Earnings call transcript Q4 2022

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Operator

Good afternoon. My name is Regina and I will be your conference operator today. At this time, I would like to welcome everyone to Oscar Health’s 2022 Fourth Quarter and Full Year 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. Instructions] [Operator

like Corporate over to Development conference. now Vice Cornelia begin turn of President and to would to it Miller, the I Investor Relations,

Cornelia Miller

you, plan, earnings to call, you we’ll discuss our everyone. our Thank path against total quarter around where good our InsuranceCo execution us and annual fourth XXXX joining expectations for Thank year-end and our and Regina, our co-profitability. for evening, profitability,

host ir.hioscar.com. Chief this and Co-Founder Executive and Relations Financial Chief available also Officer which earnings Oscar’s accessed and Relations will of in call, Mario our Schlosser, Oscar’s Investor release, are website. results can be afternoon’s Sid Officer; management can Full which Investor Sankaran, found commentary be our our our additional through website details at on

the results that Litigation constitute including Form discussed from differ including meaning under filed Oscar our within the ended period Annual Harbor the about Form on various for Actual the Securities those the a by Private forward-looking remarks XXXX. statements may makes of of statements forward-looking Safe XX-Q as filed factors, provisions those result quarterly materially the of indicated report Act on be SEC. in future quarterly important XX, with SEC, filings the Reform Report SEC the XXXX other XX-K with and to September our our with those Any

subsequent events may are current today. developments on expectations anticipates statements and based that forward-looking estimates of Such to as cause change. Oscar

to any to in future, disclaim the While update obligation forward-looking point some so. we the these company may statements elect at do specifically

most found press on which the of refer A also fourth quarter measures IR can available to be measures. will in reconciliation The GAAP these is company’s the measures to comparable non-GAAP website. directly the XXXX release, call certain

the to turn over With CEO, Schlosser. to call our Mario would like that, I

Mario Schlosser

thank you, call joining everyone, Good evening, the for Thank Cornelia. you and today.

story to full on provide get we like XXXX would I our to to some Before year dates. results, context fourth quarter and

For Premiums. for compound we seen Policy have XX% the years, a growth annual past Assumed rate and five Direct

medical by We XX improved ratio points the approximately have loss since XXXX.

increased Score periods. has Promoter points Net with Our same than more time the XX

members access to care. get urgent first were Our free the to virtual

more primary $X medical and made them group get medications has list care has $X more of members virtual for been our affordable importance care. Our helping drug our preventative

today, the Fast company. for quarter forwards a year to the off transformative fourth capped

We about about is growth more and milestone a while have and monumental – how member impressive what’s how we we million have us XXXX We doubled that how crossed business. impressive, a that year the talked for talked X lot nearly membership of was for growth. the managed is

expense To under be key pressure cost heading would in knew to that three into the people, to the our MLR at deliver and technology, membership management, management. these put on our operating our meet our required medical operations, all objectives, challenges, XXXX, our the ratios. portfolio at step we organize scale target change admin cost around of and that and We us sculpting focus company

plan, we the profitability. results company out applied in areas we against the set these our to throughout year and gathered were able for learnings show, end the to As for year the we position execute business our

medical welcoming ratio care little processes about, a to management, by and knew the We doubling we medical technology new look despite in number loss in and take spent XXXX. points first at of XXX for Let’s applied of and managements. scaling that basis cost size large members we the social best traditional year implementing the our reduced managed XX% also a or our the hitting efforts medical

cost higher to localized managements. thoughtful policies mitigation quickly drive and to medical invasive, utilization strategies. targeted We reduce able model by changes to cost supported readmission more by We medical more regional case realigned were more rates respond operations to hospital procedures developed trends and and effective of operating a less against we

drugs. member engagements managements our our quality, the costs deploy we member site allowed XXXX campaign and highest applied cost of lowest seek for of make us very cost We also course care believe the we’re and that members We bringing for further in what down campaigns engagement options to else to progress utilizing the medical our to strategies here our medical ensure team model builder’s develops XXXX. for will in capabilities, excited and in

high-single average seconds we margin on levers our portfolio the our book. into and heading overgrowth of prioritized digit took sculpting, to regards across XXXX, increases the With rates strategy we in IFP

certain model operating with partners. restructure enabled to and costs, unit us localized markets, has drive Our our provider in also reduce quality our networks improved

our scalps both our designs of as to allocate ensure to places and terms we and markets continue plan view We attractive portfolio in capital in most most we sustainable.

