Release Date: February 06, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q: Can you provide more details on the components affecting the Medicaid MLR for 2025, given that it is 90 basis points above the target? A: The Medicaid MLR for 2025 is projected to be flat compared to 2024. We anticipate a 4.5% rate increase and a 4.5% trend based on the 2024 baseline. About 75% of the rate increase is known at 5%, and 25% is estimated at 2.5%. The trend considers the pressures from the second half of 2024, and we are only 90 basis points above our long-term range, indicating we are close to achieving our target with potential rate actions.
Q: How did the geographic pressure affect the risk corridors, resulting in no material benefit in the fourth quarter? A: The benefit of risk corridors depends on where the underperformance occurs geographically. In the fourth quarter, despite forecasting a 50 basis point trend pressure absorbed by corridors, it did not materialize due to the geographic distribution of the trend pressure versus where corridor protection was available.
Q: Can you explain the fourth quarter Medicaid MLR breakdown and any impacts from new stores or retros? A: The fourth quarter Medicaid MLR was primarily affected by a 1.2% trend versus a forecast of 50 basis points. There were no one-time items or retros impacting the results. The trend pressure was consistent with the third quarter, driven by higher utilization in LTSS, pharmacy, and behavioral health services.
Q: What are your assumptions for Marketplace membership attrition if APTCs are not extended, and how might this affect new members? A: We anticipate a 4% reduction in Marketplace membership throughout the year, considering factors like SEP membership, natural attrition, and FTR. The quality of our membership has improved, with a 70% retention rate, and we expect minimal impact from FTR changes due to enhanced integrity around agent of record.
Q: How are you addressing the Medicare Advantage pressures, especially with the acquired Bright book, and what changes were made for 2025? A: The Medicare MLR was impacted by industry-wide trends, including LTSS, pharmaceuticals, and inpatient/outpatient utilization. We adjusted our risk adjustment revenue, which is a one-time item. For 2025, we have been conservative in our trend assumptions and expect to be slightly above our target range, but we are confident in our pricing strategy and medical cost management.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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