Awesome. Thanks so much, everyone. So I'm Steve Baxter, the Healthcare Services Analyst here at Wells Fargo. Really pleased to have Humana with us this morning. As you likely know, Humana is one of the largest MA companies, and it also has a growing footprint in Medicaid and services. From the company, we have CFO, Susan Diamond. Thanks again for being here. Do you want to make any opening remarks, or should we just hop right into the- No, that means everything. Great. Okay, so yesterday, you put out an 8-K reaffirming guidance. There's obviously been, you know, a lot of focus on utilization dynamics that you discussed on the second quarter call. What update can you provide us on utilization and where things stand, as you've had a chance to, you know, further study the second quarter and the trends that you've seen since? Sure. So as you mentioned on our second quarter call, within the quarter, starting in the back half of May, we did see a higher level of inpatient activity relative to our initial expectations. Now, when we study overall hospitalization, hospital utilization broadly, the overall number of events in the hospital was consistent with what we expected, just a higher share of those events were billed as an inpatient event versus an observation stay. So we saw a higher level of inpatient, but then a lower level of observations relative to what we had expected, given what we saw coming out of the first quarter, recognizing we were continuing to adapt to the Two- Midnight Rule changes. As we studied that, our belief is that that is just an ongoing sort of learning and reaction to the Two-M idnight Rule. As providers submit initial authorization requests, some of those get denied. They have the opportunity to appeal, and as they learn through that process, we think they're probably improving some documentation and learning how to better appropriately document the level of care that they believe is needed, that's resulting in a higher level of authorizations being approved as an inpatient stay. So we saw really the back half of May, and then through the second quarter, the variance that we experienced, very consistent. And so a lot of the questions we were getting in the second quarter is, how do you know that that's stabilized? Are you going to continue to see some increasing elevated levels? As you guys know, we get real-time authorization data for inpatient events. Through the month of August, we continued to see a variance that was in line with expectations that we set at the second quarter, so it has stabilized from our perspective since the back half of May. We continue to watch overall inpatient authorization levels, observation levels, appeal rates, overturn rates, and all, I would say, very stable and consistent with what we had expected coming out of the second quarter and contemplated in our guidance. As you saw yesterday, we reaffirmed guidance for the full year, so continue to feel good about that, and while the geography is a little bit different, some of that elevated cost pressure that we'll see as a result of the inpatient events, you know, we have other offsetting good guys over the course of the year that, again, continue to feel good about 2024 as well as 2025. Got it. And if we, you know, we'll come back to the Two-M idnight Rule dynamic in a second. But if we think about everything else going on cost-wise, I guess anything to call out with how the second quarter, you know, reserves have developed, utilization beyond inpatient in the second quarter? I know your visibility is a little bit lower there. Yeah. So we rely on paid claims for both unit cost and then non-inpatient. And I would say with July claim development and then preliminary runs that we do through the month of August, nothing of concern, and I would say, you know, generally in line with expectations, a little bit of positivity that we continue to see on inpatient unit costs. I think you mentioned last time, we've seen some sort of higher trends on things like chemo in the non-inpatient space. But, you know, some of the orthopedic pressure that you saw last year, that has not been problematic this year, that seems to be stabilized. So I would say all in, feel good about the July reserve development and what we've seen sort of preliminary for August. Okay. It's good to hear that the Two-M idnight Rule dynamic feels like it's stabilizing a bit for you. I guess, as you step back and studied it and maybe tried to look at it at either geographical level or system level or individual hospital level, I guess, what trends have you found that maybe give you confidence that there's not further pressure that could emerge in the back end of the year? I think one thing that's come out is that hospitals seem to have a certain point of view that there's more opportunity here. I guess, how do you guys get comfortable with that dynamic? Yeah. So we've been watching the trends closely, as you can imagine. As we see reports like the provider systems, to the degree they're saying something different, we always study that, you know, additionally. I would say we've been reviewing the, again, the absolute levels of inpatient authorization requests, the appeal rates, the denial rates, and overturn rates by not only in the aggregate, but also geographically, by plan, by facility, and we're not seeing anything that gives us any concern that we see pockets of sort of