This expense ratio challenges admin company we the improved bringing the managements, down as disciplined costs. throughout well as As a cost us automation insurance work, service took we up for tackled by XXXX. our leveraging basis lever, points defines admin to well increasing our our of operations third included Throughout operations administrative year-over-year. clinical our technology customer which very across which approach fixed set XXXX, XXX efficiencies our has

costs and history, related cost targets better us coming efficiency that a IFP lower cost in of into a already population and with enter and decisive XXXX other sights we positioned the ever moderated the structure. our of As have returning the needed book of portion XXXX base. and with XXXX, our part to also margin of into work member took greater our side, we to year achieve the we much book our acquisition on line this before of work, we of cost actions cost app the completed have Overall than consisting and our members

they In going efficiency our continue summary, can and to opportunities we be scale proved forwards. technology for

builder tech this resources focus less platform now results insurance our all that of will Net growing high on XX. all-time that impacting also In operating Score near-term the focused continued expense. signed +Oscar an is we our their power have while to did expect campaign revenue, the we on to first operations, be first this being said, We a leveraging +Oscar means tool which delivering during value-based utilization quarter standalone care majority Florida Promoter manage and and drive campaign deal medical MSO, XXXX, we of South care company develop of with based our primary module builder,

here builder as deployments is intend grow at XXXX thoughtful modest with insurer execution a successful rollout our and in initial campaign We build to pace with a we muscles our clients. pace

think even increasing +Oscar longer-term, markets. about insurance we profitability bring on in focusing tech and our to the capabilities we efficiency As can business our believe we translates to better that will

our XXXX, to And changed about continued we members and over a internally maintained magic, engagement channels before hand from call to reach. added levels have I have This has us high who it with talk to the engagements. grown Oscar I demographics engagements for perspective, differentiator of want in to harder be historically we part to of Sid, digital as we member to company our our a and membership increase been like

compared XX% enablements, drive rate nearly members to SMS targeting campaign for those campaign would email that XX% a into autopay. their If yes members plan of a X% one responded in to example keeping about autopay then similarly activated saw we active non-digitally and XX% plan renewed that rates their similar ultimately engaged and get you about same a to renewals and here, response campaign launched

to aligned our provider real-time exciting begun engine leveraging lower total data our providers provider told are more relationships grounds our and co-creating some we that more well. most partners we have, made the on investing cost care. improve bring campaigns and use our to be the to here deepen with closely this partners to We towards of outcomes We provider with to we’ve and are strides member tools to you as we engagements our

For XXXX piloting we care these example, quality and on visits, campaigns. campaigns focused annual gaps other spend wellness closing

demo campaigns to a I In site, these and fact, scale with our Yes. XXXX click. and nuance clearly, are technology we our on IR as think excited you ir.hioscar.com of to there this can Go right? And well. see

and to the for get cash achieve the business. successes is for a XXXX in roadmap that here organization business XXXX and the profitability in across profitability enough in the in insurance lot XXXX. there which better this profitability hit company momentum of we XXXX. have will our to total year, clear the XXXX execution a before goals think us There’s his into walk got for plan a part discipline we than remarks. believe us are ever based gives once positioned prepared we in very believe through we Sid And We’ve strong we And you on in

hedge segments insurance projected like the be in ACA in individuals growth Oscar are that coverage Fundamentally, any buying we the also has to well environments positioned what shifts we The and consumer to and hit for where in XX to is continues employers. million near-term, growing value increasingly greater ratesas another fastest and the marketplace health choice the a power. enrollees programs increasingly signal see offers unique individual company

these the XXXX. excited line in tailwinds, With market are to growth we top return

on the let detail. numbers will through Sid me in that, with you get Now he and here more walk

Sid Sankaran

of good evening, again. Mario, back be and I’ve Thanks, reconnecting with enjoyed and It’s you all everyone. great to

largely solid which year discuss consistent range. greater few full last performance in for targets, a year’s expectations We a and our believe I’ll results were with XXXX XXXX Our in our detail guidance baseline moments. offers

increases SEP billion the growth increased premiums XX% year with year-on-year. million by of premium higher. members, XXXX. robust nearly year policy driven membership drove rate half results, and direct as plans, and growth direct rates well growth assumed the rates shifts the XX% Turning Full a A lapse policy to to mix improved membership, in and reflecting of we higher also X.X to premium significantly second assumed $X.X higher ended as

XXXX on COVID our as total year-on-year program. XX.X%, cost Even well with as mix medical membership our by primarily costs, improved sizable execution ratio points driven to care lower of our basis loss and growth, XXX pricing,

year calendar MLR in prior negative the year, development would’ve million XX.X%. of the been $XX Excluding

annual MLR quarter of driven as XX.X% by Our year-on-year, XXX factors same largely basis MLR. the fourth improved the points

assumptions, favorable points favorable higher improved more adjustment operating to includes on favorable offset coming offset driven have by projected. part spend basis XXXX our cautious enhanced the development been our intra-year total risk scale, year-on-year million in leverage from trends efficiencies expected expense view $XX offset driven by claims our XX.X%, admin professional administrative by by utilization costs, However, distribution trends reserving InsureCo to growth. given admin higher relative inpatient ratio benefits quarter XXX to of Overall, by RX than than expenses. and our pricing our with in better partially and partially Switching in

discuss of as the mark in guidance, we’ll As distribution see water expenses. high we XXXX

