Good day, and welcome to the Centene Fourth Quarter Earnings Conference Call. All participants will be in listen only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on a touch-tone phone. To withdraw your question, please press star then two. Please note today's event is being recorded. I would now like to turn the conference over to Jennifer Gilligan, Senior Vice President of Investor Relations. Please go ahead, ma'am. Thank you, Rocco. Good morning, everyone. Thank you for joining us on our fourth quarter and full year 2022 earnings results conference call. Sarah London, Chief Executive Officer, and Drew Asher, Executive Vice President and Chief Financial Officer of Centene, will host this morning's call, which can also be accessed through our website at centene.com. Ken Fasola, Centene's President, and Jim Murray, our Chief Operating Officer, will also be available as participants during Q&A. Any remarks that Centene may make about future expectations, plans, and prospects constitute forward-looking statements for the purpose of the Safe Harbor provision under the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by those forward-looking statements as a result of various important factors, including those discussed in Centene's most recent Form 10-K, filed on February 22nd, 2022, and other public SEC filings. Centene anticipates that subsequent events and developments may cause its 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. The call will also refer to certain non-GAAP measures. A reconciliation of these measures with the most directly comparable GAAP measures can be found in our fourth quarter 2022 press release, which is available on the company's website under the Investors section. The company is unable to provide a reconciliation of certain 2023 and 2024 measures to the corresponding GAAP measures without unreasonable effort due to the difficulty of predicting the timing and amounts of various items within a reasonable range. With that, I would like to turn the call over to our CEO, Sarah London. Sarah? Thank you, Jen. Thanks everyone for joining us this morning as we review our fourth quarter and full year 2022 results and provide our updated outlook for 2023. First, let's close out the year. 2022 was a dynamic and productive year for Centene. We took on many challenges, including a leadership transition, transforming our organizational structure, modernizing our approach to corporate governance, focusing on our core business, improving operations and quality, and delivering on our financial commitments along the way. This morning, we reported fourth quarter adjusted EPS of $0.86 and full year 2022 adjusted EPS of $5.78. These strong results came in above the top end of our most recently issued 2022 guidance and were 7% higher than the midpoint of our initial outlook for the year. Looking back over 2022, our three core business lines performed well. In Marketplace, we materially improved the profitability of our Ambetter product line through advancements in our clinical programs and strategic product positioning, delivering more than the 500 basis points in margin improvement we promised, while continuing to show solid growth and market expansion. This provided Ambetter with a strong jumping off point to achieve our long-term target margin and profitable growth goals in 2023. In our Medicare Advantage business, Centene generated outsized growth in 2022, ending the year with 21% more members compared to year-end 2021. Our focus throughout the year was on strong clinical program performance, quality improvement, which you've heard a lot about, expanded value-based care relationships, and providing enrollees with a more seamless member experience. In 2022, the strength of Wellcare's underlying performance was demonstrated through year-over-year HBR improvements, and we're confident our increasingly disciplined approach to quality operations will provide an important lever as we move through 2023 and work to improve Wellcare's profitability on its expanded scale. Our local markets also performed well throughout the year, serving more Medicaid members in more geographies than ever before. Our Delaware go-live, as well as a significant number of successful re-procurements and program expansions, including in Louisiana, Nebraska, Texas, and Missouri, to name just a few, bolstered our market presence and leadership position in Medicaid managed care. In California, Centene was ultimately selected to serve the state through direct contracts in 10 key markets, including Los Angeles and Sacramento counties. We are working towards readiness for the 1/1/2024 start date of the new California contracts, and we look forward to our continued partnership with the state to improve the Medi-Cal healthcare delivery system and advance the state's innovative CalAIM programming. 2022 also marked the first full year of execution on our value creation plan, and it was, by every measure, a success. We hit all major milestones, including redesigning our UM function across the enterprise, successfully negotiating a new PBM partnership, reducing our real estate footprint by 70% to accommodate new workforce flexibility, itself an important cultural evolution for the company, and making important investments in data and digital tools that will make it easier for our members, our providers, and our employees to work with us. We exit 2022 not only well-positioned to achieve our $400 million in targeted SG&A savings in 2023, but also having added $300 million in new SG&A opportunities to our longer-term backlog. In addition to achieving these value creation milestones, we made meaningful progress on our portfolio review process. We closed three divestitures in 2022 and announced a 4th. Notably, in the first weeks of 2023, we closed the previously announced sale of Magellan Specialty, as well as the sales of Centurion and HealthSmart, bringing our total number of divestitures since Q4 of 2021 to 7. This disciplined execution has streamlined our enterprise, reduced distraction, and allowed us to increase our focus on our core business lines. It has also powered significant and timely share repurchases during 2022 and year-to-date in 2023. Finally, in December, we aligned the enterprise around a long-term strategic plan, inclusive of a commitment to 12%-15% long-term adjusted EPS growth. With our senior leadership team in place and the company's demonstrated progress against our strategic and financial goals in 2022, we are well-positioned to capitalize on the momentum of the past year and successfully continue our value creation journey for shareholders and members in 2023. With that, let's talk about 2023 so far. Centene's Marketplace products