continued elevated trend. It's relatively stable across any of those cuts. One reason we think there may be a difference is in the commentary. You might remember in the first quarter, we mentioned that we were seeing a higher level of appeal rates- Mm-hmm. than we had seen historically and might have expected, especially when you think about more absolute authorization requests are being approved. So to see- Yeah. higher appeal was not what we had initially expected. There was some question about, is that just a pull forward of what you might have seen over the tail period? Because there is a fairly long period of time that providers can appeal a denial. We took the position that that was just going to be an absolute higher level of appeals i n our thinking, and that we see overturn rates comparable to historical. So we allowed for that. To date, we would say that that is likely what we're seeing. We haven't seen that it suggests it was just a pull forward. So some of the hospital commentary may be just a reflection of them not having anticipated that. Okay. -as early as we did. But our estimates do contemplate an absolute higher level of appeals, which then will result in comparable overturn rates as we've seen historically, and it just may be a timing difference in terms of when we contemplated that versus when providers may have. Do you think you have opportunities to improve your avoidance rate in the back half of the year or into next year? Like, if this emerges as, you know, something that over time is a gradual source of pressure, or do you think it kind of moves into the dynamic of hospitals are always going to be trying to, you know, maybe push things incrementally, and you guys have a responsibility to be able to deal with that? Yeah. As far as Two-Midnight Rule itself, you know, as we mentioned, initially, at the start of the year, our avoidance rates were lower than we expected, but over the course of the quarter, every week, we saw improvement as we continued to train our clinicians based on what we were seeing, frankly, do some provider training as well, to make sure they were interpreting it correctly. So that when we exited the first quarter, our avoidance rates were in line with what we'd expected, and that has been very stable ever since, very much in line. We've continued to do detailed chart audits. We actually recently went through a CMS audit on the Two-Midnight rule changes, and everything continues to validate that our clinicians are making appropriate determinations on whether inpatient level of care is in fact needed. So I would say on the margins, we may see some, you know, changes. We're continuing to look at things like high complexity cases and routing those to specific clinicians that have deep expertise in those areas, but those are not high volume sort of events. Yeah. So we'll continue to work to improve it. As you said, I think hospitals will certainly continue to work, but I'd say the bolus of sort of the implementation we've each addressed. I think over time, you know, we'll continue to just more broadly try to impact trend. I would say that going in, this time last year, as we were negotiating with providers, they largely, you know, believed Two-M idnight Rule would have no positive impact in terms of their results. Yeah. So that was hard to use as a point of leverage. Now that we've actually very clearly seen the results, it does give, I think, our contractors more information as they more broadly work with hospital systems around the various components that hopefully will allow us to take some ground in terms of overall medical cost management. But I'd say that the avoidance rates itself, you know, I think are sort of largely in line with what we would expect. Got it. Okay. And then as we think about, you know, from the second half, excuse me, the second quarter MLR, the progression that you guys have in the insurance business to, you know, the third quarter, I think, is gravitating to somewhere around, like, 90.5%. I think the progression from Q2 - Q3 - Q4 looks a little bit different than maybe it has in previous years. What are the key factors that are impacting the progression from Q2 to the balance of the year that we should think about? Yeah. So, and there have been a lot of questions trying to assess just the seasonality- Yeah. and some people try to go all the way back to pre-COVID, which we would say is not terribly productive just because the business, the business mix changes and other things that have happened since then. In terms of this year's seasonality, it does look different than you would see typically. And some of that's just a function of the overall contribution of insurance pre-tax to the overall enterprise is going to create a different seasonality to the EPS pattern. Normally, you do see some, you know, increased MLR in the back half of the year in the individual MA book, just because the seasonality of revenues associated with MA, where over the course of the year, as you continue to enroll, say, agents, and see the impact of deceased members, which have much higher than average risk scores, you tend to see negative seasonality on the revenue side, which drives some of that increase to MLR in the back half. You've got the obvious, you know, respiratory season in the fourth quarter that's gonna drive naturally higher MLRs. And then there's a couple more unique things, the