XX.X% just mentioned. XXX I to items InsureCo improved admin Our fourth basis ratio the quarter of due year-on-year points

improvement of ratio, was of basis driven XXX.X% Our metrics. overall the each admin in the year points sum an year-on-year combined XXX improvements ratio aforementioned the of MLR and XXXX, the for full by individual our

We believe of with of our growth, of our power coupled top through disciplined nearly the improvement Oscar’s model a sustainability margin execution five plan. points business demonstrates and line

Our includes adjusted year-on-year, holding an primarily due company, which XX.X% improvement admin leverage of expenses in XXX XXXX, basis efficiencies. to points scale operating expense in our and ratio, was

the admin an was quarter, ratio points basis expense For year-on-year. our of XX% fourth adjusted improvement XXX

our the overall which for million adjusted of to profitability, fourth our well ahead savings in full year. our our for income range the to company Moving our cost admin EBITDA line XXXX, than full higher better investment as most was $XXX was expectation This was size manage than net as initial with due guidance in XXXX. recent year we the right as headcount tightly to quarter, expected loss

adjusted reflects percentage loss point of a share before as improvement year-over-year a reinsurance. EBITDA X full quota The year premiums

was premiums. million, improvement higher quarter which percentage of driven a $XXX ceded Our was adjusted fourth increase year-on-year, a loss The by an premiums largely EBITDA point reinsurance. year-on-year $XX reflects EBITDA before of fourth adjusted X quarter as million

billion the $X.X company. the ended cash Turning including and investments parent total cash and of the million we sheet, investments at $XXX to balance of year with

million. exceeded of internal the Our of approximately with by targets which surplus, and $XXX subsidiaries our year capital end $XXX million

maintain order in also threshold capital targets we internal ensure higher we that Note, a a than regulatory strong our is balance sheet. to minimums set at

reflected XXXX, to continue XXXX and is to discuss core our As intend our executing already we’ll margins in improve we disciplined today. to This which are and on plan guidance, look to we be profitability.

reach actions for and profitability. targeted has combined premiums continue to outlook stable EBITDA to continued driven year will adjusted reflects meaningful by with taken Our largely year-on-year improvements, company and ratio the the implement

Specifically, we of our XXXX policy flat to XXXX. and prior assumed will expect the our is consistent be direct between premiums billion. billion $X.X range and membership $X.X will with This commentary, largely be our but

to regulators state do in with half reminder, that new in accepting And As proactively expect first year. the we a we Florida. pause therefore new work of the members enrollments in not

in of it’ll begin be in SEP book the favorable lower our redetermination We to year. states Overall, however, be members projecting a premiums. the we’re members Medicaid the receiving overall second portion This early expect a should to of to headwind MLR, beginning net this rest quarter. our as

Our the total rate expected range midpoint to driven XXX ratio care at increases, basis mix cost of reflects of improvement medical shifts year, XX% programs. of by points loss XX% and versus last management over

albeit We in example our more expect initiatives. of a are look year, XXXX, will meaningful with slope. our of modest our PBM one in MLR contract, renegotiating cost seasonality will beginning result of and similar an which We as last care savings to do

due basis to savings have discussed achieved at scale. largely primarily be consist increased will XXX Switching lower by savings distribution of previously. to the vendor expect savings These identified we points XX%, improvement we reflecting year-on-year admin, ratio an midpoint, admin of and to the cost expenses our that InsureCo our XX%

Importantly, we the our XXXX are majority and savings turning efficiencies of a been already to further these beyond. achieved. generating for attention result, And have as

XQ our than highest are We ratio quarter admin different a a with call be XXXX declined and gradually year we and that targeting from XXX%. last expect out the at We similar. first the for less fairly throughout or with would XQ will combined ratios seasonality year

margins We on as use core the this execution to and we assess profitability. primary are entirely here focused business remains metric

will insurance our better understand our company. capital investors of to and the metric our share our better includes metric, the and introducing EBITDA, subsidiaries insurance InsureCo order allow dynamics In income investment our cost subsidiaries quota investors of new between the which understand their We reinsurance. ratio, profile, profitability the cash we’re to and flow statutory this and believe parent allow capital underlying a to adjusted relationship combined

market startup Unlike longer X% on our our portfolio competitors, duration had given to our investment has yield yielding historically not portfolios relative more. Oscar nature, had meaningful who’ve competitors or

income $X.X have normal the at our in InsureCo return on is cash expected XXXX. environment, XXXX We investments a more ended billion a to investment in impact of the With interest rate significantly positive profitability subsidiaries. to with

the and cash in for yield curve. with XXXX, For will X% of portfolio year Fed to actions we the range are shape on our estimating investment the the X% of X.X% yield depending

contracts we effective a our required while restructured quota maintain year-on-year to the similar deposit accounting have also ceding note share respect With our I’d one-one their reinsurance lowering percentage new agreements, share cost. our quota to date. contracts that quota upon share

amount you’ll So a reinsurance in forward. see premium ceded going diminimus reflected