yielded exceptional growth during this year's open enrollment, outpacing even the robust growth of the total market itself. This year's OEP performance only reinforces our view of the increasing durability of the Marketplace as a coverage vehicle and Ambetter's leadership position within this market. To harness this growth opportunity, our Ambetter team applied a portfolio approach to pricing and product positioning, decisively leveraging our local expertise and strong broker relationships on a market-by-market basis to attract and retain membership across our Marketplace footprint. While it is still early days with respect to claims experience, we want to share a few observations about Ambetter's strong OEP growth and provide some performance expectations given the team's outperformance on membership. Approximately 70% of our 2023 membership is enrolled in a Silver plan, compared to approximately 72% in 2022. Silver plans have consistently represented the majority of our membership year after year, and 2023 is no different. Similar to previous plan years, the majority of our 2023 membership selected our core product. At the same time, we are pleased with the continued uptake we are seeing in our newer products, demonstrating the value of flexibility in plan design for our members. Key membership demographics like gender, age, geography, and subsidy levels are consistent with what we experienced last year. These factors are also consistent with the pricing assumptions we used for 2023 product positioning. We continue to expect our Marketplace business to achieve margins within the long-term targeted range of 5% to 7.5% during 2023, and we are pleased to have the opportunity to serve so many Marketplace members as the reach of that product continues to expand. As we highlighted for investors last month, Medicare Advantage enrollment results for 2023 developed softer than expectations we provided at Investor Day in December. Our goal for the 2023 AEP was to foundationally align our Medicare offerings for long-term margin recovery, product stability, and overall quality, capitalizing on the scale we achieved through outsized growth in 2021 and 2022. In our effort to better control the overall member experience, which requires operational stability and contributes directly to quality results, we made the decision to change our distribution strategy and focus more on proprietary channels. Near-term sales and retention were more significantly impacted by our distribution strategy than expected, particularly in light of competitor investments in channels we deprioritized. Several of the channels we prioritize performed better than expected, reinforcing our long-term view of an optimal go-to-market strategy for Medicare Advantage and dual-eligible members. Despite the soft membership results relative to expectations, we continue to expect 100 basis points of Medicare HBR improvement in 2023. Importantly, we are already seeing positive operational impact for members and brokers, with strong service levels, improved customer satisfaction, and a 30% reduction in overall calls compared to this time last year. Turning to more recent Medicare news, regarding the finalization of the RADV rule, we are supportive of CMS's decision to limit the scope of historical audits. CMS's decision in this regard avoids significant cost and abrasion for our provider partners. That said, the lack of fee-for-service adjustment and the as-yet undefined sampling and extrapolation methodology leaves a number of open questions as to the viability of the final approach. We are working in collaboration with our industry partners to determine the best path forward. Regarding last week's preliminary rate notice, 2024 initial rates are less favorable than recent years and below our internal expectation for funding. We will fully exercise our ability to provide feedback to CMS during the comment period and look forward to collaborating with the agency as we work towards rate finalization in April. We see a path to achieving Medicare Advantage results that meet member needs and support our 2024 financial goals. As we all know, 2023 will be an important year for the Medicaid business. In December, Congress passed the Federal Consolidated Appropriations Act for 2023, which ends the continuous coverage provision on March 31st. This tees up redeterminations to begin this spring, an event we have been working to prepare for throughout 2022. As we approach the redeterminations process, we are focused on three things. First, optimizing the verification process for members. We are working closely with our state partners and our network of community partners in each market to facilitate member transition and coverage continuity. In the last month, we've deployed internal and external training designed to maximize each member touchpoint and our ability to support beneficiaries as their eligibility is reviewed. Leveraging Centene's unique and powerful data, we've launched eligibility likelihood modeling across our Medicaid footprint in order to prioritize and customize member outreach. We've launched enhanced reporting and membership dashboards for clear tracking of redeterminations related activities across the enterprise. Second, we are focused on ensuring that state program rates reflect any shifting of the risk pool created by membership changes. We recognize the dynamics in each market are different, so we are leveraging our data to support early collaborative discussions with our state partners. Third, we are focused on maximizing the opportunity to provide coverage continuity to members who are no longer eligible for Medicaid, but who are eligible for subsidized coverage on the Marketplace. Given the strong overlap of our Medicaid and Marketplace footprint in 25 states, we continue to size the opportunity for our Marketplace products at 200,000-300,000 lives throughout the duration of redeterminations. In 15 of the 25 states where we have both Medicaid and Marketplace products, we will reach out to our current members directly with educational information regarding the enrollment process, as well as with Marketplace plan options. We expect that state count to grow as we advance through the redeterminations process, we have a robust, scalable plan in place to support this communication and education effort. Finally, I'd like to highlight some important news that came just a few weeks ago. In late January, the FCC issued guidance to improve member communication opportunities related to maintaining Medicaid and other governmental healthcare coverage. We view this as an incredibly important step, not only relative to supporting a seamless verification process, but also a meaningful