last couple of years. One is, some changes that were made by CMS on D-SNPs. They changed the way cost share applies to the maximum out-of-pocket calculation. We knew this in terms of pricing, so it was contemplated, but it does create a different seasonality pattern, where duals will now largely hit the MOOP, where in the past they did not. So it creates more plan liability in the back half of the year. And then one of the other larger things is the increase in supplemental benefits. Mm-hmm. And so those do naturally see a higher utilization level in the back half of the year, particularly the fourth quarter. Those benefits cannot be rolled over to the next year, so you typically do see a higher level of utilization of things like OTC cards- Yeah. food benefit cards, and even some things like dental services we'll see in the fourth quarter. We are anticipating an even higher level of utilization of some of those services in the fourth quarter of 2024, just recognizing the benefit changes we've made for 2025. And as people get visibility to that, knowing that those benefits will be reduced, we do anticipate, again, an even further elevated use of some of those benefits, recognizing that they won't have the same capacity sort of free utilization in 2025. Okay. And when we think about the emergence of, you know, some of the incremental costs this year, you know, some of the offsets, I think you guys have talked about, you know, higher levels of risk adjustment, higher levels of claims recovery. I guess, how should we think about, you know, how you're approaching booking those things this year, and whether this is a durable offset into next year to potentially offset this higher level of cost as we think about, you know, the margins that you're trying to get to in MA next year? Sure, and it's creating the seasonality with MLR for 2024 as well, where we have seen higher levels of prior year development, for claims, and then favorable MRA, most of which was related to final 2023 as well. When we report prior year development for you guys externally, it's just the claims side. Mm-hmm. The revenue doesn't get incorporated into that, but we share that in our actual results, so on the MRA, if you remember, we had a very large enrollment cohort in 2023. We don't have visibility to the 2022 claims, which will determine their 2023 reimbursement, so we make assumptions based on historical patterns, and ultimately, what we saw is the final 2023 payment reflected a higher risk score for that new bolus of 23 members than we had anticipated, which was favorable. That had not been contemplated in our bids, and so it was incrementally positive for 2025 as well, and for 2023, it gets recorded sort of in the first quarter- Yeah When that payment's received. When we think about 2024, now that we have visibility to those final risk scores, we would anticipate that in our normal course, sort of booking across the month. Yeah. So the seasonality will look a little bit different for 2025. Yeah - than it did in 2024, because we didn't have visibility to it. On the more normal course, prior year development, some of that is just arguably claims conservatism in our year-end reserves that ultimately unwound. But there is a component that we can isolate that is related to activity that we do. So think of post-paid claim audits. The benefit that we've seen from some of those audits has been favorable relative to what we expected, and that also was not something contemplated in the 2025 bids, and so something that you'll see recur again next year. That will look more like typical PPD- Yeah ... and seasonality in terms of more front half of year weighted. And that's a function of our reserving practices, where we never assume claims are more than 100% complete, when in reality they are at the end of the year, and so you plan for that- Okay - positive development to emerge in the first half of the following year. Okay. And then when I think about, you know, the pressure that you're offsetting this year, you know, the inpatient side, you know, I think has taken a little bit of time to ramp and have the true Two-M idnight level activity kind of emerge. How do we think about, you know, kind of looking at, like, a partial year of this inpatient effect versus, you know, annualizing that into a full year impact next year? Yeah. So, some people have assumed that it's, you know, back half of MA, it's not a full year- Mm-hmm ... when, if you remember, that first quarter, we saw some pressure as well, just because, again- Okay Those avoidance rates were not on the level that we had expected until we were exiting the first quarter. So there was some inherent pressure in the first quarter just because it took a period of time for the avoidance rates to get to the expected levels. So it's, you know, it's still not a full twelve months, which is fair, but it's not- Okay. for seven and a half months either. So we would say, you know, that pressure, as we look at sort of what we expect at the time of bids and what we are now anticipating, we've accounted for that higher level of ultimate net cost- Yeah for inpatient activity. But then also looking at risk scores, the prior year development, and all of the other variables that would have been contemplated at the time of bid. All in, when we consider all of those variables, we continue to feel good about the MLR that we were targeting