductible health plans.
Mark Bertolini: Thank you, Jessica. From the standpoint of effectuation versus actual enrollment, we believe that the market currently has shrunk by 5%. However, a lot of people have changed their plan designs, and it was purposeful on our part to give brokers specific transitions that they could do for their members to impact the loss of enhanced premium tax credits. And so as a result, in our book, we saw silver drop in half as a percentage of what it was before, and bronze increased by almost 50%, and gold almost quadruple. And that's the kind of shift we saw in our membership mix. That means people are carrying higher deductible health plans.
Speaker #6: And that's the kind of shift we saw in our membership mix. That means people are carrying higher deductible plans. And this is the big open question mark for the rest of the year.
Of actuation versus actual enrollment.
We believe that the market grew the market currently has shrunk by 5%.
Speaker #6: Two things. One, when we get closer to paids and our paids are on par with where they've been the last couple of years anyway, the next question is how many people, when they see their premium, actually pay it.
However, a lot of people have changed their plan designs and it was purposeful on our part to give brokers specific transitions that they could do for their members.
Speaker #6: And that's the first piece that will get us to the end of the year, and that's where we go from 3.4 million lives, as we currently stand in February, to 3 million lives by the time April 1st rolls around.
Impact the loss of enhanced premium tax credits and so as a result in our book, we saw silver drop in half as a percentage of.
What it was before and brands increased by almost 50% and in gold almost quadruple.
Speaker #6: The next big question is, I think this is as big a political issue as any other thing around premium enhanced premium tax credits, is as people start to use their plans and realize the amount of out-of-pocket that they need to pay to use those plans, will they maintain coverage or will they drop out?
And thats the kind of shift we saw in our membership mix that means people are carrying higher deductible health plans and this is the big open question Mark for the rest of the year two things one when we get closer to page on our bids are on par with where they've been the last couple of years anyway. The next question is how many people when they see there.
Mark Bertolini: ... And this is the big open question mark for the rest of the year. Two things: One, when we get closer to pays, and our pays are on par with where they've been the last couple of years anyway, the next question is, how many people, when they see their premium, actually pay it? And that's the first piece that will get us to the end of the year, and that's where we go from 3.4 million lives, as we currently stand in February, to 3 million lives by the time 1 April rolls around.
Mark Bertolini: ... And this is the big open question mark for the rest of the year. Two things: One, when we get closer to pays, and our pays are on par with where they've been the last couple of years anyway, the next question is, how many people, when they see their premium, actually pay it? And that's the first piece that will get us to the end of the year, and that's where we go from 3.4 million lives, as we currently stand in February, to 3 million lives by the time 1 April rolls around.
Speaker #6: And this is where the big passive enrollment, you don't know how they're going to behave until they start using the plans, it's going to create a lot of financial hardship for most Americans who only have $400 in their bank account.
Their premium actually Pat.
And Thats, the first piece that will get us to the.
End of the year, and that's where we go from $3 4 million lives as we currently stand in February the 3 million lives by the time April 1st roles around the.
Speaker #6: And this is where we have an open question, and we think by the end of the year that that number drops to the lower end of our range, which was 20% to 30% reduction of the overall market
Mark Bertolini: The next big question is, I think this is as big a political issue as any other thing around in premium, enhanced premium tax credits, as people start to use their plans and realize the amount of out-of-pocket that they need to pay to use those plans, will they maintain coverage or will they drop out? And this is where the big passive enrollment, you don't know how they're gonna behave until they start using the plans. It's gonna create a lot of financial hardship for most Americans who only have $400 in their bank account. And this is where we have an open question, and we think by the end of the year, that that number drops to the lower end of our range, which was 20% to 30% reduction of the overall market size.
Mark Bertolini: The next big question is, I think this is as big a political issue as any other thing around in premium, enhanced premium tax credits, as people start to use their plans and realize the amount of out-of-pocket that they need to pay to use those plans, will they maintain coverage or will they drop out? And this is where the big passive enrollment, you don't know how they're gonna behave until they start using the plans. It's gonna create a lot of financial hardship for most Americans who only have $400 in their bank account. And this is where we have an open question, and we think by the end of the year, that that number drops to the lower end of our range, which was 20% to 30% reduction of the overall market size.
The next big question is when.
This is as big a political issue does any other thing around and premium enhanced premium tax credits is as people start to use their plans and realize the amount of out of pocket that they need to pay to use those plans will.
Speaker #6: size. Your next question comes
Speaker #2: through Andrew Mok with Barclays. Please go ahead.
Will they maintain coverage or will they drop out.
Speaker #7: Hi. This is Tiffany Ranon for Andrew. Can you share where OEP membership landed for the book and give us a sense of where paid rates are tracking in January '26 versus January
And this is where the big passive enrollment you don't know how theyre going to behave until they start using the plans it's going to create a lot of financial hardship for most Americans rolling a $400 in their bank.
Speaker #7: 2025? Our OEP ended with
And this is where we have an open question and we think by the end of the year that that number drops to the lower end of our range, which was 20 through 20% to 20% to 30% reduction of the overall market size.
Speaker #6: 3.4 million lives. Enrolled. We have not seen all the paids yet, but our current paids are sitting close to where they were last year.
Speaker #6: And a little lower than they were in '23 and '24. On the Oscar
Okay.
Your next question comes through Andrew Mok with Barclays. Please go ahead.
Operator: Your next question comes through Andrew Mok with Barclays. Please go ahead.
Operator: Your next question comes through Andrew Mok with Barclays. Please go ahead.
Speaker #6: book.
Speaker #3: And as a reminder, we expect
Speaker #3: that as of the end of the first quarter, we'll have 3 million paid members that's what our expectation is for that time
Hi, This is Stephanie on for Andrew can you share where OAP membership landed for the book and give US a sense of where paid rates are tracking in January 'twenty six versus January 2025.
Andrew Mok: Hi, this is Tiffany Lan on for Andrew. Can you share where OAP membership landed for the book and give us a sense of where paid rates are tracking in January 2026 versus January 2025?
Tiffany Mau: Hi, this is Tiffany Lan on for Andrew. Can you share where OAP membership landed for the book and give us a sense of where paid rates are tracking in January 2026 versus January 2025?
Speaker #3: period. Okay.
Speaker #2: Got it. That's helpful. Can you provide a bit more color around expected membership cadence following the 1Q grace period and how we should think about that throughout the year?
Mark Bertolini: Our OEP ended with 3.4 million lives enrolled. We have not seen all the data yet, but our current pace is sitting close to where they were last year. You know, a little lower than they were in 2023 and 2024 on the Oscar book.
Our OUP ended with $3 4 million lives.
Mark Bertolini: Our OEP ended with 3.4 million lives enrolled. We have not seen all the data yet, but our current pace is sitting close to where they were last year. You know, a little lower than they were in 2023 and 2024 on the Oscar book.
<unk> enrolled.
Speaker #3: Sure. So in terms of churn expectations, through the first quarter, we're obviously going to see higher churn as we see the effects of the higher payment rates or premiums that Mark just talked about.
We have not seen all the page up but our current page are sitting close to where they were last year.
And.
And.
A little lower than they were in 'twenty three 'twenty four.
Oscar book.
Scott Blackley: As a reminder, we expect that, as of the end of Q1, we'll have 3 million paid members. That's what our expectation is for that time period.
Speaker #3: And so we'll see a dip from 3.4 down to 3 million by our estimate by the end of the first quarter. From there, we're expecting churn patterns to look more similar to what we saw pre-ARPA.
Scott Blackley: As a reminder, we expect that, as of the end of Q1, we'll have 3 million paid members. That's what our expectation is for that time period.
And as a reminder, we expect that.
As of the end of the first quarter, we will have 3 million paid members.
That's what our expectation is for.
For that time period.
Okay got it that's helpful. Can you can you provide a bit more color around expected membership cadence following the <unk> Grace period, and how we should think about that throughout the year.
Andrew Mok: Okay, got it. That's helpful. Can you, can you provide a bit more color around expected membership cadence following the Q1 grace period, and how we should think about that throughout the year?
Tiffany Mau: Okay, got it. That's helpful. Can you, can you provide a bit more color around expected membership cadence following the Q1 grace period, and how we should think about that throughout the year?
Speaker #3: So in the range of 1 to 2 percent a month in terms of kind of churn from the end of the first quarter through the end of the year.
Speaker #3: The other thing I just point out is the other factor impacting the churn rates is that we are expecting to see less SEP membership this year than what we've seen in recent years, as some of the things like the continuous enrollment for people below the FPL 150 level now that that's expired.
Scott Blackley: Sure. So in terms of, churn expectations, you know, through the first quarter, we're obviously going to see higher churn, as we see the effects of the higher payment rates, you know, or premiums that Mark just talked about. And so we'll see, you know, a dip from 3.4 down to 3 million by our estimate, by the end of the first quarter. From there, we're expecting churn patterns to look more, similar to what we saw pre-ARPA, so in the range of 1% to 2% a month, in terms of, you know, kind of churn from, the end of the first quarter through the end of the year.
Scott Blackley: Sure. So in terms of, churn expectations, you know, through the first quarter, we're obviously going to see higher churn, as we see the effects of the higher payment rates, you know, or premiums that Mark just talked about. And so we'll see, you know, a dip from 3.4 down to 3 million by our estimate, by the end of the first quarter. From there, we're expecting churn patterns to look more, similar to what we saw pre-ARPA, so in the range of 1% to 2% a month, in terms of, you know, kind of churn from, the end of the first quarter through the end of the year.
Sure so in terms of.
Churn expectations.
Through the first quarter, we're obviously going to see higher churn.
As as we see the effects of the higher payment rates.
Our premiums that Mark just talked about.
So we'll see.
A dip from three four down to $3 million by our estimate by the end of the first quarter from there we're expecting churn patterns to look more.
Speaker #3: We would expect to see less of that membership. So while in recent years, we've seen our overall membership trending up throughout the year, we would expect this year to kind of revert to more pre-ARPA trajectories where you see membership decrease throughout the year.
Similar to what we saw pre ARPA, so within the range of 1% to 2% a month in terms of kind of churn from the end of the first quarter through the end of the year.
Speaker #2: Thank you. Your next question comes from the line of Jonathan Young with UBS. Please go
The other thing I'd just point out is the other factor impacting the churn rates is that we are expecting to see less SCP membership this year than what we've seen in recent years as some of the things like the continuous enrollment forward.