Incorporating all for company. capital our solid these and insurance items, we’re positions earnings projecting

outlined. savings projected XX.X%, $XXX to company we points entities. the million will expense the admin basis project largely XXX million XXXX, For resulting due our XX.X% ratio midpoint, of insurance previously adjusted $XX across range year-on-year improvement total cost EBITDA profitability of be to to we adjusted Switching our at co, to an in an

admin generated modest revenue we was XXXX, services a margin. bottom-line and In $XX million

and First related amount income, fee receive the no a modest costs. while of For occurring we Health agreed transition to will arrangement XXXX, terminate further

million $XX to For expect arrangements, positive +Oscar in to our a fees ongoing approximately generating we our million of results contribution XXXX. $XX

as by as meaningfully with adjusted EBITDA million of driven year-on-year loss an million $XX income at projected rising margins higher largely $XXX core midpoint, well million Our interest our the underwriting improvement in $XXX of improvement rates. investment to range reflects

of strong approximately EBITDA a guidance which fund expected to including percentage balance ceded is and investments. total premiums sufficient to of with liquidity next We reflects case, parent the year-on-year. midpoint in the have believe The profitability, and cash year the reinsurance base our we improvement company enter sheet before year. million five as of cash loss company adjusted $XXX points very In we

free Specifically, the by limited subsidiaries profitability. adjusted we with EBITDA flow expect insurance company potential XXXX capital our contributions in to in driven our upside insurance cash

net due This growth to where we is our subsidiaries losses. infused improvement substantial a from into and $XXX million XXXX

As for the holding future asset. payments company. be earned at our subsidiaries there from deferred taxpayer expect our become foreseeable a subsidiaries insurance company the holding to We reminder, our not sizable cash the a given tax tax do profitable, upstream as to

insurance Given use holding primary costs progress now net substantial company. profitability, are on of company our the company funds for our revenue the of

previously, As profitability we co total XXXX. are targeting said we’ve in

remarks. me for back With closing turn that, let it his Mario to

Mario Schlosser

I close [Indiscernible] thoughts. data a some so will out very with simple positive. company dramatically The for has equation changed risk the towards

there. expect will other industry to cash the to We in get done we are work incumbents. us line We’ve profitability projecting we and loss bring our next enough full down with year medical company ratio have

on line a us our at are Our set for took We that this in plan. up admin with costs the down future. year margins membership sustainable coming

differentiated and are our members own to have in infrastructure in the in products remains alike. has country proven insurance being differentiators. those attractive We engage that scalable massive advantaged markets a and the fastest and ability brokers members, with Having to growing clearly our

and are continue There find we this that get more infrastructure. continue where to and top to ample in build coming We efficient of even very runway year. to builders is will and exciting on focus personally it I is to the automated

So know that continue we simply be plan the what straightforward. needs need the we to are is XXXX path to on. on We done,

close, on so of been Oscar committed building employees thank I few who’ve the I’d like to Before years. the the momentum to past

and ambition an even greater great have We team.

call. And Q&A the the let’s portion turn with over that, the of to for operator

Operator

Morgan from Stanley. [Operator Instructions] with Please of question ahead. come go will the line Our first Michael Ha

Michael Ha

Hi, thank you.

on wondering was vendor you already And efficiencies. have now about year of were lower a magnitude you’re incurring mentioned upside and whether opportunity that majority How think the talk you’re expenses you further First, I you focused scale. yield think and for could should earnings? And those savings modest that targeting distribution presents How understand to what are? these if on of mentioned of I I these stranded achieved savings about savings this also costs? and I So from could increased costs. we amount transition related Health efficiencies think additional

Mario Schlosser

Yes, Michael.

second sculpting there. really know will across and Let the the XXXX our But across we three doing tackled operation, we any what – automating managements more, in of the we and nicely the every all think, and view these we savings these across me sort point automation these Start and errors in portfolio operation, in cost from additional the can scale admin, point first also in in medical of point the we the collection both levers is vendor, about with have and These of of question. the types of take of I billing more pretty Board these, can on we view back you I claims the of issues operation. across of now, then happen growth, [ph] talk Sid view think from question are part the to can killing whether occur high I how you now as we eligibility future much be do way in chart front things further scaled other still Where membership or more any vendor like this side, admin scale we’re vendor across lie go. things more to and of future footed lot there, we conversations. contracts contracts renegotiated that. management the there, room medical like PBM a three my have is

question status, Sid, and ping service lot customer systems, the about we’re it’s sending customer on sites. a the real-time things supporting like costs. can on systems provider eligibility, sites the more that maybe into An automated our transition through service whether example that, this claims service directly conversations and last second year

Sid Sankaran

there XXXX with some Michael. Really we runoff that. runoff wouldn’t respect in Appreciate expenses, Yes. really to services beyond and Sure. the in modest question. wouldn’t performing expenses to XXXX. We them expect Thanks, is the occur comment