for 2025 in our bids, and then the earnings progression that that would have supported. So while the geography is a little bit different, continue to feel good about the totality of assumptions that went into our bids, and that based on what we're seeing in emerging experience, that there's sufficient offsets such that we continue to feel good about what we were targeting and pricing. Okay, that makes sense. And I know that, on the second quarter call, I think it was still, you know, probably early, so maybe you guys weren't as specific as you might be able to be, you know, now or in the coming months. But you're talking about exiting a few hundred thousand members in MA. Can you talk a little bit more, if you can, specifically about maybe the sizing of that? How should we think about maybe the gross number of members that you'd exit, you know, what you might hope to retain, and then kind of the financial implications of either, you know, lost members or retained members, and how to think about that in terms of your 2025 earnings growth? Sure. Yeah, so as you said, we've commented we expect to lose a few hundred thousand members. That is a net number. So the plan exit numbers we'll share today. So what you'll see when the landscape files come out is the number of members impacted by a plan exit is about 560,000. So think of that as roughly 10% of our individual MA membership base. That's gonna come in two forms. And one thing to be clear is there are very few places, I think it's literally 13 counties, where we will have no presence at all, so completely insignificant. Mm-hmm. So our coverage and footprint will remain largely the same. When we did an exit, it was either a full plan exit, where we exited a plan, but there are other Humana plans available in the market, or we took a plan that maybe covered X number of counties, and we're now gonna cover X minus two, so we trimmed the number of counties that they cover. But again, nearly all of those members have other options. So as we think about those members impacted and how the plans that are left behind are positioned, the assumption is that we'll retain, you know, call it roughly half of those. Okay. If you do the math to get to this sort of, you know, a few hundred thousand- Yeah - loss of members. That is not atypical from what we've seen historically when we do plan exits, and as we said before, for the rest of the book, not impacted by plan exits, you can assume roughly flat in terms of what we would expect, and that was not to say that we couldn't see better results than that- Yeah or that we couldn't grow. It's just we wanted to make sure with the earnings progression that we were trying to achieve, that it was not dependent on driving a, you know, industry average growth on the rest of the book. And if we are able to drive membership growth, then that's incrementally positive. And so you can think of those members impacted by exits. If we chose to exit, you can assume it was unprofitable- Mm. - from a contribution margin standpoint. And the team had a perspective that within a reasonable period of time, think of that as two-ish years, they couldn't reasonably get it to a contributing level of performance. And so in those cases, they would decide to exit. They could have launched a new plan, you know, in response to that, which they felt they could better optimize and have more- Yeah flexibility around, or they felt comfortable with what other plans already existed in the market. So the exit itself is positive in the sense that those plans were not contributing a nd so, just exiting, even if we don't- Yeah Retain the members is positive. If we do, then ultimately retain more of those members, that's incrementally positive because the plan choices left behind are priced in such a way that they will be positively contributing. Yeah. So we kind of get it on both sides. So we do acknowledge that membership growth in 2025 is. There's a wide range of potential outcomes. It also is going to have a disproportionate impact on the absolute level of earnings that will drive growth next year. Just, you know, we feel good about the margin percentage and the pricing decisions. Yeah We've made, but how we ultimately see the membership play out in terms of how many members we retain, what plan choices do they make in terms of the plans, options available, will be an important consideration. And to appropriately assess that, we'll need to see the full landscape that CMS released in early October, such that on the third quarter call, we'll be able to give you guys some color commentary in terms of- Mm-hmm How we feel like the plans are positioned, some of the early reads from AEP, mostly on the enrollment side, broker feedback, and some of those things as respects to ultimate positioning that we see. Got it. I mean, that makes sense. So appreciate the color. So we think about the difference between, the membership that you feel like, you know, might just be lost to the market versus what you might ultimately keep. It feels like there should be a pretty wide range in profitability assumptions related to that. Like, obviously, I think, like, you're dealing with all the negative loss operating leverage of lives that leave the plan completely versus transitioning to plans that, you know, might not be overwhelmingly profitable, but from a contribution margin basis, would seem to be a much better