Scott Blackley: The other thing I'd just point out is, the other factor impacting the, you know, the churn rates, is that we are expecting to see less SEP membership this year than what we've seen in recent years. As, you know, some of the things like the continuous enrollment for, you know, people below, you know, the FPL 150 level, now that that's expired, we would expect to see less of that membership. So while in recent years, we've seen our overall membership trending up throughout the year, we would expect this year to kind of revert to more pre-ARPA, you know, trajectories, where you see membership decrease throughout the year.
Scott Blackley: The other thing I'd just point out is, the other factor impacting the, you know, the churn rates, is that we are expecting to see less SEP membership this year than what we've seen in recent years. As, you know, some of the things like the continuous enrollment for, you know, people below, you know, the FPL 150 level, now that that's expired, we would expect to see less of that membership. So while in recent years, we've seen our overall membership trending up throughout the year, we would expect this year to kind of revert to more pre-ARPA, you know, trajectories, where you see membership decrease throughout the year.
Speaker #2: ahead. Hi.
Speaker #8: Thanks for taking a question. Can you just talk about your mix of metal tiers? It sounds like bronze and gold went up significantly and silver went down.
People below.
Speaker #8: And I assume you're skewing a little bit more towards bronze, which typically has had more variability. How would you characterize your historical experience with bronze and how you're thinking about this time
The pier $1 50 level now that Thats expired, we would expect to see less of that that membership so well in recent years, we've seen our overall membership trending up throughout the year. We would expect this year to kind of revert to more pre ARPA.
Speaker #8: around? Yeah.
Speaker #3: I would say it's going to be interesting everything that you might think about metals we should probably discard because we've seen a transition from people who've historically been in silver to other metal mixes.
No.
Trajectories, where you see membership decreased throughout the year.
Thank you.
Andrew Mok: Thank you.
Tiffany Mau: Thank you.
Your next question comes from the line of Jonathan Young with UBS. Please go ahead.
Operator: Your next question comes from the line of Jonathan Yong with UBS. Please go ahead.
Operator: Your next question comes from the line of Jonathan Yong with UBS. Please go ahead.
Speaker #3: So I don't think you're going to be able to really proxy history. Bronze in general for us has always been a high-performing product. So the fact that we've seen more growth in bronze than in silver and we've seen that transition is actually something that we're completely comfortable with.
Hey, Thanks for taking my question can you just talk about your mix of metal tiers. It sounds like bronze Ingalls went up significantly in silver went down and I assume you're skewing a little bit more towards bonds, which typically has had more variability how would you characterize your historical experience with bonds and how youre thinking about this time around.
Jonathan Yong: Hey, thanks for taking the question. Can you just talk about your mix of metal tiers? It sounds like Bronze and Gold went up significantly, and Silver went down, and I assume you're skewing a little bit more towards Bronze, which typically has had more variability. How would you characterize your historical experience with Bronze, and how you're thinking about this time around?
Jonathan Yong: Hey, thanks for taking the question. Can you just talk about your mix of metal tiers? It sounds like Bronze and Gold went up significantly, and Silver went down, and I assume you're skewing a little bit more towards Bronze, which typically has had more variability. How would you characterize your historical experience with Bronze, and how you're thinking about this time around?
Yes, I would say.
Scott Blackley: Yeah, I would say, you know, it's gonna be interesting. Everything that you might think about metals, we should probably discard, because we've seen a transition from people who've historically been in silver to other metal mixes. So I don't think you're gonna be able to, you know, really proxy history. Bronze in general, you know, for us, has always been a high-performing product. So the fact that we've seen more growth in bronze, you know, than in silver, and we've seen that transition, is actually, you know, something that we are completely comfortable with. If I just kind of pull up for a second and talk about the metals. Overall, our general philosophy is that our plans need to have margins that are a relatively, relatively tight band.
Scott Blackley: Yeah, I would say, you know, it's gonna be interesting. Everything that you might think about metals, we should probably discard, because we've seen a transition from people who've historically been in silver to other metal mixes. So I don't think you're gonna be able to, you know, really proxy history. Bronze in general, you know, for us, has always been a high-performing product. So the fact that we've seen more growth in bronze, you know, than in silver, and we've seen that transition, is actually, you know, something that we are completely comfortable with. If I just kind of pull up for a second and talk about the metals. Overall, our general philosophy is that our plans need to have margins that are a relatively, relatively tight band.
Speaker #3: If I just kind of pull up for a second, talk about the metals. Overall, our general philosophy is that our plans need to have margins that are in a relatively tight band.
It's going to be interesting everything that you might think about metals, we should probably discard because we've seen a transition from people who have historically been in silver two other metal mixes. So I don't think youre going to be able to.
Speaker #3: We would expect that all of them generate strong contribution towards total company profitability. I do think that with the momentum with the movement from silver to bronze and gold, we will see those plans look and act actually more similar to each other.
Really proxy history.
<unk> in general for US has always been.
Our high performing.
Product so.
The fact that we've seen more growth in bronze.
Speaker #3: Obviously, bronze has higher deductibles, so we may see a bit higher churn in that population than we may see in other populations that don't have those higher deductibles as Mark talked about.
Then in silver and we've seen that transition is actually something that were.
We are completely comfortable with if I, just kind of pull up for a second talk about the metals overall, our general philosophy is that our plants need to have.
Speaker #3: We think that may be a driver over time of more
Speaker #3: churn. Great.
Speaker #8: And then just going back to the membership gains, if I think of that 400,000 that's going to roll off by 2Q, I assume those are the passive renewals.
Margins that are in a relatively relatively tight band, we would expect that all of them generate strong contribution towards total company profitability.
Scott Blackley: We would expect that all of them generate, you know, strong contribution towards total company profitability. You know, I do think that with the momentum, with the movement from Silver to Bronze and Gold, we will see those plans look and act actually more similar to each other. Obviously, Bronze has higher deductibles, so we may see, you know, a bit higher churn in that population than we may see in other populations that don't have those higher deductibles. As Mark talked about, we think that may be a driver over time of more churn.
Scott Blackley: We would expect that all of them generate, you know, strong contribution towards total company profitability. You know, I do think that with the momentum, with the movement from Silver to Bronze and Gold, we will see those plans look and act actually more similar to each other. Obviously, Bronze has higher deductibles, so we may see, you know, a bit higher churn in that population than we may see in other populations that don't have those higher deductibles. As Mark talked about, we think that may be a driver over time of more churn.
Speaker #8: So that would imply a little less than half your membership is, quote-unquote, "new." I guess, are those new members coming in from new markets that you entered into?
I do think that with the momentum with the movement from silver to bronze and gold.
Speaker #8: And I know you have data you're using third-party data to get a better sense of the members. But I guess, how much has things changed from last year to what it may look like this year where maybe that third-party data may not be as accurate?
We will see those plans look and act actually more similar to each other obviously broad test higher deductibles. So we may see a bit higher churn in that population. Then we may see in other populations that don't have those higher deductibles as mark talked about we think that may be a driver.
Speaker #8: Thanks.
Over time have more churn.
Speaker #6: I'll let Scott talk about the third-party data, but let me just sort of dimension this for you. Your calculation is pretty close. That 400,000 is going to be passive.
Great and then just going back to the membership gains if I.
Jonathan Yong: Great. And then, just going back to the membership gains. If I think of that 400,000 that's going to roll off by Q2, I assume those are the passive renewals, so that would imply a little less than half your membership is, quote, unquote, "new." I guess, are those new members coming in from new markets that you entered into? And I know you have data, you're using third-party data to get a better sense of the members. But I guess, how much has things changed, you know, from last year to what it may look like this year, where maybe that third-party data may not be as accurate? Thanks.
Jonathan Yong: Great. And then, just going back to the membership gains. If I think of that 400,000 that's going to roll off by Q2, I assume those are the passive renewals, so that would imply a little less than half your membership is, quote, unquote, "new." I guess, are those new members coming in from new markets that you entered into? And I know you have data, you're using third-party data to get a better sense of the members. But I guess, how much has things changed, you know, from last year to what it may look like this year, where maybe that third-party data may not be as accurate? Thanks.
Think of that 400000, and thats going to roll off by <unk> I assume those are the passive renewals.
Speaker #6: That will roll off. We have grown a bit. And what we did early in the summer is we went out and enrolled 11,000 new brokers.
That would imply a little less than half. Your membership is quote unquote, new I guess are those new members coming in from new markets that you've entered into and I know you have data youre using third party data to get a better sense of the numbers.
Speaker #6: We met with 17,000 brokers over the summer. And gave them lists of members that they had with us. And showed them the members that were most affected by the lack of enhanced premium tax credit.
I guess, how much as things change.
From last year to what it may look like this year, where maybe that third party data may not be as accurate.
Speaker #6: And what plans you could move them to based on their needs. They went and did that. And we gave them access through our broker portal to our campaign builder software, which we used outreach to members, to reach those people and give them the information before open enrollment.
Mark Bertolini: I'll let Scott talk about the third-party data, but let me just sort of dimension this for you. Your, your calculation is pretty close. That 400,000 is gonna be passive, that will roll off. We have grown a bit, and what we did early in the summer is we went out and enrolled 11,000 new brokers. We met with 17,000 brokers over the summer and gave them lists of members that they had with us, and showed them the members that were most affected by the lack of enhanced premium tax credit, and what plans you could move them to based on their, their, their needs.
I'll, let Scott talk about the third party data, but let me just sort of dimension, that's where your calculation is pretty close.
Mark Bertolini: I'll let Scott talk about the third-party data, but let me just sort of dimension this for you. Your, your calculation is pretty close. That 400,000 is gonna be passive, that will roll off. We have grown a bit, and what we did early in the summer is we went out and enrolled 11,000 new brokers. We met with 17,000 brokers over the summer and gave them lists of members that they had with us, and showed them the members that were most affected by the lack of enhanced premium tax credit, and what plans you could move them to based on their, their, their needs.
400000 is going to be passed.
That will roll off we have grown a bit and what we did early in the summer as we went out and enrolled 11000 new brokers.
Speaker #6: And that's why we got off to a fairly significant start early on because the brokers had it all stacked up, ready to go. Our view was the more we can help the brokers get people to the right place, the more they can be productive elsewhere.
We met with 17000 brokers over the summer and gave them lists of members that they have with us.
Speaker #6: Which is then what happened. Is that they went to other plans who either were leaving the market or had not prepared the broker community or the membership with the right kind of product changes and moved those members as well.
And showed them. The members that were most affected by the lack of enhanced premium tax credit and what plans you could move them to based on their needs.