Michael Ha

Florida’s not if And in of one central I more capital the squeeze in, you. most if Thank it. one think Got I could mistaken, states. I’m

for I in think first first Florida the like XXXX. XX% Oscar believe requirements are five back but I the statutory something cap enter years,

of with is true? wondering be drop the that what nearing cash capital might be back. would presumably you was statutory receiving would your decent XX% so, chunk So and you’d cash I get Thank to thereafter? so that, timeline XX% that if requirements you. or And end the a on

Sid Sankaran

that. for great you thank Yes. It’s again, Michael, Well, a question.

regulations of would year. seasoning the requirements read statutory the effectively consistent and Your end run startup of is ours through with this those

we efficient mean Beyond think as our that, I of organically the a said, in have potential for Mario lot some growing structures. company capital we of more becoming

of as absolutely And think but call that see potentially. would course that, an you’re out upside that, we so right we’d evaluate that I to

Operator

the next Our will Jonathan Yong Credit ahead. of line Please question come Suisse. from with go

Jonathan Yong

may members thinking assumption taking thinking up have to my question. that for kind the how MLR end an books coming you’re you risk and on from actually Thanks. the hit of thanks gain recaption. want many in that redeterminations later of you their pool I about year? and you will the how how your just Hey, of about think redeterminations members Do are you to you on

Mario Schlosser

Jonathan, to the want anything free. I’ll if Yes, Sid, first maybe feel you part, add take

So pricing levers XXXX. course. estimates of One these, have the for made costs. guidance other around we premium of also is is both and the Overall assumptions the one redeterminations in on in in growth, two there medical

and increases ACA and market on. neither not would premiums size market – thing. would either attractive nor say is material in anything call so have Generally, effects I even I to side that premiums more We’ll loss a the stable making great ratio. medical the the in

So clearly thing. I a is long-term think this great

timeframe obviously expect start growth, else what clear it not comes over in. clear to have come will is When The quite guidance. in we still It not states April. needs they to given like everybody

month based, based. over say the others I Medicaid each linear, of rolled quite population into at actually When the go when we members roles, time look year. Some those states will would

to and bulk to it’s months. but it’s won’t month nine going any of happen see happen in to in any potentially six there, XX So in particular months kind Florida going we months think Texas has said coming they said

in in we differently expect there. of terms different states what could quite So

participate Florida in because of limitation and in don’t to said, first year in expect we then. membership as the this until In six the place the Sid months for brains

so when the on the higher have risks then the on that’s in what share to already we others likely we the market, And loss be is these which than numbers the ACA. seemed pick ratio have up medical acuity that participates sides, will

And clearly, well. who as risk members the special come in have partially enrollments But adjustments. come of as headwind we they with know

As this with then of XXXX we talk in after that. the do we’ve about year look in again who sort throughout the get else and members like the results, past, much penalty reaffirmed come everybody special enrollments, that in pretty you’ll MLR

So again, and for the close sides by projections quite the long-term for for sides both – out MLR likely but the XXXX short-term saying to the great markets, immaterial quite growth on us. MLR headwinds, on with I’ll

Jonathan Yong

be And all the that automation investments about require your current for or account would that and in extra on Great. XXXX further Thanks. does investments? of you Okay. would for need your operating on were then order no that just talking that capital needed some for any improve efficiency, planning to there’s

Mario Schlosser

planning based cash XX terms plan laid us profitability base the Sid No profitability very is of us. XX, talked and following really with current essentially extra capital on about our InsureCo in plan investments, out consistent everything case all we total is

be to really in the of investments. we so of fact tail end expect multi-year a bunch whole And at

sort there. the the cycle last being end essentially of fine the investment of For building we’ve it’s example, kind component the still of claim at really system tunes been internally

answering. exciting very that that’s system because is us the to that And already is one

We and and on have and stuff automation. member lines provider and like some eligibility various claims and facing questions facing that look service more

can think these get in of all I aspects. we

Jonathan Yong

Thanks.

Operator

ahead. Gary the Your Please go from with line of question comes Taylor next Cowen.

Gary Taylor

Hi, good evening. Couple questions.

just if year-end? in you do with the release. see tell where see you enrollment at to us, could one First guidance start XQ mean, wanted I I didn’t any I landing enrollment and

Mario Schlosser

Sid. Yes,

Sid Sankaran

think the I haven’t we out called guidance. Yes, explicitly that obviously in

with highlighted I to membership, expect respect be year-on-year. think think we roughly we membership to stable I that have

lower we overall as of members, to book. importantly portion point you SEP projecting this, overall a are to We the are

And reminder, commented tailwind as Mario to as MLR, Medicaid positive member will think months a but redeterminations. in year-on-year, I result on that nicely the lower a

is, of all of have it Assumed net-net we’ve premiums month dynamics than slightly the that’s driving modestly to Direct what’s year-over-year. and and So through we’ll the that different Premiums seen flows member really as down

Gary Taylor

quarter of we enrollments should has Does thinking that first sort from through stable? the backfill business year, sense? we think – would should But make that redetermination and normal more be the some attrition the that