alternative than losing the members entirely. I guess, how should we think about the spread between those populations? Yeah, I mean, we would think about it, every member that we are able to retain is positive- Mm-hmm. because we, you know, we haven't left any... There are a few plans that may still be negative contributions. That's more a function of just maturity, and they may have a disproportionate number of agents because they're newer plans and those things, but structurally, we feel like we are well positioned. So every member that we retain is positive relative to the performance that we've seen historically. And I would say across the industry, you know, while the overall performance of a book might vary, I would say all of the large competitors have a similar dynamic, where we all have launched sort of higher benefit value, LPPOs, typically plans, that have been very pressured given V28 and the trend we've seen. So you've seen all of us talk about sort of exiting more plans than typical and disproportionate benefit changes. I do think those will be concentrated in those plans that we all have that are low margin, if not negative margin, and so that'll create some disruption. We all also have plans that are very well performing. D-SNPs, as an example, in general, are higher performing and have weathered some of this better. So I think all of us are going to work hard to address the underperforming plans and work to protect the higher performing plans. And so exactly how people did that is what we'll need to see. What exact benefits changes did people make? But I think you'll see, you know, some probably even investment level in those higher performing plans, where we weren't going to take max TBC and might actually bring the margin down a little bit because those plans are meeting, if not exceeding, sort of the target margin and have the potential to grow. So we want to retain those members and continue to grow while addressing some of these sort of financially troubled plans. And again, we all have those. Yeah. And so it's those members, as they start to move around, how do the resulting plans sort of fit relative to one another, and how do the benefits resonate with consumers and brokers? We did a ton of research that informed the benefit changes- Yeah That we were going to make, recognizing it was a higher level than the industry has had to manage the last couple of years. We feel really good about the decisions we made, but are going to have to see the full detail though, to fully assess it. Got it. Okay. So in terms of the, you know, kind of the flat expectation for the rest of the book, I guess, how are you thinking about that across, you know, the different populations? I think you alluded to it a little bit, maybe versus, you know, D-SNP versus non-D-SNP. I guess, you know, I'd love to understand what informs that view, and then to the extent, I believe you started to get some feedback from brokers, maybe during the month of August, as you introduced what your plan designs look like for 2025. I guess, what have you heard from them, and any kind of competitive intelligence that's starting to emerge as well, would be great. Yeah. So as I said, we were very focused on the sort of current profitability of the plan to try to protect higher performing plans in terms of preserving membership and then positioning them to continue to grow while addressing the lower performing. You can think of that in some cases, there are certain products like D-SNPs. Some of our sort of HMO plans do quite well, so those would be some specific areas that you would see us work really hard to protect. Certain geographies, typically those that are higher risk-penetrated. South Florida, to give you an example, where, again, still continue to have very rich benefit values and do well, and so we would want to, you know, protect those. So broadly, it was a profitability sort of matrix, that we evaluate, as well as just the opportunity for further growth, so combining those two factors. I would say, though, for risk providers, recognizing that many of them are under pressure, some of them saw pressure disproportionately from the supplemental benefit investments, where some of the dental, in particular, where you saw some of that investment was more concentrated in risk-penetrated markets. That was a point of frustration for providers, and so certainly worked very hard and were very focused on those plans and mindful of the benefit changes we were making, to feel confident that the risk providers would be, you know, satisfied with the level of changes that we made and the resulting impacts to their surplus. So that is something we're very curious to see. I think all of the plans were under pressure to do that, and so it'll be very interesting to see if someone didn't take appropriate action, how does the risk provider react to that? And are they going to continue to support plans that are not financially viable? And that was certainly a priority for us, to make sure that we were designing the plans in a way that was supportive of the risk partners. Okay. And then to the extent that brokers are starting to give some feedback on how they're going to deal with the idea that benefits, you know, industry-wide, seem like it's going to be compressing some, I guess, what's the initial feedback? Like, if you're in a plan that has benefits coming down, but