Speaker #6: So that's sort of the lay of the land on how our growth occurred. We weren't sure how it was going to roll out for new membership, but it obviously had a significant
Mark Bertolini: They went and did that, and we gave them access through our broker portal to our Campaign Builder software, which we used to outreach to members to reach those people and give them the information before open enrollment. And that's why we got off to a fairly significant start early on, because the brokers had it all stacked up, ready to go. Our view was, the more we can help the brokers get people to the right place, the more they can be productive elsewhere. Which is then what happened, is that they went to other plans who either were leaving the market or had not prepared the broker community, or the membership with the right kind of product changes and moved those members as well. So that's sort of the lay of the land on how our growth occurred.
They went and did that and we gave them access through our broker portal to our campaign builder software, which we used outreach to members to reach those people and give them. The information before open enrollment and Thats why we got off to a fairly significant start early on because the brokers had it all stacked up ready to go our view was the more we can help the broke.
Mark Bertolini: They went and did that, and we gave them access through our broker portal to our Campaign Builder software, which we used to outreach to members to reach those people and give them the information before open enrollment. And that's why we got off to a fairly significant start early on, because the brokers had it all stacked up, ready to go. Our view was, the more we can help the brokers get people to the right place, the more they can be productive elsewhere. Which is then what happened, is that they went to other plans who either were leaving the market or had not prepared the broker community, or the membership with the right kind of product changes and moved those members as well. So that's sort of the lay of the land on how our growth occurred.
Speaker #6: impact. Yeah.
Speaker #3: And Jonathan, with respect to the third-party data, I would say that for new initiations, most of those people we've got clinical information from third parties that gives us a good basis to have an expectation of how they're going to perform and importantly, it gives us a lot of information about who we need to start to engage to help them manage their healthcare conditions.
Crews get people to the right place the more they can be productive elsewhere, which is then what happened is that they went to other plans who either were leaving the market or had not prepared the broker community or the membership with the right kind of product changes and move those members as well.
So that's sort of the lay of the land on how our growth occurred we werent sure. How it was going to rollout for new membership, but it obviously had a significant impact.
Speaker #3: That's important both from the perspective of managing our costs as well as getting the member in as early as we can, which is a positive thing for risk adjustment as well.
Mark Bertolini: We weren't sure how it was gonna roll out for new membership, but it obviously had a significant impact.
Mark Bertolini: We weren't sure how it was gonna roll out for new membership, but it obviously had a significant impact.
Yes, Jonathan with respect to the third party data I would say that.
Scott Blackley: Yeah, and Jonathan, with respect to the third-party data, I would say that, you know, it for new initiations, most of those people, we've got clinical information from third parties that gives us, you know, a, a good basis to have a, an expectation how they're going to perform. And, you know, importantly, it gives us, you know, a lot of information about who we need to start to engage to help them manage their healthcare conditions. That's important both from the perspective of managing our costs as well as, you know, getting the member in as early as we can, which is a positive thing for risk adjustment as well.
Scott Blackley: Yeah, and Jonathan, with respect to the third-party data, I would say that, you know, it for new initiations, most of those people, we've got clinical information from third parties that gives us, you know, a, a good basis to have a, an expectation how they're going to perform. And, you know, importantly, it gives us, you know, a lot of information about who we need to start to engage to help them manage their healthcare conditions. That's important both from the perspective of managing our costs as well as, you know, getting the member in as early as we can, which is a positive thing for risk adjustment as well.
Speaker #3: There are a portion of our new initiations who are new to the market who we don't have great information about, but we do have a significant amount of data over time as to what those types of people might look like in terms of their acuity and we've in looking at kind of the information that we do have about those members, we're not seeing anything in terms of the characteristics of them, the causes us to think that there's something there that should be concerning for us.
Yeah.
Four new initiations.
Most of those people, we've got clinical information from third parties that gives us.
Good.
Basis to have an expectation how theyre going to perform and importantly, it gives us a lot of information about who we need to start to engage to help them manage their healthcare conditions. That's.
And that's important both from the perspective of managing our costs as well as getting the member in his release, we can which is a positive thing for risk adjustment as well.
Speaker #2: Your next question comes from the line of John Ransom with Raymond James. Please go ahead.
Speaker #9: Hey, good morning. So if we take 3 million as kind of the, quote-unquote, "real member number," approximately what percent of those do you think work with a broker and try to tailor the coverage versus the remaining passive renewals?
Scott Blackley: You know, there are a portion of our new initiations who are new to the market, who we don't, you know, have great information about, but we do have a significant amount of data over time as to what those types of people might look, you know, look like in terms of their acuity. And, you know, we've in looking at kind of the information that we do have about those members, we're not seeing anything in terms of the characteristics of them that causes us, you know, to think that there's something there that should be concerning for us.
Scott Blackley: You know, there are a portion of our new initiations who are new to the market, who we don't, you know, have great information about, but we do have a significant amount of data over time as to what those types of people might look, you know, look like in terms of their acuity. And, you know, we've in looking at kind of the information that we do have about those members, we're not seeing anything in terms of the characteristics of them that causes us, you know, to think that there's something there that should be concerning for us.
<unk>.
A portion of our new initiations, who are new to the market, who we don't have great information about but we do have a significant amount of data over time as to what those types of people might look like in terms of their acuity.
Speaker #9: I think that'd be helpful.
Speaker #9: Thanks. We generally see 90,
And looking at kind of the information that we do have about those members were not seeing anything in terms of the characteristics of them that causes us.
Speaker #6: 95 percent of our members come through the brokers, although in some of our custom plans, like HelloMenno, we saw a lot of direct enrollment.
Speaker #6: Significant direct enrollment. People specifically wanting that product and came directly through us through the exchanges. So but generally, and we're looking at 90, 95 percent.
Think that theres, something there that that should be concerning for us.
Your next question comes from the line of John Ransom with Raymond James. Please go ahead.
Operator: Your next question comes from the line of John Ransom with Raymond James. Please go ahead.
Operator: Your next question comes from the line of John Ransom with Raymond James. Please go ahead.
Speaker #9: And then I mean, this is kind of a basic question. So you all can downgrade your opinion of my IQ, but what I don't understand is I get the passive enrollment, but you've got to pay the first premium before you get covered.
Hey, good morning.
John Ransom: Hey, good morning. So if we take 3 million as kind of the quote-unquote, "real member number," approximately what percent of those do you think work with a broker and, you know, try to tailor the coverage versus the remaining passive renewals? I think that'd be helpful. Thanks.
John Ransom: Hey, good morning. So if we take 3 million as kind of the quote-unquote, "real member number," approximately what percent of those do you think work with a broker and, you know, try to tailor the coverage versus the remaining passive renewals? I think that'd be helpful. Thanks.
So if we if we say $3 million is kind of the quote unquote real member number.
Approximately what percent of those do you think work with a broker and trying to tailor the coverage versus the remaining passive renewals.
Speaker #9: So what kind of member gets passively renewed pays the first premium and then decides to drop
I think that'd be helpful.
We generally see 90% to 95% of our members come through the brokers, although in some of our custom plans like Hello, Menno, we saw a lot of direct enrollment significant direct enrollment people, specifically wanting that product came directly through us through the through the exchanges. So.
Mark Bertolini: We generally see 90, 95% of our members come through the brokers, although in some of our custom plans, like Memorial Hermann, we saw a lot of direct enrollment, significant direct enrollment. People specifically wanting that product and came directly through us through the exchanges. So, but generally, we're looking at 90, 95%.
Mark Bertolini: We generally see 90, 95% of our members come through the brokers, although in some of our custom plans, like Memorial Hermann, we saw a lot of direct enrollment, significant direct enrollment. People specifically wanting that product and came directly through us through the exchanges. So, but generally, we're looking at 90, 95%.
Speaker #9: off? Again, that's the big question this
Speaker #6: year versus prior years. Usually, when they start paying premium, they stay with us. Unless there's some sort of event where they don't require our coverage anymore.
Speaker #6: However, in this case, when they start looking at the out-of-pocket costs, associated with plans that they were moved to or stayed in, they're going to start to say, "Wait a minute.
But generally we're looking at 90% to 95%.
And then my.
John Ransom: I mean, this is kind of a basic question, so you all can downgrade your opinion of my IQ. But what I don't understand is, I get the passive enrollment, but you've got to pay the first premium before you get coverage. So what kind of member gets passively renewed, pays the first premium, and then decides to drop off?
Speaker #6: This is expensive. And I'm not going to be able to afford this." Now, what we see - and this is an important aspect that's far different than prior years in this marketplace - is that most Americans now see healthcare as their single largest line item in their homes.
John Ransom: I mean, this is kind of a basic question, so you all can downgrade your opinion of my IQ. But what I don't understand is, I get the passive enrollment, but you've got to pay the first premium before you get coverage. So what kind of member gets passively renewed, pays the first premium, and then decides to drop off?
Is kind of a basic question. So you all can downgrade your opinion of my IQ, but.
What I don't understand is I guess, the passive enrollment, but you've got to pay the first premium.
Where you get coverage, so what kind of a member gets passively renewed pace. The first premium and then decides to drop off.
Speaker #6: In their family budget. More than their own mortgage. The result is that they are afraid of a lot of people who buy from us are afraid of losing the house or losing their family or having to go bankrupt if they don't get coverage.
Again, that's the big question this year versus prior years, usually when they start paying premium they stay with us unless there's some sort of event, where they don't require our coverage anymore. However.
Mark Bertolini: Again, that's the big question this year versus prior years. Usually when they start paying premium, they stay with us, unless there's some sort of event where they don't require our coverage anymore. However, in this case, when they start looking at the out-of-pocket costs associated with plans that they were moved to, or stayed in, they're gonna start to say: Wait a minute, this is expensive, and I'm not gonna be able to afford this. Now, what we see, and this is an important aspect, that's far different than prior years in this marketplace, is that most Americans now see healthcare as their single largest line item in their homes, in their family budget, more than their own mortgage.
Mark Bertolini: Again, that's the big question this year versus prior years. Usually when they start paying premium, they stay with us, unless there's some sort of event where they don't require our coverage anymore. However, in this case, when they start looking at the out-of-pocket costs associated with plans that they were moved to, or stayed in, they're gonna start to say: Wait a minute, this is expensive, and I'm not gonna be able to afford this. Now, what we see, and this is an important aspect, that's far different than prior years in this marketplace, is that most Americans now see healthcare as their single largest line item in their homes, in their family budget, more than their own mortgage.
However in this case when they start looking at the out of pocket costs associated with plans that they were moved to a more stayed in they're going to start to say wait a minute. This is expensive and I'm not going to be able to afford. This now what we see and this is an important aspect is far different than prior years in this marketplace is.
Speaker #6: So then the real question, the pivot question that we have, and I met with the AHA board of directors a couple of weeks ago, is what happens when they can't pay the deductible?