step forward in modernizing the industry's overall approach to Medicaid member engagement. We are working closely with states to integrate this guidance into our redetermination strategy and to prove the value of digital engagement in reducing cost and improving member outcomes. On balance, when you take into account our more informed view of open enrollment for 2023, the updated timing of redeterminations, and recently closed divestitures, we are well-positioned to achieve the top half of our full year 2023 adjusted EPS guidance. Drew will provide greater detail on our outlook in just a moment. As we look ahead, 2023 promises to be another transformative year for the enterprise, and one in which we will need to navigate notable market dynamics across our product lines, from redeterminations to Medicare positioning to fast-growing Marketplace products. This is not new for Centene, and we are better equipped to manage through this change than we ever have been before, thanks to the work we have done over the last 18 months to focus and fortify our operations and to align the organization around value creation principles. As we look downfield, we continue to see tremendous opportunity for all three of our core businesses, including complex Medicaid populations and dual eligibles, Marketplace adjacencies, and Star score improvement. We continue to track well against our long-term goals and look forward to executing against our strategic plan, driving strong results, and delivering value to members and shareholders. With that, I will turn it over to Drew to review our results and outlook in more detail. Thank you, Sarah. Today, we reported fourth quarter 2022 results, including $35.6 billion in total revenue, an increase of 9% compared to the fourth quarter of 2021, an adjusted diluted earnings per share of $0.86 in the quarter. For the full year, we reported $5.78 of adjusted EPS, a 7% beat over our original 2022 guidance and growth of over 12% compared to 2021. Let's start with revenue details for the quarter. Total revenue grew by $3 billion compared to the fourth quarter of 2021, driven by strong organic growth throughout the year in Medicaid, primarily due to the ongoing suspension of eligibility redeterminations, strong Medicare membership growth, and the January 2022 acquisition of Magellan, partially offset by divestitures. Our Q4 consolidated HBR was 88.7%, a little bit better than our expectations, and 87.7% for the full year. Medicaid, at 89.6% for the full year, was right in line with our expectation of an HBR in the eighty-nines for 2022. Medicare, at 86.2% for the full year, was 90 basis points better than 2021, driven by execution of clinical initiatives. On commercial, recall we originally promised a 500 basis point reduction in the HBR in 2022. How did we do? We were down 550 basis points for the full year. This was driven by disciplined pricing actions, initiatives executed in 2022, and as expected, a reduction in COVID and pent-up demand costs compared to 2021. Moving to other P&L and balance sheet items. Our adjusted SG&A expense ratio was 9.3% in the fourth quarter compared to 8.7% last year, driven by the inclusion of Magellan and the sale of PANTHERx, as well as increased Medicare marketing and value creation investment spending in the quarter, given the overall company outperformance. Cash flow used in operations was -$1.6 billion in the fourth quarter. You may recall in the third quarter, we had an early receipt of $2.9 billion of CMS payments pertaining to the fourth quarter, which is driving down our reported Q4 operating cash flow. Cash flow provided by operations was $6.3 billion for the full year, representing 5.2x net earnings or 1.9x adjusted net earnings. This was driven by earnings before charges, including real estate and divestiture-related impairments and an increase in medical claims liabilities. Our domestic unregulated and unrestricted cash on hand was $793 million at year-end, though after making some planned passthrough payments in early January, that amount is closer to zero. From January 2022 through today, we repurchased 39.1 million shares of our common stock for $3.3 billion. Debt at quarter end was $18 billion, down approximately $800 million from prior year-end, driven by senior note repurchases of $318 million, repayment of our $180 million dollar construction loan, and repayments of over $100 million in revolver and term loan borrowings. Our debt to Adjusted EBITDA came in right at 3.0x, down from 3.5x a year ago. Days in claims payable was 54 in Q4 of 2022, compared to 54 in Q3 of 2022 and 52 in Q4 of 2021. GAAP earnings during the quarter include impairments related to several divestitures that were completed or pending as of December 31st, as well as an impairment of our federal services business, partially offset by a gain on the sale of Magellan Rx. Looking back at 2022, it was a very good year of execution during some notable changes for Centene. Sarah hit on some of the highlights, but let me remind you of a few. We beat original adjusted EPS guidance by 7%. We bought back almost 7% of the company's shares, including January 2023 repurchases. We reduced debt to Adjusted EBITDA to three times and got upgraded to investment grade by Fitch. We continue to execute on divestitures. Since Q4 of 2021, we've completed seven divestitures for gross proceeds of over $3.5 billion. We improved the discipline of the company in many areas while strengthening DCP by a couple of days. We picked up two very strong operators, Fasola and Murray, along the way. All right, enough on the rearview mirror. Let's talk about what really matters today and tomorrow, starting with 2023. A few things have happened since then, including more clarity of the timing of the restart of redeterminations, a couple more Centene divestitures, a very strong Marketplace annual enrollment period, and softer Medicare Advantage enrollment, as we mentioned at the recent investor conference in San Francisco. My bias when we haven't yet closed the first month of 2023 is not to touch 2023 guidance until we have some actual results. There are a few things that will help you understand how we are starting out of the gates compared to what we outlined at December Investor Day. Our 2023 premium and service revenue should be approximately $2 billion higher than the range provided at Investor Day. Let me bridge that for you. A billion and a half more of Medicaid premium revenue from a higher starting point in 2023 and an additional two months until redeterminations recommence April first, plus an additional $3 billion of commercial premium revenue from an outstanding Marketplace open enrollment period, minus a half a billion of