it's still the most attractive plan on the market, like, do you think those plans still retain a lot of that membership? Or how are you guys thinking about the potential for switching in 2025? Yeah, and to your earlier question, so I'd say we've all done sort of our broker, you know, meetings. I would say less detail has been shared generally this year than we've seen in the past, just recognizing, I think everybody anticipated there might be more last-minute benefit changes as a result of direct subsidy estimates and things than historical, so it is later to come out, and generally, I'd say, less specific than we've seen historically, which is why the full landscape will be so important. Yeah. But I would say, based on what we have seen so far in broker reaction, has been positive, in terms of sort of the changes we made and how we approached the plan designs. So that's been good. We'll have to see ultimately how it looks, but so far, that's been positive. I think generally, people are anticipating a higher level of disruption and trying to prepare for that. It's still going to be a challenge when you think about it's a 52-day selling cycle, and you're putting- Mm-hmm ... you know, almost every Medicare beneficiary through it. So I do think it will be a challenge. I think the plan exits, in particular, brokers will be focused on, because in the absence of a plan change, they're going to lose the renewal commission on that. So I think they will definitely be very focused on getting in front of those beneficiaries and having a conversation about what other options are available. To your point, you know, there's going to be a lot of frustration over the absolute level of changes across the board, but they will go through the process, and even if they are frustrated by the level of benefit changes we made, if, in fact, that plan is still the best option, they will stay, typically, in the plan. And that's what we've seen historically in cases where we've had to make some of these types of changes. But we recognize, though, it still will be a frustration. We try to support the brokers. We provide information to them on the members we believe will be most impacted and most susceptible to sort of disenrollment based on the changes we've made, as well as their own utilization patterns, so that they can get out in front of that. We do a lot of support where we're willing to take on some of that administrative burden to say, "We're happy to sort of facilitate a needs assessment and facilitate a plan change where necessary, and still protect you as the writing agent, so that we can free up capacity for them to service sort of new enrollment." So there's a variety of things that we'll do. We are staffing for a higher level of inbound activity across our service centers and our sales call centers, given the disruption we expect, so we're trying to plan for it. But I do think- Yeah It will be a bit, you know, it'll be a challenge just for the industry. Okay, and beyond, you know, the enrollment dynamics and, you know, benefit design, another thing we'll be watching for in October is obviously the updated Star Ratings. Mm-hmm -for 2026. There's been a bunch of, you know, methodology changes and kind of walk backs, you know, over the past couple of years. How are you guys thinking about, you know, Stars opportunity? I know you're a top-performing plan, so your ability to improve is obviously limited, but what are you watching on Stars? What are you focused on? Yeah, we didn't have some of the, some of the same impacts as last year, like the Two-Midnight and some of those types of things. Mm-hmm. But I would say just in general, the program is challenging in terms of just the basic structure, right? Straight weighted on... grade on a curve, it's not weighted, and so it- Mm-hmm It can be more difficult to predict. So I would just say we continue to be focused on it. It is early, right? CMS has not released the information yet... as yet, so we don't have visibility to the thresholds just yet. So as you said, it'll be early October when we get the information the same time as others, and so we'll certainly comment then. But I would say it continues to be a focus. As you said, we continue to be proud of the work that we've done. We are very high performing, so- Yeah. Lots of days, it feels like there's only one way to go, right? Yeah. Just because when you're at 94%, I don't know that we'd ever get to 100%. So continue to focus on across the enterprise and work to improve all of those activities, but too early, unfortunately, to share any details. As we think about, you know, some of the plan exits and members moving around, how does that impact Stars or not? Is that a watch area? It won't impact 2026. Okay. Right? So any enrollment activity will be more for 2027. Interestingly enough, plan exits in and of themselves do not have an impact- Okay. -on the Star scores because the plan won't exist anymore. There can be an impact if a member enrolled in a plan enrolls in another Humana plan under the same contract. So if we do retain that member, then the fact that they've plan changed does go into some of the calculations, like there's a retention calculation. Plan changes have always gone into that calculation, which frankly, we've been a little bit frustrated by because we said, "Look, we shouldn't be disadvantaged because a member decides to find another