Speaker #6: And how do we handle that? And that's where we're sort of looking at this milieu and saying, "Does it create disenrollment? Do people still hold onto it because they're afraid of losing their homes or going into bankruptcy?" We're not sure.
Most Americans now see healthcare is the single largest line item in their homes in their family budget more than their own mortgage. The result is that they are afraid of a lot of people who buy from us are afraid of losing the house or losing their family or having to go.
Speaker #6: So we're not we're hedging our bets. On the level of disenrollment that'll occur as a
Mark Bertolini: The result is that they are afraid of, a lot of people who buy from us are afraid of losing the house, or losing their family, or having to go bankrupt if they don't get coverage. So then the real question, the pivot question that we have, and I met with the AHA board of directors a couple of weeks ago, is what happens when they can't pay the deductible, and how do we handle that? And that's where we're sort of looking at this milieu and saying: Does it create disenrollment? Do people still hold on to it because they're afraid of losing their homes or going into bankruptcy? We're not sure. So we're not, we're hedging our bets on the level of disenrollment that will occur as a result.
Mark Bertolini: The result is that they are afraid of, a lot of people who buy from us are afraid of losing the house, or losing their family, or having to go bankrupt if they don't get coverage. So then the real question, the pivot question that we have, and I met with the AHA board of directors a couple of weeks ago, is what happens when they can't pay the deductible, and how do we handle that? And that's where we're sort of looking at this milieu and saying: Does it create disenrollment? Do people still hold on to it because they're afraid of losing their homes or going into bankruptcy? We're not sure. So we're not, we're hedging our bets on the level of disenrollment that will occur as a result.
Speaker #6: result. John, just to add one more
Speaker #3: dimension there. When you look at our expectation and what we're seeing on payment rates, if you're going from having an out-of-pocket premium that you were paying in 2025 to having an out-of-pocket premium that you're paying to '26, and you have actively enrolled and even passively enrolled, we're seeing relatively strong payment rates in those categories.
If they don't get coverage. So then the real question that pivot question that we have and I met with EHR Board of directors. A couple of weeks ago is what happens when they can't pay the deductible.
And how do we handle that.
And Thats and Thats, where were sort of looking the milieu and.
And saying does it create just enrollment but people still hold onto it because they are afraid of losing their homes are going into bankruptcy.
Speaker #3: It's really the population where you're going from a $0 plan to something that you've got to pay out of pocket so you either lost your subsidy or you've transitioned from one plan to another.
We're not sure. So we're not we're hedging our bets.
The.
Speaker #3: That's where we expect to see really high non-payment rates. And the way the whole process works, you may not make your first payment in January, but you don't ultimately churn off until the end of the quarter because you are in a grace period until then.
On the level of this enrollment that will occur as a result.
Scott Blackley: John, just to add one more dimension there. When you look at our expectation and what we're seeing on payment rates, if you're going from, you know, having an out-of-pocket premium that you were paying, you know, in 2025 to having an out-of-pocket premium that you're paying to 2026, and you have actively enrolled, and even passively enrolled, we're seeing relatively strong payment rates in those categories. It's really the population where you're going from a $0 plan to something that you've got to pay out of pocket. So you've either lost your subsidy, or you've transitioned from one plan to another. That's where we expect to see really high non-payment rates.
Scott Blackley: John, just to add one more dimension there. When you look at our expectation and what we're seeing on payment rates, if you're going from, you know, having an out-of-pocket premium that you were paying, you know, in 2025 to having an out-of-pocket premium that you're paying to 2026, and you have actively enrolled, and even passively enrolled, we're seeing relatively strong payment rates in those categories. It's really the population where you're going from a $0 plan to something that you've got to pay out of pocket. So you've either lost your subsidy, or you've transitioned from one plan to another. That's where we expect to see really high non-payment rates.
John just to add one more dimension there.
When you look at our expectation and what we're seeing on payment rates, if youre going from having an out of pocket premium that you were paying in 2025 to happen in out of pocket premiums that youre paying to 'twenty six.
Speaker #9: I see. So passive going from zero premium to some premium, and we know that call centers in some cases where you used to sound these people up and never had a payment link, but our understanding was Oscar wasn't a big user of these legacy call centers.
And you have actively enrolled and even passably enrolled we're seeing relatively strong payment rates in those categories. It's really the population where youre going from a zero dollar plan to something that you've got to pay out of pocket.
Speaker #9: So you've got payment links. It's just that they go from, say, 0 to 100 bucks a month, and they just that's just a bridge too far.
You've either lost your subsidy or you've transitioned from one plant to another that's where we expect to see really high.
Speaker #9: Is that right?
Speaker #3: You are correct. We did not we are not a big user of call centers.
Non payment rates and the way the whole process works.
Scott Blackley: The way the whole process works, you know, you may not make your first payment in January, but you don't ultimately churn off until the end of the quarter because, you know, you are in a grace period until then.
Scott Blackley: The way the whole process works, you know, you may not make your first payment in January, but you don't ultimately churn off until the end of the quarter because, you know, you are in a grace period until then.
Speaker #9: Okay. Thank you.
You may not make your first payment in January but you don't ultimately churn off until the end of the quarter. Because you are in a grace period until then.
Speaker #2: Your next question comes from line of Stephen Baxter with Wells Fargo. Please go ahead.
Speaker #10: Yeah. Hi. Thanks. I wanted to come back to some of the questions on mix. I appreciate you're saying it's silver's lower in both gold and bronze are much higher, but is it possible to get maybe the percentages kind of before and after for each category?
I see some passive going from zero premium to some premium.
Scott Fidel: I see. So passive going from zero premium to some premium. And we know that, like, call centers, in some cases, we're used to signing these people up and never had a payment late. But our understanding was, OptCare wasn't a big user of these legacy call centers. So you've got payment links, it's just that they go from, say, zero to $100 a month, and they just, that's just a bridge too far. Is that right?
Sam Becker: I see. So passive going from zero premium to some premium. And we know that, like, call centers, in some cases, we're used to signing these people up and never had a payment late. But our understanding was, OptCare wasn't a big user of these legacy call centers. So you've got payment links, it's just that they go from, say, zero to $100 a month, and they just, that's just a bridge too far. Is that right?
We know that like call centers in some cases.
People up and never had a payment lag but I'll.
Speaker #10: And basically, the crux of it is that obviously, your membership PM/PMs seem like they're going to be up somewhere in the 50% range. So we're kind of comparing that to the overall revenue increase on the guidance line.
Oscar wasn't a big user of these legacy call centers and you've got payment links. It's just that they go from zero to 100 Bucks a month later.
So far from that right.
Scott Blackley: You are correct. We did not, we are not a big user of call centers.
Scott Blackley: You are correct. We did not, we are not a big user of call centers.
You are correct. We did not we are not a big user of call centers.
Speaker #10: And it's a little bit hard for us to square quite why there's not maybe more of a PM/PM yield in there. So it'd be great to have some more quantification of that and then have a follow-up if there's time.
Okay. Thank you.
Scott Fidel: Okay, thank you.
Sam Becker: Okay, thank you.
Your next question comes from the line of Stephen Baxter with Wells Fargo. Please go ahead.
Operator: Your next question comes from the line of Stephen Baxter with Wells Fargo. Please go ahead.
Operator: Your next question comes from the line of Stephen Baxter with Wells Fargo. Please go ahead.
Speaker #6: Sure. So for bronze, for the prior two years, around 25%. In 2026, it's 39%. Silver has been steady at 71% the prior two years.
Yeah, Hi, Thanks, I wanted to come back to some of the questions on mix I. Appreciate you, saying that silver is lower in both gold and bronze are much higher but is it possible to get maybe the percentages kind of before and after for each category and basically the.
Stephen Baxter: Yeah. Hi, thanks. I wanted to come back to some of the questions on mix. I appreciate you saying that Silver's lower and both Gold and Bronze are much higher, but is it possible to get, you know, maybe the percentages kind of before and after for each category? And basically, the crux of it is that, you know, obviously, your membership PMPMs seem like they're gonna be up somewhere in the 50% range, so we're kind of comparing that to the overall revenue increase on the guidance line. And it's a little bit hard for us to square quite why there's not, you know, maybe more of a PMPM yield in there. So it'd be great to have some more quantification of that, and then have a follow-up if there's time.
Stephen Baxter: Yeah. Hi, thanks. I wanted to come back to some of the questions on mix. I appreciate you saying that Silver's lower and both Gold and Bronze are much higher, but is it possible to get, you know, maybe the percentages kind of before and after for each category? And basically, the crux of it is that, you know, obviously, your membership PMPMs seem like they're gonna be up somewhere in the 50% range, so we're kind of comparing that to the overall revenue increase on the guidance line. And it's a little bit hard for us to square quite why there's not, you know, maybe more of a PMPM yield in there. So it'd be great to have some more quantification of that, and then have a follow-up if there's time.
Speaker #6: This year, they're at 36. In gold, which is in the low single digits, 3, 4 percent for the last two years, is now 25%.
<unk> of it is that you know obviously your membership PMT earns seem like theyre going to be up somewhere in the 50% range. So we're kind of comparing that to the overall revenue.
Speaker #6: So fairly significant changes. And the bronze and the gold plans we offered were $0 with a fairly not very rich
Revenue increase on the guidance line and it's a little bit hard for us the square quite why theres not anything more of a TMT and yield in there. So it'd be great to have some more quantification of that and then I have a follow up at this time sure.
Speaker #6: benefits. Steven, the other thing I would just
Speaker #3: mention is that the characteristics of the membership are important to modeling your revenue. So the fact that we're seeing a year younger membership has an impact on PM/PM revenue.
Mark Bertolini: Sure. So for Bronze, for the prior two years, around 25%. In 2026, it's 39%. Silver has been steady at 71% the prior two years. This year, they're at 36%. In Gold, which is in the low single digits, 3, 4% for the last two years, is now 25%. So fairly significant changes. And the Bronze and the Gold plans we offered were $0 with, you know, fairly... not very rich benefits.
Mark Bertolini: Sure. So for Bronze, for the prior two years, around 25%. In 2026, it's 39%. Silver has been steady at 71% the prior two years. This year, they're at 36%. In Gold, which is in the low single digits, 3, 4% for the last two years, is now 25%. So fairly significant changes. And the Bronze and the Gold plans we offered were $0 with, you know, fairly... not very rich benefits.
So for brands for the prior two years around 25% and 26% to 39%.
Silver has been steady at 71% the prior two years this year they were at 36.
Speaker #3: So you need to factor that in. That's one of the reasons why I discuss that in the call is to help with your ability to project revenue with that
And gold, which was in the low single digits three 4% over the last two years is now 25%.