Medicare revenue as we were off in the annual enrollment period, down high single digits versus down mid-single digits, and minus approximately $2 billion of divested revenue previously in guidance, Magellan Specialty, Centurion, and HealthSmart. Let me go a little deeper on two 2023 topics. On the additional Medicaid broad growth of a billion and a half, we expect to give about two-thirds of that back in the redetermination process. Our previous estimate of $8 billion of ultimate run rate revenue giveback goes up to $9 billion. By April 1st, we expect to have grown by $3.4 million Medicaid members since the onset of the pandemic, excluding new markets, and we expect to lose approximately $2.2 million of those members in the redetermination process over the next year and a half. In other words, about 65% of that growth. The 2023 portion is baked into the new revenue guidance. The remaining 2024 portion would be about $6 billion of the $9 billion. I know a number of you have asked about our early read of attributes related to our growth in Marketplace. As Sarah outlined, based upon a review of the demographics, metal tiers, product types, subsidy eligibility, and distribution sources of our new membership, we don't see any signs of alarm. The proof will ultimately be in the claims data, but all of this Marketplace growth, even membership from carriers who have exited, comes in at our product design, our network construct, our pricing, and into our clinical models. While we aren't changing our adjusted EPS guidance range at this very early stage for 2023, all of this recent insight, including the higher revenue base, biases us to the top half of our adjusted EPS range of $6.25-$6.40. Of course, once we see some data from Q1, we will refine all the underlying elements for you no later than our Q1 earnings call. Suffice to say that we ended 2022 strong, and that looks to be continuing into 2023. As we look out to 2024, we remain committed to our previously provided adjusted EPS floor of at least $7.15. While we're 10 months away from giving formal 2024 guidance, let me give you some updated color on recent events that are included in this assessment. First of all, on the positive side, 2023 looks to be a little stronger out of the gate, as we just discussed. Second, we completed California renegotiations in late January and are pleased with the outcome. Third, our Marketplace business is $3 billion larger than we had previously assumed, and we expect performance in the target margin zone in both 2023 and 2024. Four, investment income continues to grow, including the recent 25 basis point Fed rate increase in early February. 5, share count is down further, and with the stock price lower, we will strive to accelerate planned share repurchases earlier in the year. That's a pretty good collection of tailwinds. On the headwind side, though, Medicare is going to be challenging for us in 2024. We knew it was gonna be tough given the cards we were dealt in star scores stemming from poor decisions in 2020. The impact of a disappointing advance notice on 2024 rates does not help. We will most certainly be pricing for a negative margin in Medicare Advantage in 2024 temporarily, and we don't expect to grow Medicare Advantage in 2024, and likely will shrink a little. We have a lot of work between now and the first Monday in June when the bids are due to refine our estimates and products further. Obviously, the industry will be asking a lot of questions about the components of the advance notice in anticipation of final rates in a couple of months. Here is the silver lining. If we can achieve at least $7.15 of adjusted EPS in 2024 with a meaningfully underperforming Medicare business embedded in that result, that becomes a margin expansion and growth opportunity in the back half of the decade as we improve stars and pull other levers over the next few years. We know what needs to be done. It just takes time, especially in stars. We can now turn the page from a very good 2022, the first year of execution from this management team and an important foundational year for multi-year improvement as we look ahead, and ultimately getting to our long-term growth and earnings algorithm we shared with you at Investor Day. Thanks for being part of our journey. Operator Rocco, you may now open the line for questions. Thank you. If you would like to ask a question, please press Star then one on your touchtone phone. If you are using a speakerphone, we ask that you please pick up your handset before pressing the keys. To withdraw your question, please press Star then two. Today's first question comes from Josh Raskin at Nephron Research. Please go ahead. Hi. Thanks. Good morning. I wanted to just start on the weaker MA start in the selling season. Maybe you could talk a little about was that due to changes by competitors? I heard something. You know, I heard a lot about the distribution channel changes that you made, but any specifics would be helpful. Then any benefit design changes that you made that you think contribute to some of that lost membership would be helpful as well. Thanks. Yeah. Thanks, Josh. Good morning. Happy to hit that at a high level and then have Ken weigh in as well. As I mentioned in my remarks, our major focus in the selling season was on operational stability and on the fundamental underpinnings that would contribute to quality results 'cause we continue to take a long-term view in Medicare. In order to achieve those results, we started rebalancing our distribution channels with a bias towards more proprietary channels where we feel we could control the member experience better. That was part of what impacted the softer results because, as you point out, we also had the competitive dynamics investments from competition, not just in the market, but in some of those channels that we deprioritized. Ken, if you wanna weigh in a little bit on benefits as well. Yeah, I... Thanks, Josh. The CMS data, which is readily available, demonstrates, you know, so I think you've seen where members have moved. You know, for our part, we rotated towards margin improvement, recognizing going in that that would probably be at the expense of some member gains in very targeted markets. I think the insight that we've gained this past year, both with respect to the comments Sarah made about the distribution mix and the really over-performance from owned and more captive channels along with, I think, a greater insight with respect to the characteristics of the kind of members that are likely more responsive to both our product and network mix, I think gives us really the opportunity to be vastly more precise as we move into the new year. I think you'll see that, as we