Sid Sankaran

I mean business there of initiations. normal some the in Yes. lapses effectively if churn you by think course offset book, is is which the there,

of year book be One new been year. expect is we’d we’re a key smaller they will here just calling proportion out than points the SCP in to be because initiations the lower would’ve historically this of

Mario Schlosser

how trends, flow generally up guides. market we share the we we open that’s Yes, have special that see an whatever and enrollments through the enrollment set well, as

Gary Taylor

was just agree. risk adjustment. go one And my I second into then

be when there proves what next MLR really sound. accrued a of final If here on bringing sure. be to the great performance risk year-over-year to we honest, that, premium basis doubling adjustment point for you’ve think I actually enrollment and be down your June, do of to settlement proud is

in conservatism figure know in the And how suggested just the XQs. I little just a up for you’d that I to June. wanted more and settle year-end at address a chance booked think give will you’ve where you’re just you you and to

Sid Sankaran

at Gary, Yes. point be judgments final Well, to point. date we’ll mean will the able June obviously final I your I think make and be in out that key highlighting

just marketplace, the the given be in cautious. thought to prudent be dynamics think would it I we

certain carrier think in I particular half second the saw in including Florida. exits markets, in you certain in of the year,

to And years cautious thought we risk. be some that’s overlay and judgment been that little always to so have be that on might flagging prudent open than But given prior. risk a we we more would adjustment are it a in

we’ve we so think it. been And about thoughtful

Gary Taylor

what I using InsureCo was quick definition you’re XXXX could, more EBITDA the if under One forward? going

Sid Sankaran

Yes.

analysts at what think think but helpful about think I haven’t and going investors back disclosures accounting that, this we to forward, you. purposes, think point, and we to as could about I just we’ll come there for financial disclosed be

so I company think with would about line I if the are company, into to had you’re costs reverse and holding estimation, the think a you that holding that sight tell out. you of come up is good what you’re effectively engineering trying

Gary Taylor

right. All you. Thank Yes.

Operator

line Fischbeck Bank Your Please from Kevin the next question go America. with ahead. comes of of

Kevin Fischbeck

excluding income. I trying saying make to you were breakeven you to than something even that calculus, breakeven of you wanted onto? part investment catch like the just part I Or Thanks. say that’s a bigger you dynamic with always was thought sounds didn’t of Great. what Street the understood been – like just how it sure year? Is to going is getting tailwind would’ve you’re the comfortable that are you be. that’s think about it’s It this or that to that

Sid Sankaran

think a I’d reiterate of I points. couple Well,

about As profit, we targeting combined than underwriting a less our think ratio we’re core XXX.

So to want really second and we obviously margins the to subtle measure the a pure net compares metric try at making comparisons use peers. business. how analyst margins, that do gross the core, and investors that’s ultimately as is were We of what to point externally

have been has Our over are de given years, the been competitors investment investment income our being minimis X% had startup yields. effectively effectively while a

model would now competitors. have you’re normalized, for going able rates you similar to at So some now be interest include your the other in to investment in income to Oscar, what ways use

anywhere that’ll given from our We this year we’ve to X% bit think case, about be little X%. base a X.X% indication. And in of you an

guidance. look duration versus would now other I the in look I what think like call great obviously normal normalizer to companies, our when kind And extend this – so people more us we of insurance for a and at is results that other structurally that’s with ability

Kevin Fischbeck

you the year that then to guess line we I pretty think quite But big actions? million than think start from grew year this of you are won’t size profitability? quite make or grow That’s industry you earlier. transition over faster still a a another when growth $XX those flat All two? we for in to yes, should about you guys year. with a time. for membership to Are done because industry growing the still or fast right. things or exchanges we as about all And is industry rate that the final Are mentioned the there well say, Should actions the as the we where Great. mentioned this guys

Mario Schlosser

growth Hey for Kevin, we’re long-term not from moving so a away you once thought have goal we that. say and

up mean actions enrollment, there company. you that a of power have about. growth of last would’ve the I I in is stored taken we some of talked That So lot think even come more in through not the

growth target mean the the I – have our outgrow we think savings really talked as well, that market overall and we markets expansions I year. would goal. that’s long-term and about that’ll And to the area continue of think would and next through will do process our – are service actually like things and for we working through be the that’s already in thinking

for the out prior in back best sustainable we’re go of best profile where going playbook we in best – That’s places because in. grow responsible in. we’ll So various figuring the also we against, with the can we’re have profiles margin back the amount essentially grow And we sure. to with which we’re reserve regulatory unit still we a can sustain as about, to Sid margin of can talked capital costs of not good years

filling tackle mentioned we’re terms be portfolios certainly those, that’s next going to On of local that, on are at sustainable excludes high providers of of of and to model see But that not like are us very I we bar really members, not the give feels sculpting. good business, would top and ourselves continue so a then working, we’ll work those. other those we thing year. they If happy we that’s builts brokers where it’s I continue hard don’t now where to because something who And areas in generally growth, to look is in for I’ve see if happy continue and with think course, we’ve to look closely. in in want a work

Operator

come line Research. Please next Our will question with go the from Nephron Josh of ahead. Raskin

Josh Raskin

reflective make question. MLR the in And or of to points asked guidance XX, to XXX-ish needing techniques how medical trend? to sort kind question there’s took sort just that turn actions sure in of cap of taking Hi, improve that Good relative basis is that Florida, overall down Midpoint evening. that membership and you light of there. to much of Appreciate the off How of call year-over-year. of I management much no of is of pricing thanks. it mismatch

Sid Sankaran

Yes.