Speaker #3: information. Got it.
Speaker #10: No, that's helpful. And then maybe just qualitatively, is there any difference in terms of this MLR guide, how you're thinking about kind of what your budgeting in for retained membership and sort of how you're thinking about this newer to the plan membership and how that might perform?
So fairly significant changes in the brands and the gold plans. We offered were zero dollar with a fairly not very rich benefits.
Stephen the other thing I would just mention is that the.
Scott Blackley: Stephen, the other thing I would just mention is that the characteristics of the membership are important to modeling your revenue. So the fact that, you know, we're seeing a year younger membership has an impact on PMPM revenue, so, you know, you need to factor that in. That's one of the reasons why I discussed that in the call, is to help with your ability to, you know, project revenue with that information.
Scott Blackley: Stephen, the other thing I would just mention is that the characteristics of the membership are important to modeling your revenue. So the fact that, you know, we're seeing a year younger membership has an impact on PMPM revenue, so, you know, you need to factor that in. That's one of the reasons why I discussed that in the call, is to help with your ability to, you know, project revenue with that information.
Speaker #10: I would love to understand just philosophically how you're thinking about that part of it. Thanks.
Characteristics of the membership are important to modeling your revenue. So the fact that we.
Speaker #3: Yeah. Well, we obviously model membership. With a lot of our past history, so we will have experiences that are different for returning members versus new initiations.
Were seeing a year younger membership has an impact on <unk> revenues. So.
You need to factor that in that's one of the reasons why I discussed that in the call is to help with your ability to <unk>.
<unk> revenue with that information.
Got it that's helpful.
Speaker #3: I would say that in the aggregate, given the amount of work we've been doing on this population, going which is now over two years that we've been expecting that these subsidies are going to go away.
Stephen Baxter: Got it. No, that's helpful. And then, yeah, maybe just, you know, qualitatively, like, is there any difference in terms of this MLR guide, how you're thinking about, you know, kind of what you're budgeting in for retained membership and, and sort of how you're thinking about this newer to the plan membership and how that might perform? I would love to understand, just philosophically, how you're thinking about that part of it. Thanks.
Stephen Baxter: Got it. No, that's helpful. And then, yeah, maybe just, you know, qualitatively, like, is there any difference in terms of this MLR guide, how you're thinking about, you know, kind of what you're budgeting in for retained membership and, and sort of how you're thinking about this newer to the plan membership and how that might perform? I would love to understand, just philosophically, how you're thinking about that part of it. Thanks.
And then maybe just qualitatively like is there any difference in terms of the MLR guidance, how youre thinking about kind of what you are budgeting for.
<unk> membership and sort of how youre thinking about this newer to the plan membership and how that might perform like we'd love to understand just philosophically, how youre thinking about that part of it. Thanks.
Speaker #3: And so starting with the whole how do we design plans to capture people who've had a price shock? We've really built in, I think, a deep level of expectation and understanding about how those different populations are going to perform.
Yeah, well, we obviously modeled membership.
Scott Blackley: Yeah, well, we obviously model membership with a lot of our past history, so, you know, we will have experiences that are different for returning members versus new initiations. I would say that in the aggregate, given the amount of work we've been doing on this population, you know, which is now over two years, that we've been expecting that these subsidies are going to go away. And so starting with the whole, you know, how do we design plans to capture people who, you know, who've had a price shock? We've really built in, I think, a deep level of expectation and understanding about how those different populations are going to perform. I talked about all the, you know, the ways that we tried to triangulate and get data about those folks.
Scott Blackley: Yeah, well, we obviously model membership with a lot of our past history, so, you know, we will have experiences that are different for returning members versus new initiations. I would say that in the aggregate, given the amount of work we've been doing on this population, you know, which is now over two years, that we've been expecting that these subsidies are going to go away. And so starting with the whole, you know, how do we design plans to capture people who, you know, who've had a price shock? We've really built in, I think, a deep level of expectation and understanding about how those different populations are going to perform. I talked about all the, you know, the ways that we tried to triangulate and get data about those folks.
Yeah.
With a lot of our past history. So we will have experiences that are difference for returning members versus new initiations.
Speaker #3: I talked about all the ways that we tried to triangulate and get data about those folks. But I think that in general, I would say we're using our historical experience with each of those populations to project the future, feel like that the estimates that we've made both in pricing and now we've taken everything that we've heard to date and built that into our guidance.
I would say that in the aggregate given the amount of work we've been doing on this population going which is now over two years that we've been expecting that the subsidies are going to go away and so starting with the whole how do we design plans to capture people, who who had a price shock.
Speaker #3: And I feel like we're being very balanced
Speaker #3: in our estimates. And the
Speaker #6: increase in risk adjustment allowed also takes the MLR up.
Okay.
We've really built in I think a deep level of expectation and understanding about how those different populations are going to perform I talked about all the ways that we tried to triangulate and get data about those folks, but I think that in general I would say, we're using our historical experience with each of those populations to project the future.
Speaker #2: Your next question comes from the line of Scott Fidel with Goldman Sachs. Please go
Speaker #2: ahead. Hi.
Speaker #11: This is Sam Becker on for Scott Fidel. Yeah, I was just curious. On what are your levers key levers to achieving EBITDA profitability without the extension of the enhanced subsidies?
Scott Blackley: But I think that in general, I would say we're using our historical experience with each of those populations to, you know, project the future. I feel like that the estimates that we've made, both in pricing and now, you know, we've taken everything that we've heard, you know, to date and built that into our guidance, and you know, I feel like we're being very balanced in our estimates.
Scott Blackley: But I think that in general, I would say we're using our historical experience with each of those populations to, you know, project the future. I feel like that the estimates that we've made, both in pricing and now, you know, we've taken everything that we've heard, you know, to date and built that into our guidance, and you know, I feel like we're being very balanced in our estimates.
Sure.
Feel like that the estimates that we've made both in pricing and now we've taken everything that we've heard.
Speaker #11: And what are those key headwinds or tailwinds when thinking about MLR and SG&A from 2025 to
To date and built that into our guidance and.
Speaker #11: 2026? Well, there
I feel like we're being very balanced in our estimates and the increase in risk adjustment allowed also takes care of Nomura.
Speaker #6: are a number of them. First, it's growth. So it's growth drives a reduction in overall percentage of costs. AI, we're able to create a better member experience and greater stickiness.
Mark Bertolini: The increase in risk adjustment allowed also takes the MLR up.
Mark Bertolini: The increase in risk adjustment allowed also takes the MLR up.
Your next question comes from the line of Scott Fidel with Goldman Sachs. Please go ahead.
Operator: Your next question comes from the line of Scott Fidel with Goldman Sachs. Please go ahead.
Operator: Your next question comes from the line of Scott Fidel with Goldman Sachs. Please go ahead.
Speaker #6: And we're seeing that on a regular basis. We have dozens of LLMs on the back end of the business and now two agentic AIs, and we're about to launch another here in the next few months.
Hi, This is Sam Becker on for Scott Fidel.
Scott Fidel: Hi, this is Sam Becker on for Scott Fidel. Yeah, I was just curious on what are your levers, key levers to achieving EBITDA profitability without the extension of the enhanced subsidies? And what are those key headwinds or tailwinds when thinking about MLR and SG&A from 2025 to 2026?
Sam Becker: Hi, this is Sam Becker on for Scott Fidel. Yeah, I was just curious on what are your levers, key levers to achieving EBITDA profitability without the extension of the enhanced subsidies? And what are those key headwinds or tailwinds when thinking about MLR and SG&A from 2025 to 2026?
Yeah I was just curious on what are your levers key levers to achieving EBITDA profitability without the extension of enhanced subsidies and what are those key headwinds or tailwind when thinking about MLR in SG&A from 2025 to 2026.
Speaker #6: So we're now having a lot of impact where people can access us quicker with much more accuracy and without having to wait on phones.
Speaker #6: Which also, again, reduces our costs. And then on the MLR front, we are constantly working on our contracts and our utilization management. And we task the team to deliver so many 100 basis points every year in opportunities to keep our trend in line with where we think the market should be.
Well there are a number of them first its growth.
Mark Bertolini: Well, there are a number of them. First, it's growth. So, it's, you know, growth drives a reduction in overall percentage of costs. AI, where we're able to create a better member experience and greater stickiness, and we're seeing that on a regular basis. We have dozens of LLMs on the back end of the business, and now two agentic AIs, and we're about to launch another here in the next few months. So we're now having a lot of impact where people can access us quicker, with much more accuracy, and without having to wait on phones, which we also again reduces our costs.
Mark Bertolini: Well, there are a number of them. First, it's growth. So, it's, you know, growth drives a reduction in overall percentage of costs. AI, where we're able to create a better member experience and greater stickiness, and we're seeing that on a regular basis. We have dozens of LLMs on the back end of the business, and now two agentic AIs, and we're about to launch another here in the next few months. So we're now having a lot of impact where people can access us quicker, with much more accuracy, and without having to wait on phones, which we also again reduces our costs.
So.
It's growth drives.
Reduction in overall.
Percentage of costs.
Hi.
We're able to create a better member experience and greater stickiness or we're seeing that on a regular on a regular basis. We have dozens of <unk> on the back end of the business and now to <unk> or about to launch another here in the next few months. So we're now having a lot of impact where people can access us quicker with much more.
Speaker #6: And so all of those things together and there are a lot of levers that we manage every day through the management process are the things that we track to make sure that
Speaker #6: we can hit our targets. And
Speaker #3: Sam, I just want to make one point really clear. Our guidance is on EBIT. So it's not on adjusted EBITDA. I did talk about it in the call that we would expect adjusted EBITDA to be 115 million dollars above our earnings from operations guidance that we put out.
The accuracy and without having to wait on phones, which also again reduces our costs.
Mark Bertolini: And then, on the MLR front, we are constantly working on our contracts and our utilization management, and we, you know, task the team to deliver so many hundred basis points every year in opportunities to keep our trend in line with where we think the market should be. And so, all of those things together, and there are a lot of levers that we manage every day through the management process, are the things that we track to make sure that we can hit our targets.
Mark Bertolini: And then, on the MLR front, we are constantly working on our contracts and our utilization management, and we, you know, task the team to deliver so many hundred basis points every year in opportunities to keep our trend in line with where we think the market should be. And so, all of those things together, and there are a lot of levers that we manage every day through the management process, are the things that we track to make sure that we can hit our targets.
And then on the MLR front, we are constantly working on our contracts and our utilization management and we.
<unk>.
We can.
Speaker #3: So I just want to make sure that we're talking about the same things. Thank you.