move, not just through, our product design positioning for the coming year, but the way we allocate, and optimize the distribution resources and the marketing now that we've moved marketing internally, we had some of that subcontracted, I think is going to create a strong platform for the achievement of the guidance we've provided. Just a quick follow-up. Do you have visibility or any insights into the changes in membership, whether that's helpful from a, you know, quality improvement, Stars improvement perspective? Do you know, you know, the members that have lapsed relative to the members that you've retained? Does that feel like you're moving more towards the right direction on Star improvement? This is Jim. Absolutely. Sarah and Ken both referenced the focus on proprietary distribution channels. In past lives, I've seen that creating a relationship, and we talked a little about this in New York, creating a relationship with those members, goes a long way towards some of the things that are measured in stars. For example, complaints. If you have a relationship and you bring the member in and explain to the member the benefits that they are going to get and how to use the system, obviously the complaints to CMS are significantly reduced. We're beginning to see that frankly, in 2023 in the first month and a half of results. Disenrollments are much lower as a result of using proprietary channels. The other thing is that because of the stability of the existing membership, we expect that we're going to see some improvement in Star Ratings as well as RAF going forward, which will help our overall margin profile going forward. We feel really good about that. Focusing on relationships and how long we keep a member, used to more of a seven to eight-year member retention, and we need to begin to build that kind of stability going forward. A lot of steps that we've taken around Star Ratings are starting to see some favorable results, so feeling good about that. Thanks. Thank you. Our next question today comes from Justin Lake at Wolfe Research. Please go ahead. Thanks. Good morning. First wanna say I appreciate the color on 2023 and 2024. Just wanted to get a little bit more detail, of course. It looks like you're at 2.7% net income margins for 2023, give or take. From there, Drew, you mentioned Medicare Advantage margins go lower, it sounds like year-over-year. I think the market certainly expects pressure on the risk pool in Medicaid year-over-year. Curious in terms of what gets better in 2024. I know one of the big buckets is Jim is working on those cost cutting. Maybe you can share, for instance, how much, how much cost cutting benefit you expect to get from 2023 to 2024, as well as kinda your thoughts on that Medicaid margin in general and any other moving parts we might have missed. Thanks. Sure. Thanks, Justin. Some of the tailwinds for 2024 that are sort of baked into our forecast, obviously a really meaningful tailwind from the PBM RFP. That's sort of a stairstep benefit as we've talked about, that commences 1/1/2024. We're well in the integration period and the transition period, working well with ESI and CVS as both good partners. We expect to yield that benefit across our entire book of business. Investment income continues to be strong. We expect that to continue into 2024. Share buyback. You see our share count as we disclose in our Investor Day deck, end of the year lower than we had anticipated. We're able to bake that into our 2023 guidance. At these prices, we'll be buying, that's for sure. Marketplace will be a few billion larger than we originally anticipated in 2024, and we like our margin position there, and we can probably make another step, or we will make another step in 2024. As you mentioned, the overarching value creation plan, including a lot of the work that Jim and a lot of other people around the company are executing on pulling levers, we expect momentum as we get into really the third year of that value creation plan. Those are all the tailwinds. As I mentioned, Medicare's gonna be pretty significant headwind, given stars as well as the lackluster, you know, in advance notice. You also asked about Medicaid. As I think about Medicaid, I know you've asked this a number of times, now we're on a conference call that's FD compliant, I can answer some of those questions. As we think about the progression going from 2022 to 2023, you know, we ended the year at 89.6% in 2022, we've got about 30 basis points of pressure built into 2023, up to the very high eighty-nines. As we dissect the 2022 actuals we look at things that we had to fortify, or are unlikely to recur, that's another 10-20 basis points of non-recurring called items embedded in the 2022 Medicaid HBR. We think that gives us adequate room for a little bit of pressure from redeterminations as we are working hard with our associations, with the actuaries that represent our associations, the actuaries that represent the states, our state regulators, departments, and really, you know, sort of warming them up for what may or may not be necessary. To the extent that there's a risk pool shift, we expect action, probably not as fast, but hopefully close to as fast as the action that was put in the other direction with acuity changes during the COVID era. We're prepared for that. We've had a lot of time to prepare. The elongated process of redetermination and the sloping will help us gather data and be able to manage that HBR in the high eighty-nines. Thanks for all that, Drew. Just to put a bow on it, anything on update on the 3.3% net income margin target or that North Star for 2024, how you view that? Well, our target is at least $7.15 of EPS. You know, the interplay between operating income and share buyback will sort of affect whether or not that 3.3 is the absolute number that we hit for 2024. That is our North Star, and we're gonna keep on pushing for that. Obviously the divestitures, as we've talked about, have some impact on the denominator there, in terms of both the margin and the dollars. We're gonna fight hard to deliver that, at least $7.15, Even though we've got a pretty meaningful Medicare headwind in 2024. Thank you. Our next question today comes from Stephen Baxter at Wells Fargo. Please go ahead. Hey, thanks for all the color. A couple questions on the quarter. I wanted to ask about, you know, reserves and PYD. Like, did the DCPs, you know, look good? Trying to understand the magnitude of PYD you experienced in the quarter better. You know, for a lot of other companies, by the time we get to the fourth quarter, PYD is pretty minimal. It doesn't seem like that was necessarily the case here. Would love to understand, you know, what drove this