I which there’s hear excess would don’t very nice in certainly one. element I which contract savings think that rate in Mario the Josh, across business secondly, MLR of the to disciplined, consideration. think, the words. take I I’ll the trading trend the as use say, growth was was frankly, embedded there’s your from such think think high view in plan. for PBM I I you. year, this key And there profitability increases to is we our any pricing We single were a mismatch I mentioned. off biggest mean, markets dollars I digits, I real obviously, – highlighted, of think

rate to above increase the MLR along us on renegotiating That We’re be that to really pushing want is trend. where with we side.

Josh Raskin

$XXX costs And corporate was Got about guidance about it in how What of we like of thinking looks you. million XXXX should parent XXXX? Got or that you. after sort sort number then of be overhead. and that level implies

Sid Sankaran

Yes.

that the we think is start you you look I point, to answer this first decomposing Surely, as begin when management to down. versus think surprise on focused we’re won’t very us at peers. that expense I

we’ve today. of acknowledge questions on if some to heard progress and think now think Clearly, I Mario I competitors, really folks you’ve appreciate you and what meaningful at made to comments myself the why I look and relative that’s the Oscar MLR, and have and to that you operating you are management with Alessa, our company to continue forward. cost model focused of line, rest better as of we cost us out absolutely on leverage get the and Scott the should the I base and think certainly expect team from

Josh Raskin

MLR heard out a development But point anything And for I prior looking better MLR of would call the question were quarter? the don’t the can’t of know development without – for. the year. quarter. than this, probably believe it in I bit utilization other reserve came period we else anything were I terms any, little the we to end on if there relating trend in existing made you to towards the current

Sid Sankaran

quarter. Nothing the for in particular

year savings the look the mentioned, in I at in was year professional inpatient anticipated better that the utilization, I than higher came price we in came had think for we as for. than expected. RX as

So we spend, and tailwind our there’s is been PBM a lot forward. of results for contract, around focus a why element our on which highlighted drug we’ve nice think our is care other which this go total as cost renegotiating we of PBM of

Operator

Our Please line next Sachs. from will of cut Rich question Nathan the with go ahead. Goldman

Nathan Rich

you And also return Great, would I you kind or the for view questions. be MLR on laid to reach to I’d guess curious where of as get term the MLR thanks be the improve building from business. for your the to path XX continue out look to to Maybe growing needs comments it to think potentially that growth, MLR you the you question. kind of the just of just in the range first either last keep to expect membership? profitability while longer

Sid Sankaran

want that we our program, we’re has Certainly as of What we we implications care with forward work to I sit we with on generated here we margin the actuaries. as still as there’s for targeting think some be the XXXX, below pricing I business? of I expansion. And cost Yes, that our think in really work made more do proud for all means the we’ve look at look are savings XXs. total to progress off, as benefits MLR would to real respect think first then again, today,

company all And really and the chunk components better resources of of of cost the focused big there human so capital a on kind is medical management.

potatoes and managed we’re and focused the team unsexy you, think I And tackling that’s but is think a may that entirely Now, of confident to sometimes company. there. that we sound can bit it’s care we and running blocking on why the get meat

Mario Schlosser

it’s have – we’ve market, price. that’s now and of in this does think been really When you for management market unit I don’t with work. that on purely have the not Yes, the else it’s the and almost leading just cost, anybody don’t clear this you – longest so quite

pricing a certainly think not the don’t days, market those We’re way. to back to from and either, going perspective, will go the by

this we a will we of huge in with XX-year with retention, us, in to can us. potential a modes those build around risk time matter the markets, So and still. amount have is We which networks members who providers. over share longer be can think longer providers markets who want of those for I And build will growth

win and side therefore, to not low-XXs somehow the MLR price trying And back wise the days so of previous to going there. on

Nathan Rich

the wanted on guess, on adjustment with ask do would expect like a follow-up you questions to in I feel visibility better payable. up the on could, current be that this guess, to business year? I guess, the I the year, that? I quick when receivable if And for And I Gary’s following just of you growth you’d Great. a you position – get risk kind think slower within I

Sid Sankaran

but we as modestly we a big that similar, would a in for of given pretty forward. of is And pretty have anticipate in are that look comment we the prepare Oscar Well, focus position, adjustment lost I us, nature important first to would that really receivable wouldn’t being down its assume is coming remarks, in our may membership the the risk be an mean, stability membership. payable area to has demographics is point time which this level and you had been this our