Task the team to deliver so many 100 basis points every year and opportunities to keep our trend in line with where we think the market should be and.
So all of those things together and there are and there are a lot of levers that we manage every day through the management process.
Speaker #2: Your next question comes from a line of Michael Hall with Baird. Please go
Speaker #2: ahead. Good morning.
What are the things that we track to make sure that we are we can hit our targets.
Speaker #12: This is Olivia on for Michael. Thank you for taking the question. Because exchange marketplace risk adjustment is net neutral, creating a reliance on other plans in your markets, the lack of visibility any one plan has into the rest of the market makes risk adjustment mechanics difficult in our view.
Scott Blackley: ... And Sam, I just want to make one point really clear. Our guidance is on EBIT, so it's not on adjusted EBITDA. I did talk about in the call that we would expect adjusted EBITDA to be $115 million above our earnings from operations guidance that we put out. So, I just want to make sure that we're talking, you know, about the same things. Thank you.
Scott Blackley: ... And Sam, I just want to make one point really clear. Our guidance is on EBIT, so it's not on adjusted EBITDA. I did talk about in the call that we would expect adjusted EBITDA to be $115 million above our earnings from operations guidance that we put out. So, I just want to make sure that we're talking, you know, about the same things. Thank you.
Sam I just wanted to make one point really clear our guidance is on EBIT.
It's not on.
Adjusted EBITDA I did talk about in the call that we would expect adjusted EBITDA to be $115 million.
Speaker #12: Looking to 2026 and beyond, you mentioned the potential weekly industry report in one queue. Whether it's through this potential weekly report or other efforts, can you share how you're getting more insight into the rest of the market as well as your thoughts on what can be done to make risk adjustment more transparent and less volatile in the future?
Above our earnings from operations guidance that we put out so.
I just want to make sure that we're talking about the same things. Thank you.
Speaker #12: Is there any potential reform you think could be done to improve risk adjustment? And I have a follow-up if there's
Your next question comes from the line of Michael Hall with Baird. Please go ahead.
Operator: Your next question comes from the line of Michael Ha with Baird. Please go ahead.
Operator: Your next question comes from the line of Michael Ha with Baird. Please go ahead.
Speaker #12: time. Olivia, thanks for the
Speaker #3: question. Look, I think that the estimating risk adjustment, as you say, is the most difficult thing that we have to do each quarter because you're both trying to project your own performance inside your own book and also the market.
Good morning. This is Olivia on for Michael. Thank you for taking the question because exchange marketplace risk adjustment is net neutral, creating a reliance on other plans beyond market the lack of visibility.
Michael Ha: Good morning. This is Olivia on for Michael. Thank you for taking the question. Because exchange marketplace risk adjustment is net neutral, creating a reliance on other plans in your markets, the lack of visibility any one plan has into the rest of the market makes risk adjustment mechanics difficult in our view. Looking to 2026 and beyond, you mentioned the potential Wakely industry report in Q1. Whether it's through this potential Wakely report or other efforts, can you share how you're getting more insight into the rest of the market, as well as your thoughts on what can be done to make risk adjustment more transparent and less volatile in the future? Is there any potential reform you think could be done to improve risk adjustment? And I have a follow-up if there's time.
Olivia Miles: Good morning. This is Olivia on for Michael. Thank you for taking the question. Because exchange marketplace risk adjustment is net neutral, creating a reliance on other plans in your markets, the lack of visibility any one plan has into the rest of the market makes risk adjustment mechanics difficult in our view. Looking to 2026 and beyond, you mentioned the potential Wakely industry report in Q1. Whether it's through this potential Wakely report or other efforts, can you share how you're getting more insight into the rest of the market, as well as your thoughts on what can be done to make risk adjustment more transparent and less volatile in the future? Is there any potential reform you think could be done to improve risk adjustment? And I have a follow-up if there's time.
Ability any one plan has introduced to the market makes risk adjustment mechanics technical at an idea looking to 2026 and beyond do you mentioned the potential weekly industry report in <unk>, whether it's through this potential weekly report or other efforts can you share how youre getting more insight into the rest of the market as well as your thoughts on what can be done to make this adjustment more transparent and less volatile on the fees.
Speaker #3: I think we're quite good at projecting our own market, our own book, and what the performance is. Where we do get surprised is by how the market moves in ways that we can't see.
Speaker #3: I'm optimistic that working with Wakely and it sounds like most of us in the industry are working with them is an important service provider to all of us to help get more timely information about what's going on with the market because that's the most challenging part of our ability to project that.
Is there any potential reform do you think can be done to improve risk adjustment and I have a follow up at this time.
Olivia Thanks for the question.
Scott Blackley: Olivia, thanks for the question. Look, I think that estimating risk adjustment, as you say, is the most, you know, difficult thing that we have to do each quarter, because you're both trying to project your own performance inside your own book and also the market. It's, I think we're quite good at projecting our own market, you know, our own book and what the performance is. Where we do get surprised is by how the market moves in ways that we can't see.
Scott Blackley: Olivia, thanks for the question. Look, I think that estimating risk adjustment, as you say, is the most, you know, difficult thing that we have to do each quarter, because you're both trying to project your own performance inside your own book and also the market. It's, I think we're quite good at projecting our own market, you know, our own book and what the performance is. Where we do get surprised is by how the market moves in ways that we can't see.
Look I think that the estimating risk adjustment as you say is the most difficult thing that we have to do.
Speaker #3: So I think we're taking steps in that direction. I'm not sure that we'll get all the way there in this first report, but I do think that with the support of many of the industry players that we can increase visibility into this estimate over time.
Each quarter, because you're you are both trying to project your own performance inside your own book and also the market.
I think we're we're quite good at projecting our own market, our own book and what the performances, where we do get surprises by how the market moves in ways that we can't see I'm optimistic that the that working with wakely and it sounds like most of us in the industry are working with them as an important service.
Speaker #12: Thank you. And if I can squeeze
Speaker #12: in yeah. If I can squeeze in one more, Go ahead. please. When I think about healthcare innovation, two specific areas I see often leading the way in becoming an agent of change are in ICRA that could disrupt an employer group market that is ripe for change and leading the charge in crafting to be the future of health insurance.
Scott Blackley: I'm optimistic that that working with Wakely, and it sounds like most of us in the industry are working with them as an important service provider to, to all of us, to help get more timely information about what's going on with the market, because that's the most challenging part of our ability to project that. So, you know, I think we're taking steps in that direction. I'm not sure that, that we'll get all the way there in this first report, but I do think that, with the support of many of the industry players, that we can, you know, increase visibility into this estimate over time.
Scott Blackley: I'm optimistic that that working with Wakely, and it sounds like most of us in the industry are working with them as an important service provider to, to all of us, to help get more timely information about what's going on with the market, because that's the most challenging part of our ability to project that. So, you know, I think we're taking steps in that direction. I'm not sure that, that we'll get all the way there in this first report, but I do think that, with the support of many of the industry players, that we can, you know, increase visibility into this estimate over time.
Ryder to all of us to help get more timely information about what's going on with the market because thats the most challenging part of.
Our ability to project that so.
I think we're taking steps in that direction I'm not sure that we'll get all the way there in this first report, but I do think that with the support of many of the industry players that we can.
Speaker #12: Both are exciting, but both are early on. So as you look ahead, what do you think needs to happen to catalyze the rate of adoption?
Speaker #12: And as a first mover, what type of competitive advantages do you believe this will present off for longer term?
Kris visibility into this estimate over time.
Speaker #6: So from an ICRA standpoint, Olivia, we are not only concentrating on products to capture membership in the insurance company, but we've also built out the front end of the business where we can now work with employers to convert them.
Okay.
Thank you Joe.
Michael Ha: Thank you.
Olivia Miles: Thank you.
Scott Blackley: Do you have a follow-up?
Scott Blackley: Do you have a follow-up?
Michael Ha: If I can squeeze in... Yeah.
Olivia Miles: If I can squeeze in... Yeah.
Yes go ahead, if I can sneak in one more please.
Scott Blackley: Go ahead.
Scott Blackley: Go ahead.
Michael Ha: If I can squeeze in one more, please. When I think about healthcare innovation, two specific areas I see Oscar leading the way in becoming an agent of change are in ICHRA, that could disrupt an employer group market that is ripe for change, and leading the charge in crafting conditions, condition and disease-specific plans, which appear to be the future of health insurance. Both are exciting, but both are early on. So as you look ahead, what do you think needs to happen to catalyze the rate of adoption? And as a first mover, what type of competitive advantages do you believe this will present Oscar longer term?
Olivia Miles: If I can squeeze in one more, please. When I think about healthcare innovation, two specific areas I see Oscar leading the way in becoming an agent of change are in ICHRA, that could disrupt an employer group market that is ripe for change, and leading the charge in crafting conditions, condition and disease-specific plans, which appear to be the future of health insurance. Both are exciting, but both are early on. So as you look ahead, what do you think needs to happen to catalyze the rate of adoption? And as a first mover, what type of competitive advantages do you believe this will present Oscar longer term?
When I think about health care innovation, two specific areas I see for leading the way in becoming an agent of change or in a crowd that could disrupt the employer group March 5th that is ripe for change and leading the charge in crafting condition condition and disease specific plan, which appear to be the future of health insurance both are exciting.
Speaker #6: There's a lot of opportunity in revenue and actually in higher margin unregulated and not requiring any risk capital to work with employers to move employees into defined contribution.
Speaker #6: And once in defined contribution, work with brokers to get them into whatever plan works for them, whether that is an Oscar plan or not.
They're early so as you look ahead, what do you think needs to happen to catalyze the rate of adoption and as a first move or what type of competitive advantages do you believe it's represent Oscar longer term.
Speaker #6: So you're going to start seeing us over time report two different kinds of revenue in the model, where we're going to have revenue coming out of the conversion of employers to the defined contribution, the whole brokerage work that's done there.
So from a knicker standpoint Olivia.
Mark Bertolini: So from an ICHRA standpoint, Olivia, we are not only concentrating on products to capture membership in the insurance company, but we've also built out the front end of the business where we can now work with employers to convert them. There's a lot of opportunity in revenue and, actually, in a higher margin, unregulated and not requiring any risk capital, to work with employers to move employees into defined contribution. And once in defined contribution, work with brokers to get them into whatever plan works for them, whether that is an Oscar plan or not.
Mark Bertolini: So from an ICHRA standpoint, Olivia, we are not only concentrating on products to capture membership in the insurance company, but we've also built out the front end of the business where we can now work with employers to convert them. There's a lot of opportunity in revenue and, actually, in a higher margin, unregulated and not requiring any risk capital, to work with employers to move employees into defined contribution. And once in defined contribution, work with brokers to get them into whatever plan works for them, whether that is an Oscar plan or not.