quarter and what business was impacted. This might be the same answer, but wondering why we didn't necessarily see the same typical Q4 MLR seasonality in commercial. Any color there would also be appreciated. Thank you. No, you're right. We outperformed. That was probably the biggest contributor to our sort of overall slight outperformance on HBR. But commercial continues to be strong, and I chalk that up more to execution and the momentum that we've gained over the last, call it, five quarters in that Marketplace business, implementing clinical initiatives, the interplay with the value creation office, not just for SG&A, but also for trend benders and HBR initiatives that drive, you know, both quality and the affordability of healthcare. Those, you know, those were some of the drivers that helped the commercial business, and we feel pretty good about that heading into 2023. We do disclose the roll forward tables. I think one of them is in the press release. The rest will be in the 10-K. Last year, 2021 saw a higher favorable development off the 12/31/2020 reserves. That's understandable with sort of the chaos of practice patterns and claims patterns during, you know, the 2020 year of COVID, still, consistent reserve methodologies and a pretty strong showing of development during 2022 off of the 12/31/2021 reserves. Thank you. Our next question today comes from A.J. Rice at Credit Suisse. Please go ahead. Hi, everybody. Couple things, if I could. First on the Marketplace. I appreciate the comments about the demographics of the people you've seen through the open enrollment period. There's also been some questions about what are the demographics gonna be of people that you reverified off of Medicaid and go on the exchanges. I know the current exchange population has very diverse health needs. Do you think those redetermined Medicaid people that end up on the exchanges will pull up the risk pool, pull down the risk pool? How are you thinking about that, first off? Yeah. Thanks, A.J., for the question. If we think about the members who are redetermining off, we do think that those members are probably carrying a slightly higher acuity, but then you have to balance that with a view that with the growth that we've seen in the Marketplace product, and if you look back to historic periods of growth of this magnitude, it tends to bring many more healthy members into the pool. The net effect of those two dynamics is hard to say exactly where that equals out, but our Marketplace team is watching both of those cohorts pretty carefully, and I think has obviously had visibility into the fact that redeterminations were gonna factor into 2023 and took that into account in pricing. Okay. If I could slip in another one on your Medicare comments for next year. I know on the RADV, you said, "This is what we like. This is what we don't like." When you think about the rate notice, it sounds like there's places where you think the industry can comment to CMS and potentially, you know, ask, maybe look at it a different way or something. Are you willing to talk about where some of those points of discussion, at least between the industry at large and CMS might be? In terms of your strategy, it sounds like you're talking about a potential negative margin, so that must mean you're gonna try to stabilize benefits, year-to-year in a growing market. I'm wondering, is it conservative to say we're gonna have stable benefits but not have growth on the enrollment side? Yeah. On the Medicare side, you know, we've said this coming into even this year as we try to design benefits in order to maximize stability as we move through 23 and 24, and I think we will continue to do our best to keep benefits as stable as possible, taking that long-term view that stable operations, optimizing for member experience, improving quality is the right thing to do. You know, weathering the 24 headwind may have an impact on margin as a result. But the goal would be to keep benefits as stable as possible, so we're not whipsawing members, and we are focused on building those longer-term relationships as Jim talked about. Relative to your first question, you know, the RADV rule is sort of in the final state. There, it's really about talking to our industry partners about how we feel about the impact of the as yet undefined methodology, and what impact we think that may have and how comfortable we are with that. You know, the 2024 rate notice is a regular cycle of conversations that we have with the agency in order to communicate what we believe the impact of the somewhat lackluster rates might be on the overall industry and the benefits to seniors. Thank you. Our next question today comes from Gary Taylor at Cowen. Please go ahead. Good morning. I just want to ask about expectations for response in ACA for 2023, given the much more sizable enrollment growth that it looks like. excluding the true receivables from 2021, it kind of looks like, the receivables just sort of out at, you know, even sort of, positioning. A lot of times we saw Pardon the interruption, everybody. This is the operator. Mr. Taylor, your line is breaking up very badly. It looks like we have a bad connection. I would ask you please, disconnect and dial back in, or pick up your speaker phone if that's the case. Is that better or not? That's much better. Thank you, sir. Okay. Please proceed with your question again. I apologize. I just wanted to ask about expectations for ACA risk adjustment given the enrollment growth for 2023. When we've seen companies with really large enrollment growth in the ACA, sometimes they've been surprised to end up being, you know, increasing, payable on the ACA front. It looks sort of like in this case, you guys have generally been a receiver, and now you're gonna have, a much larger population. Is your expectation that's fairly even, or is there any material additional payable you're contemplating for 2023? It's a good question. The demographics of what's coming in looks very similar to. Actually, the subsidy eligibility has gone up a little. Nothing really, you know, alarming in all the attributes we can look at what we know today. Obviously, the proof's gonna be in the med cost. You're right. In Marketplace, it's a zero-sum game, concurrent risk adjustment process for 2023, that's something we'll be watching. There's also two less competitors out there. We've thought about that as we not only booked our 2022 risk adjustment receivables, but also as we forecast into 2023. You know, we'll get the 1st weekly data, you know, in June this year, and we'll have to take a look at that. We've thought about that as we forecasted and as we closed out 2022. Thanks. Thank you. Our next question today