And population, on strong so population. data the membership we we know that have

And so perspective that’s we think volatility. beneficial actually reducing the from

Mario Schlosser

of Yes. And another there. data maybe as piece

do. direction. RA at – than higher plans great right work you lower it be we’re well. Our well payouts this that as because in means the claims market participants tiers that with as I not well going into we but in and that’s priced we by think We’ve there. as point for the And just others, right? payer that mentioned, pool, think some moving to than of likely metal it’s other a but But as comfortable receiver silver the– the I RA and are the XXs, which long to have means manage sort it’s other Sid little still in itself been from likely different mix And this a is pool, bit that larger, we’ve the a

Nathan Rich

you. Thank

Operator

will Please Wells ahead. with from question Stephen Fargo. the of final Baxter come line Our go

Stephen Baxter

to some was hoping market questions Hey, of insight thanks. the about Had a get broader couple exchange into. I

potential has today. get sense we’d or you are guys like a and intentional to especially, like The significant to strong seeing market like decision. pool key considered whether this outlook how first obviously I So your been not that membership or improvement changes really anything whole, about you MLR in in XXXX. guys are as the think growing provided guess, a very again maybe risk year Florida of you states the growth

And at it just I has state or on population And has gotten maybe like, a of I the whole, XX% the level, the signed growth that to get or looks as that’s like perspective the X% think there up more around point Florida X% for secondly exchanges. your let’s think like national the a number. XX%

whether what that of is more could Florida think just like Thanks. to happening like a So you states sense time. and what be love other get over in potentially look

Mario Schlosser

Steve, Yes, question. great

the – side things. generally, me think, let Florida of So the growth with we start Florida, side on actually I the –

bigger a welcome It conducive to and population of go in in kits Spanish, go broker we simple so is so our on state the very that think bit I have, of base. answer. very Florida even that in think So driver out is ACA, to out, into the the We ACA, the is XX% but right? population at want very, immigration that’s, being fair this a is I a go active the point, about

working years states in as for of to well. way unique of the brokers very – the past mean, have couple Georgia same And have work that general agents closely and their with and so almost with is I regard. made other been Florida some now we

I are like, actually, some something still that’s folks get percentage in the But latest could this effectively those the brokers have people U.S. going healthcare through in to effective coverage. But the at ACA. think And large statistics uninsured I’m should now. been incredibly finding get of free who put

that. not where told – I so And And in those is by a that that think states in a get the population up in people are other could where been that markets you have seen that Florida. broker sign folks haven’t they they

I there. that’s states happening think the in

continue Going briefly hey, be I’m And who of going a dynamics of to into we in again, to over point out see It’s the the this plenty still HRA before, Florida I mentioned interesting of the that excited to individualizing companies forward. and coverage defined you plans, individual able the could all turn kind are ACA. saying, we’re ways of about health us, another agents general contribution that space. forward, some in in brokers which is growth type very whole growth. wave

Stephen Baxter

Thanks.

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

Mario Schlosser

that one. Yes, about forgot sorry, I

it more in So generally to see ACA risk is you’ve the growth, what had if that score. average the bring tended down you

not make sure And would behind score think you meaning risk this around making that’s scores And that, So generally, happened rates companies has insurance the always year and pool of collecting that Now and in did trends have better down aware race again, clearly you of have things into is the assumptions at that in the written very fall that. all we’re right? market, to recapture risk sort don’t pool tend every expands. the that I like year. year. get of this. comes would risk there when But – if coming We big

of in And to whatever want be so partly because too, exposed we SEP. happens in terms again, didn’t

up, where driven then see drive And recent has the situation SEP but the it coming growth a more in pool members could I down.

before. age overall I’ll also from the But as same. mix that’s perspective So metal before, our I same the average a mentioned kind from of have about it we population perspective say again, as and briefly about just and actually, an

the and same pool watching generally there getting out. be will But coming risk are too to that us the things anything all we that obviously there so report And will weekly somehow run we’re isn’t overall versus markets. us these the concerned with means there’s the

next way happen. the that there sitting it forward always in we will and looking I’m cheering We’re comes to the when And time expect.

Stephen Baxter

thanks. quick super hopefully. And one Okay, then follow-up, just

it PBM impact contract, like, like beyond clarify the there’s be is it should whether renegotiating fully the are I just considering we been to you think sounded has trying impact Thanks. the or am provided? in already XXXX XXXX you that we that or guide on Just should an about done, captured

Sid Sankaran

about always of – And this thank about the I Steve, benefits it’s question. Yes, talked it’s increased you, the scale. we’ve great think

that final, yes, are fashion and XXXX provide in renegotiating in and it’s we beyond. benefits the a And contract will of steps PBM us structured in that so, final

as it So think of multiyear.

Mario Schlosser

Yes.

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

Operator

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

You may now disconnect.

Oscar Health (OSCR) 9 Feb 232022 Q4 Earnings call transcript