We are not only concentrating on products to capture membership in the insurance company, but we've also built out the front end of the business, where we cannot work with employers to convert them.
Speaker #6: And then also membership that we capture inside our own health plan. So the ICRA opportunity is much larger than just the membership, although our membership did double this year.
There's a lot of opportunity in revenue and are actually in the higher margin unregulated and not requiring any.
Speaker #6: And given what happened in the individual market relative to rates, there was some reluctance on employers to jump in now. We need to show that we can stabilize that marketplace and get more people in.
Risk capital to work with employers to move employees into defined contribution and once in defined contribution work with brokers to get them into whatever plan works for them, whether that is an Oscar plan or not.
Speaker #6: So that's sort of the lay of the land on ICRA. On the disease or the lifestyle products, we truly believe - and this is the proposal that we put in front of the administration and when they've talked about - is to separate the investment decision from the financing decision.
So youre going to start seeing us overtime report two different kinds of revenue in the model, where we're going to have revenue coming out of the conversion of employers that are defined contribution the whole brokerage work. That's done there and then also membership that we captured inside of our own health plan.
Mark Bertolini: So you're gonna start seeing us over time, report two different kinds of revenue in the model, where we're gonna have revenue coming out of the conversion of employers to the defined contribution, the whole brokerage work that's done there, and then also membership that we capture inside our own health plan. So the ICHRA opportunity is much larger than just the membership, although our membership did double this year. And given what happened in the individual market relative to rates, there was some reluctance on employers to jump in now. We need to show that we can stabilize that marketplace and get more people in. So that's sort of the lay of the land on ICHRA.
Mark Bertolini: So you're gonna start seeing us over time, report two different kinds of revenue in the model, where we're gonna have revenue coming out of the conversion of employers to the defined contribution, the whole brokerage work that's done there, and then also membership that we capture inside our own health plan. So the ICHRA opportunity is much larger than just the membership, although our membership did double this year. And given what happened in the individual market relative to rates, there was some reluctance on employers to jump in now. We need to show that we can stabilize that marketplace and get more people in. So that's sort of the lay of the land on ICHRA.
Speaker #6: The investment being what I buy, versus how I pay for it. And the opportunity to create HSA Roth IRA-like funds where people can take whatever funding mechanism they have, whether that's their employer, their own money, Medicare, Medicaid, or other subsidies like from the ACA, and put them into a bucket.
So the aircraft Retuning is much larger than just the membership although our membership to double this year.
And given what happened in the individual market relative to rates. There was some reluctance unemployed is to jump and now we need to show that we can stabilize that marketplace and get more people in so that's sort of the lay of the land on that growth.
Speaker #6: And by buying a qualified health plan, manage the rest of their costs by themselves - and this is where our new agentic AI tool is headed - then having a marketplace where people can use the money that they receive for healthcare to buy what they want, in their local market, a narrow network, with a plan design that changes with their life, starts to create the opportunity for lifetime value of membership and changes the investment thesis that insurance companies would have in managing that membership.
Mark Bertolini: On the disease or the lifestyle products, we truly believe, and this is the proposal that we put in front of the administration, and one they've talked about, is to separate the investment decision from the financing decision. The investment being what I buy versus how I pay for it. And the opportunity to create HSA, Roth IRA-like funds, where people can take whatever funding mechanism they have, whether that's their employer, their own money, Medicare, Medicaid, or other subsidies like from the ACA, and put them into a bucket.
Mark Bertolini: On the disease or the lifestyle products, we truly believe, and this is the proposal that we put in front of the administration, and one they've talked about, is to separate the investment decision from the financing decision. The investment being what I buy versus how I pay for it. And the opportunity to create HSA, Roth IRA-like funds, where people can take whatever funding mechanism they have, whether that's their employer, their own money, Medicare, Medicaid, or other subsidies like from the ACA, and put them into a bucket.
The disease or their lifestyle products. We truly believe this is the proposal that we've put in front of the administration and when they've talked about is to separate the investment decision from the financing decision the investment being what I buy.
Versus how I pay for it.
And the opportunity to create HSA Roth IRA liked funds, where people can take whatever funding mechanism. They have whether that's their employer their own money Medicare Medicaid or other subsidies like from the HCA and put them into a bucket and by buying a qualified health plan.
Speaker #6: And how we would approach it, which leads to the lifestyle products. If we can move with a family or an individual through their lifetime, offering them new designs that allow them to stay with their network, be effective in managing their current health status, and live as fully as they can till their last day, I think that's the ultimate culmination of an individual market where all Americans can get healthcare that they want, their choice, and where we have a market so large that morbidity changes really have no impact on the overall underwriting cycle of the
Mark Bertolini: And by buying a qualified health plan, manage the rest of the cost by themselves, and this is where our new Agentic AI tool is headed. Then, having a marketplace where people can use the money that they receive for healthcare to buy what they want in their local market, a narrow network, with a plan design that changes with their life, starts to create the opportunity for lifetime value of membership and changes the investment thesis that insurance companies would have in managing that membership and how we would approach it, which leads to the lifestyle products.
Mark Bertolini: And by buying a qualified health plan, manage the rest of the cost by themselves, and this is where our new Agentic AI tool is headed. Then, having a marketplace where people can use the money that they receive for healthcare to buy what they want in their local market, a narrow network, with a plan design that changes with their life, starts to create the opportunity for lifetime value of membership and changes the investment thesis that insurance companies would have in managing that membership and how we would approach it, which leads to the lifestyle products.
Manage the rest of their costs by themselves and this is where our new <unk> AI tool is headed than having a marketplace where people can use the money that they receive for health care to buy what they want.
In their local market and a narrow network with a planned design changes with their life starts to create the opportunity for lifetime value of membership and changes is the investment thesis that insurance companies would have in managing that membership and how we would approach it which leads to the lifestyle products.
Speaker #6: business. Your next
Speaker #12: question comes from the line of Raj Kumar with Stevens. Please go ahead.
Mark Bertolini: If we can move with a family or an individual through their lifetime, offering them new designs that allow them to stay with their network, be effective in managing their current health status, and live as fully as they can till their last day, I think that's the ultimate culmination of an individual market where all Americans can get healthcare that they want, their choice, and where we have a market so large that morbidity changes really have no impact on the overall underwriting cycle of the business.
Mark Bertolini: If we can move with a family or an individual through their lifetime, offering them new designs that allow them to stay with their network, be effective in managing their current health status, and live as fully as they can till their last day, I think that's the ultimate culmination of an individual market where all Americans can get healthcare that they want, their choice, and where we have a market so large that morbidity changes really have no impact on the overall underwriting cycle of the business.
Can move with their family or an individual through their lifetime offering them new designs that allow them to stay with their network.
Speaker #13: Hi. Maybe just following up on the kind of ICRA commentary. Just curious on the membership associated with the Hy-Vee arrangement and kind of what's the initial uptake from that employee base?
Be effective in managing their current health status and look as fully as they cancel their last day I think that's the ultimate culmination of an individual market, where all Americans can get health care that they want their choice.
Speaker #13: And then historically, have you seen kind of the ICRA population exhibit a more kind of stickier membership base? Or should we expect a similar level of churn relative to the kind of broader individual plans?
And where we have a market is so large that morbidity changes really have no impact on the overall underwriting cycle of the business.
Speaker #6: I think the first of all, we're not giving out actual ICRA numbers by segment yet. It's not meaningful enough to move the dial. Although we see all of these efforts being successful so far.
Your next question comes from the line of Raj Kumar with Stephens. Please go ahead.
Operator: Your next question comes from the line of Raj Kumar with Stephens. Please go ahead.
Operator: Your next question comes from the line of Raj Kumar with Stephens. Please go ahead.
Speaker #6: The more important part is, again, back to this thesis of I have my money, I buy it the way I want. We think ICRA's stickier because as long as I have the funds to pay for it, I can keep what I bought.
Hi, maybe just following up on the kind of commentary just curious on the membership associated with the IV arrangement.
Adam Ron: ... Hi, maybe just following up on the kind of ICHRA commentary. Just curious on the membership associated with the Hy-Vee arrangement, and kind of what's the initial uptake from that employee base? And then, you know, historically, have you seen kind of the ICHRA population exhibit a more kind of stickier membership base? Or, you know, should we expect a similar level of churn relative to the kind of broader individual plan?
Raj Kumar: ... Hi, maybe just following up on the kind of ICHRA commentary. Just curious on the membership associated with the Hy-Vee arrangement, and kind of what's the initial uptake from that employee base? And then, you know, historically, have you seen kind of the ICHRA population exhibit a more kind of stickier membership base? Or, you know, should we expect a similar level of churn relative to the kind of broader individual plan?
And kind of what's the initial uptake from that employee base and then.
Speaker #6: And I don't have to change it. If my financial if my funding circumstances change, I just use the different funding to keep the same thing I had.
Historically have you seen kind of the anchor population exhibited more stickier membership base or should we expect a similar level of churn relative to the kind of broader individual plan.
Speaker #6: So we view ICRA as a development moving beyond the ACA model, which is helping people when they can't afford health insurance, to a model where I now buy my own insurance, my own network, the product design that fits me at this time.
Okay.
I think first of all we're not giving out actual accra numbers by segment yet.
Mark Bertolini: I think, first of all, we're not giving out actual ICHRA numbers by segment yet. It's not meaningful enough to move the dial, although we see all of these efforts being successful so far. The more important part is, again, back to this thesis of, I have my money, I buy it the way I want. We think ICHRA's stickier, because as long as I have the funds to pay for it, I can keep what I bought. And I don't have to change it. If my funding circumstances change, I just use the different funding to keep the same thing I had.
Mark Bertolini: I think, first of all, we're not giving out actual ICHRA numbers by segment yet. It's not meaningful enough to move the dial, although we see all of these efforts being successful so far. The more important part is, again, back to this thesis of, I have my money, I buy it the way I want. We think ICHRA's stickier, because as long as I have the funds to pay for it, I can keep what I bought. And I don't have to change it. If my funding circumstances change, I just use the different funding to keep the same thing I had.
It's not meaningful enough to move the dial, although we see all of these efforts being successful so far.
Speaker #6: It allows me to stay with my product and my network for as long as I want. That's where the member experience and all these tools we're building comes in, where people can actually use it the way they need to and have the information they need to use it most effectively.
The more important part is again back to this thesis of I have my money I buy it the way I want we think stick.
Stickier.
Because as long as I have the funds to pay for it I can keep what I bought.