comes from Nathan Rich at Goldman Sachs. Please go ahead. Hi. Good morning. Thanks for the question. I wanted to follow up on the Medicare business. Drew, could you help us think about the magnitude of the step down that you're thinking for Medicare margins in 2024, just given the comments that you made about pricing for a negative margin and trying to keep benefits stable, maybe relative to the margin that you're targeting for 2023. You know, I guess outside of plan design, are there any offsets that you think you can leverage to try to mitigate some of this impact in 2024? We're always looking for whether it's, you know, Jim and the team, the Medicare team are focused on SG&A. I think there's opportunity there. There's continuing maturity in trend vendors. Yes, we're gonna look for any possible offset, you know, other than benefits. As Sarah said, we'll try our best to, you know, keep stability for our members, but we do expect at least at this early point to shrink a little bit in 2024. The swing is pretty meaningful, both in terms of stars and the very disappointing advanced notice with rates. I mean, that advanced notice for us, call it -1% excluding stars 'cause, you know, we made our own bed in stars, but we are expecting, you know, a positive low single digits. That's a pretty meaningful swing. Every point, you know, is $200 million on a, you know, $20 billion business. We've got to manage through that, and it will be a pretty sizable drop. Can't give you an exact number yet. We'll definitely give you that in 10 months after we've gone through the bids, we've got the final rates, and we've developed sort of that balance between margin degradation and stability in the product. It'll be tough. We'll power through it, and 2025 and beyond will be margin expansion and growth as we'll ramp up over the next few cycles of Star results. It's good to hear, you know, Jim convey to you guys that we're already seeing some elements of optimism that we're gonna be able to achieve that multi-year improvement that we're seeking. One other thing I would add when we think about levers in 2024 is the breadth and depth of our value-based care relationships, which is something that I think we're already planning on, but have the runway to accelerate in 2023 in order to be in an even stronger position. As, you know, as many of you know, that that was, we have a good set of relationships with a number of the sort of leading value-based care providers, but I think we have been you know, not as aggressive in that in the past. So, you know, in 2022, started to turn our focus there. Our organizing around that internally have brought in some great talent to help accelerate. That'll be a focus in 2023 that I think will give us some benefit in 2024, and then obviously beyond that as well. Thank you. Our next question today comes from Michael Ha with Morgan Stanley. Please go ahead. Hi. Thank you. Just wanted to ask a bit more about redeterminations and expectations. Appreciate all the color and the 30 bits of Medicaid MLR pressure in 2023. I recall hearing at your Investor Day that your state composite rate increase improved about 50 bits. I'm just curious, how did that compare to your original expectations? I think there's originally been some concern that state rate increases may not go into effect until a couple of quarters after redeterminations were underway, 50 bits improvement feels pretty strong, pretty positive, quite high. If I think about the messaging around just most states expecting to complete redeterminations likely later in 2023, then in that scenario, you're entering 2023 strong rate increase, couple that with a very slow rollout of redetermination. It seems like a recipe that could present some earnings upside this year. Is that a fair way to think about how redeterminations might develop? Yes. The composite rate that is embedded in our guidance as we, as you properly pointed out, we disclosed at Investor Day is 1.4%. I guess, yes, compared to a meager 0.9%, that is a big jump, but it's still on an absolute basis, 1.4%. You might want to think about that in context. The reason why we were 0.9 relative to the 1.3 that we had baked into our 2022 guidance, Florida was a pretty big piece of that. We expect a recovery there this year as we demonstrate the need for rates. That'll be an ongoing process as we, you know, we go through the rate cycles. Luckily, they're distributed across the year. They're not all stacked on one like the commercial business or the Medicare business. You know, we have slugs that renew throughout the year, which will help with the sloping of redeterminations as well. Maybe just to add a little bit of color on the process to your point about, sort of the methodical approach that we were expecting. With the certainty of the year-end bill, we started to get updated information, obviously, from each one of our states and continue to be in regular contact with them. I would say that in general, we are seeing that methodical approach hold, with the vast majority of our states sitting in a 9-14 month bucket in terms of the timeframe that they expect redeterminations to play out under. Some of them, you know, indicating that they won't start April 1, they'll start closer to summertime. You think about sort of the start date shift. Overall, nothing that suggests the overall slope line will shift materially. We are seeing, you know, continued positive momentum from our states in being open to and encouraging our support in outreach and communication education efforts to members. In general, feel like, you know, the industry is aligning and organizing around an approach that will, you know, minimize or seek to minimize member abrasion in the process and are allowing us to run alongside our state part-partners, all of which is positive from our perspective. Thank you. Our next question today comes from Scott Fidel at Stephens. Please go ahead. Thanks. Hi, all. Wanted to just drill in a little bit more, especially given possibly the importance of the buybacks. Just, if you could walk us through your updated sources and uses of cash for 2023 and how much you think you can have, you know, for deployable excess capital for buybacks. Drew, I'm not sure if you had given us 2023 operating cash flow guidance yet. If you do have that, would appreciate that too. Thanks. As you've seen, we did quite a bit of buyback in 2022, even as we were in the $70s in January, we were able to execute on a few hundred million more. That was largely driven by divestiture proceeds. We're continuing the portfolio review process. The timing of buyback associated with divestitures, you know, will vary based upon sort of that M&A process. In the normal course, we expect late in the year a few billion of share buyback. We're gonna see what we can pull forward, we also have improved the allocation process, therefore, the management fee process, that will trap a little bit of cash in the first half, maybe the first three quarters of 2023. That's why we back-weighted. As you look at our guidance for share buyback, we've sort of back-weighted that share repurchase. It won't have a meaningful impact on 2023, but it'll roll into 2024. We're gonna do our best. We'll probably pay down a little bit of debt as well if we sell off an asset that had EBITDA, we'll pay off some debt as well to manage that. Now when you actually pay off debt, you get a benefit with the interest rates higher. We're gonna do our best to take advantage of where we're trading. We also need to do that with a balanced view of the capital structure. Thank you. Our next question today comes from Kevin Fischbeck at Bank of America. Please go ahead. Great. Thanks. Just wanted to make sure I understood. I think you guys said that you expected to add 200,000-300,000 lives on the exchanges from redeterminations. I just wanted to make sure that that was now, I guess, in your guidance. Then you talked a little bit about the risk pool on the exchanges. Really interested in that concept about the people who come on from redeterminations, 'cause that's where I would guess it would look more like the SEP from prior years, where you only have them for six months, you don't have time to risk score, and in theory, they're sicker than average. I'd love to kind of hear how you're thinking about the risk pool of those members. Thanks. Relative to the, to the redetermining members into Marketplace, we do, again, as I said earlier, we do expect that on balance, they probably have slightly higher acuity, but at a minimum, pardon me, your point about the fact that we don't have them for the full year means that they turn to profitability as we move into 2024. Again, this is something that the team had visibility to throughout 2022 and coming into the year and had, you know, baked into our guidance. I think we'll have the offset of our expectation that a number of those members who are coming into the pool will be healthier to offset that overall and are coming in with a 1/1 start date. We have the full benefit of their 2023 risk adjustment. Relative to the 200,000-300,000, that continues to be our estimate that is baked into guidance. A lot of that is because of a belief that the vast majority of members who redetermine off will first go to the commercial book. Again, we just need to see how the data starts to play out, and whether there are any adjustments to that as we see folks coming over onto the Marketplace products. Thank you. Our next question today comes from Steven Valiquette with Barclays. Please go ahead. Great. Thanks. Good morning. really just a quick confirmation question just around potential impact on MLR from the changes sitting in the revenue guide for 2023. It seems like it should all get balanced together out as higher MLR from greater Medicaid revenue to be offset by... Pardon me, Mr. Valiquette. Sir, I apologize. Your line is very bad, the connection. Can you pick up your handset if you're using a speakerphone, sir? Is that better? Actually, no. It's not coming through, well at all, sir. We're unable to understand what you're asking. Would you be able to reconnect or possibly, reach out offline? I apologize. We have to move on. We're not able to hear what you're saying. Our next question today comes from Calvin Sternick with JPMorgan. Please go ahead. Hey, good morning. Thanks for the question. First, a quick clarification on MA. I think I heard a comment about lower disenrollment. Was that for this AP, or is that more of a go-forward comment? Second, it sounds like MA is set up for margin expansion beyond 2025. Just curious how you're thinking about the overall level of membership growth once you start getting... You know, you get past the Stars and. This is Jim. I'll take the first part of your question. We've been doing a lot during 2022 to address some of the issues that we've had with Stars. A big driver of some of our poor Stars results had been the customer complaints called CTMs and disenrollments. We're obviously. I like to look at things every day. We're watching our CTMs and disenrollments for this past year, and the amount that we're seeing is favorable to what we've seen in the past. So a lot of the steps that we've taken during the course of 2022 seem to be bearing some fruit. Those results will, as Drew mentioned, Stars takes time, will favorably impact our 2026 revenue. We're also in the process right now, CMS comes out with CAHPS surveys from March to May. We're in the process of doing a number of procedures that have never been done here before as a consolidated Centene to enhance our S-CAHPS scores as CMS does that survey. There's a lot of good things that are going on to positively impact where we think stars will be in the future. I think when we were in New York together, we talked about 20% for 2025 being in 4-plus Star plans, 20% of our membership. We want that to be at least 40% in 2026. We're targeting 60% in 2027. Thank you. Ladies and gentlemen, our next question today comes from George Hill at Deutsche Bank. Please go ahead. Good morning, guys, and thanks for taking the question. Drew, I just wanted to circle back on the idea that you sounded pretty bullish on the opportunity on the PBM transition. Just wanted to see if there were any changes to expectations or synergy targets, as it relates to that. My bullishness is, you know, ESI and Centene working together to deliver what we anticipated when we inked the deal a couple of months ago or a month or so ago. One more thing. On share buyback, let me clarify something that I said earlier. I was answering a 2024 question. The $3 billion is our placeholder for 2024. The 2023 back half of the year share buyback is about a billion and a half, and that's because we've got a little bit of trapped capital that we'll have to get out over the following year or so. So the $3 billion I mentioned is the forecast for 2024, absent any acquisitions. Thank you. Ladies and gentlemen, this does conclude today's question and answer session. I'd like to turn the conference over to Sarah London for any closing remarks. Thanks, Rocco, and thanks everyone for your time this morning. Please reach out to Jen with any follow-up questions, and we look forward to talking to you throughout the rest of the quarter. Thank you. This concludes today's conference call, and we thank you all for attending today's presentation. You may now disconnect your lines and have a wonderful day.