But I don't have to change it if my financials. If my funding funding circumstances change I just use different the different funding to keep the same thing.
Speaker #13: Got it. And then as a quick follow-up, just kind of curious on the new member engagement rates. For 2026, and how's that comparing to what you're seeing or experiencing at this same point last year?
So we view <unk> as a development moving beyond the HCA model, which is helping people when they can't afford health insurance to a model, where I know by my own insurance my own network. The product design that fits me it might at this time and allows them to stay with my product and my network for as long as they want.
Mark Bertolini: So we view ICHRA as a development moving beyond the ACA model, which is helping people when they can't afford health insurance, to a model where I now buy my own insurance, my own network, the product design that fits me at my-- at this time, and allows me to stay with my product and my network for as long as I want. That's where the member experience and all these tools we're building comes in, where people can actually use it the way they need to and have the information they need to use it most effectively.
Mark Bertolini: So we view ICHRA as a development moving beyond the ACA model, which is helping people when they can't afford health insurance, to a model where I now buy my own insurance, my own network, the product design that fits me at my-- at this time, and allows me to stay with my product and my network for as long as I want. That's where the member experience and all these tools we're building comes in, where people can actually use it the way they need to and have the information they need to use it most effectively.
Speaker #3: Yeah. I don't think that.
Speaker #6: Too early to tell,
Speaker #6: really. After the first quarter, we'll have a better idea.
Speaker #12: Your next question comes from the line of Craig Jones with Bank of America. Please go ahead.
That's where the that's where the member experience and all these tools. We're building comes in where people can actually use it the way they need to have the information they need to use it most effectively.
Speaker #3: All right. Thank you. So I was wondering, what you've assumed in your guidance, does the change in the percentage of zero utilizers between 2025 and 2026?
Speaker #3: I think I would need to come down. The expiration enhanced tax credits. If you can't give us the exact percentage, maybe just how do you think that'll compare to your 2019 percentage prior to when those were
Got it and then as a quick follow up just kind of curious on the new member engagement rates for 2026, and how is that comparing to what youre seeing or experiencing at this same point last year.
Adam Ron: Got it. And then as a quick follow-up, just kind of curious on the new member engagement rates for 2026, and how's that comparing to what you're seeing or experiencing at this same point last year?
Raj Kumar: Got it. And then as a quick follow-up, just kind of curious on the new member engagement rates for 2026, and how's that comparing to what you're seeing or experiencing at this same point last year?
Speaker #3: enacted? Yeah.
Speaker #13: Correct. Thanks for the question. Excuse me. In general, we don't comment on the portion of our book that's non-utilizers. It's a normal part of given that we have a very healthy membership, we would anticipate that that not all of those members need care in any given year.
Yes, I don't think too early to tell.
Scott Blackley: Yeah, I don't think that-
Scott Blackley: Yeah, I don't think that-
Mark Bertolini: Too, too early to tell, Ricky.
Mark Bertolini: Too, too early to tell, Ricky.
Scott Blackley: Yeah.
Scott Blackley: Yeah.
Mark Bertolini: After Q1, we'll have a better idea.
After the first quarter will have a better idea.
Mark Bertolini: After Q1, we'll have a better idea.
Your next question comes from the line of Craig Jones with Bank of America. Please go ahead.
Operator: Your next question comes from the line of Craig Jones with Bank of America. Please go ahead.
Operator: Your next question comes from the line of Craig Jones with Bank of America. Please go ahead.
Okay. Thank you.
Adam Ron: Great. Thank you. So I was wondering what you've assumed in your guidance: does the change in the percentage of zero utilizers between 2025 and 2026? I think that would need to come down, the expiration enhanced tax credits. If you can't give us the exact percentage, maybe just how do you think that'll compare to your 2019 percentage prior to when those were enacted?
Adam Ron: Great. Thank you. So I was wondering what you've assumed in your guidance: does the change in the percentage of zero utilizers between 2025 and 2026? I think that would need to come down, the expiration enhanced tax credits. If you can't give us the exact percentage, maybe just how do you think that'll compare to your 2019 percentage prior to when those were enacted?
So I was wondering what you've assumed in your guidance.
Speaker #13: So we do have a portion of the book that doesn't utilize. When I look at the how our book is evolved, there our book is younger than it was a year ago.
The change in the percentage of your utilization 2025, and 236, I think that would need to come down out of desperation enhanced tax credits. If you can't give us exact percentage, maybe just how you think that will compare to your 2019 percentage due prior to windows.
Speaker #13: So it isn't necessarily the case that you should assume that we'll see lower levels of non-utilization we take all of those factors into account when we set our guidance for MLR and, as I talked about earlier, we've done a terrific amount of work to build up our estimates around those projections and we feel like we've we're as comfortable as we can be with them at this point in the year.
Enacted.
Yes, correct. Thanks for the question.
Scott Blackley: Yeah, Craig, thanks for the question. Excuse me. In general, we don't comment on, you know, the portion of our book that's non-utilizers. You know, it's a normal part of, given that we have a very healthy membership, we would anticipate that not all of those members need care in any given year. So we do have a portion of the book that doesn't utilize. You know, when I look at how our book has evolved, our book is younger than it was a year ago, so, you know, it isn't necessarily the case that you should assume that we'll see, you know, lower levels of non-utilization. You know, we take all of those factors into account when we set our guidance for MLR.
Scott Blackley: Yeah, Craig, thanks for the question. Excuse me. In general, we don't comment on, you know, the portion of our book that's non-utilizers. You know, it's a normal part of, given that we have a very healthy membership, we would anticipate that not all of those members need care in any given year. So we do have a portion of the book that doesn't utilize. You know, when I look at how our book has evolved, our book is younger than it was a year ago, so, you know, it isn't necessarily the case that you should assume that we'll see, you know, lower levels of non-utilization. You know, we take all of those factors into account when we set our guidance for MLR.
Excuse me.
In general we don't comment on.
The.
The portion of our book that's non utilized there's it's a normal part of given that we have a very healthy <unk>.
Membership, we would anticipate that that not all of those members need care in any given year. So we do have a portion of the book that that doesn't utilize.
Speaker #3: Okay. Got it. Thank you. And then maybe for those 400,000 members that expect to roll off by the end of the quarter, what do you think their 2025 MLR was, and how would that compare to, say, historically what your members that rolled off would be?
When I look at the how.
How our book has evolved there.
Our book is younger than it was a year ago. So it isn't necessarily the case that you should assume that we will see lower levels of.
Speaker #3: Thank you.
Speaker #13: Yeah. I'm not going to dimension the specifics of those members when I look at the difference between 2025 MLR and 2026 MLR, it's really a story about the changes in market morbidity on a year-over-year basis.
Non utilization.
We take all of those factors into account when we set our <unk>.
<unk> four MLR and as I talked about earlier, we've done a terrific amount of work to build up our estimates around those projections.
Scott Blackley: And, as I talked about earlier, we've done a terrific amount of work to build up our estimates around, you know, those projections, and we feel like we're as comfortable as we can be with them at this point in the year.
Scott Blackley: And, as I talked about earlier, we've done a terrific amount of work to build up our estimates around, you know, those projections, and we feel like we're as comfortable as we can be with them at this point in the year.
Speaker #13: That's really the biggest driver. We've taken into our pricing for the upcoming year all the changes that happen in market morbidity. Last year, our expected increases as people are leaving the ACA in '26.
We felt like we have.
Were as comfortable as we can be with them at this point year.
Okay got it. Thank you and then maybe for those 400000 of them as they expect to roll off by the end of the quarter.
Adam Ron: Okay, got it. Thank you. And then maybe for those 400,000 members that you expect to roll off by the end of the quarter, what do you think their 2025 MLR was, and how would that compare to, say, historically, what your members that rolled off would be? Thank you.
Craig Jones: Okay, got it. Thank you. And then maybe for those 400,000 members that you expect to roll off by the end of the quarter, what do you think their 2025 MLR was, and how would that compare to, say, historically, what your members that rolled off would be? Thank you.
Speaker #13: We've billed all of those things in. We've included a trend that is higher than what we've seen in the historically, but relatively consistent with last year.
What do you think there 2025, MLR was and how would that compare to say historically, what your members that rolled off with it. Thank you yeah, I'm not going to dimension the specifics of those members.
Scott Blackley: Yeah, I'm not going to dimension the specifics of those members. You know, when I look at the difference between 2025 MLR and 2026 MLR, it's really a story about the changes in market morbidity on a year-over-year basis. That's really the biggest driver. You know, we've taken into our pricing for the upcoming year, all the changes that happened in market morbidity last year, our expected increases, as you know, people are leaving the ACA in 2026. We build all of those things in. We've included, you know, a trend that is higher than what we've seen, you know, in the historically, but, you know, relatively consistent with last year.
Scott Blackley: Yeah, I'm not going to dimension the specifics of those members. You know, when I look at the difference between 2025 MLR and 2026 MLR, it's really a story about the changes in market morbidity on a year-over-year basis. That's really the biggest driver. You know, we've taken into our pricing for the upcoming year, all the changes that happened in market morbidity last year, our expected increases, as you know, people are leaving the ACA in 2026. We build all of those things in. We've included, you know, a trend that is higher than what we've seen, you know, in the historically, but, you know, relatively consistent with last year.
Speaker #13: So we feel like we've taken all of those building blocks that's going to impact utilization next year into our pricing. Which gives us confidence about our ability to return to profitability next year.
Speaker #13: So we feel like we've taken all of those building blocks that's going to impact utilization next year into our pricing. Which gives us confidence about our ability to return to profitability next year.
When I look at the difference between 2025 MLR in 2026, MLR, It's really a story about the changes in market morbidity on a year over year basis, that's really the biggest driver.
We've taken into our pricing for the upcoming year all of the changes that happened in market morbidity last year are expected increases as.
People are leaving the HCA in 'twenty six we build all of those things and we've included.
A trend that is higher than what we've seen in the history, historically, but relatively consistent with last year.
Scott Blackley: So, you know, we feel like we've taken all of those building blocks, that's going to impact utilization next year into our pricing, which gives us confidence about our ability to, you know, return to profitability next year.
Scott Blackley: So, you know, we feel like we've taken all of those building blocks, that's going to impact utilization next year into our pricing, which gives us confidence about our ability to, you know, return to profitability next year.
We feel like we've taken all of those building blocks, that's going to impact utilization next year into our pricing.
Which gives us confidence about our ability to return to profitability next year.
Operator: There are no further questions at this time. Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.
Operator: There are no further questions at this time. Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.
There are no further questions at this time, ladies and gentlemen that concludes today's call. Thank you all for joining you may now disconnect.