plan that better suits their needs as their needs change." But nonetheless, that's the way the calc works. So we, the last couple of years, have seen a high level of plan change activity in normal course, and so I would say the bar is already fairly high. If some of that ends up being disenrollments versus plan change, they count the same. Yeah. And then again, the fact that the Star scores are way, you know, on a curve, we would expect broadly, the industry is going to see an impact, so the thresholds would likely move on that measure itself. But specifically to plan exits, if the member disenrolls and doesn't re-enroll, then it actually technically has no impact to the measure. Got it. Another big focus area for people is obviously the, you know, the Part D redesign. You know, the company has historically made some, you know, trade-offs in terms of the underwriting margin versus benefits to the pharmacy segment. As you think about the incremental, you know, risk and premiums that you're taking on, how are you thinking about, you know, I guess, the range of outcomes related to that business, and eventually, how you want to think about underwriting those incremental premiums? It seems like they kind of have to carry a reasonable margin to justify the capital and the risk, but how are you guys thinking about the margins on the incremental from here? Yes, and so historically, we would say we've taken a more whole case underwriting approach in terms of the health plan, as well as the pharmacy benefit across the PBM and then the dispensing pharmacy. And historically, frankly, the margin has all been on the pharmacy side, the health plan. In some cases, like, the value plan has even been negative in some cases- Yeah. but in the entirety, positive. I think in light of the IRA and the additional risk that we're taking on, I do think generally, I would expect the plans priced for a higher risk margin and take a more conservative approach just to the underlying claims assumptions, particularly things like the pipeline of emerging drugs and the pace at which they may get approved, the cost at which they may launch, the adoption rates. I think you'll see people take a much more conservative approach just because the liability and the exposure is so much larger. We continue to advocate with CMS. You know, I would argue it's, the way it's designed is not a great way to do it. When you think about Part B, they've introduced a significant cost policy, which- Mm-hmm. You know, helps mitigate some of the potential exposure, which I think is the right thing to do, because otherwise, we're pricing for a lot of risk margin that, by and large, probably, hopefully, won't be needed. Yeah. And so just ultimately would result in margin. So I think over time, we're gonna have to figure out a way with CMS to make more sense of sort of the exposure and how to manage it. So I would say in general, I think the industry will price to a higher margin because of the risk that they're taking on. I think for 2025, given all the significant changes with the MOOP being implemented, we're gonna. You should assume that we will take a very conservative posture in terms of what we expect from that business, in terms of expectations, and then we'll just have to see how it ultimately plays out. I would say the demonstration, which only applies to standalone Part D, you know, obviously, you know, signals that in the absence of that, the premium increases- Yeah. Would have been quite large because of the IRA. There are some reasons that standalone Part D will see more exposure than MA, some of that's dual concentration, which they do tend to use specialty drugs at a higher rate and some other reasons. But I would say the demo will be interesting just to see how that plays out. Yeah. It's not applying to Part D initially- Yeah. But hopefully, the learnings from that may cause them to think differently about how they structure Part D as well. Okay. And I guess, how are you thinking about how wide the range of outcomes is for the first year of a program like this? I mean, I'd say they're wide. Yeah. Particularly because, I'd say mostly because we strove for stability in our book, and that was even before the demo, and is on standalone Part D. That was even before the demo. The risk that you are managing is, one, a lot of movement within your existing specialty. You don't want to attract a bunch more specialty users. You want to run off a bunch of lower utilizers, because the way that the IRA impacted the results is you used to get sort of for every catastrophic claim you got, CMS would pay 80% of that. Like, you didn't have to guess what it was gonna be, they would just pay it. So now you've got to assume how many of those will you have. You're going to get all those dollars shifted to direct subsidy, so lower utilizing members become much more profitable, and specialty utilizers become much more unprofitable. So the balance risk pool is what's most important. So we strove for stability. The demo further helps, hopefully- Yeah Create that stability. So I'd say you've got that general risk. The MOOP, we'll have to see, does it lead to some increased utilization? There's some other data points we could use across group MA, which tends to average our benefits. Yeah and some other things to inform how we thought about that. But we've been mindful of that. And then it's really the pipeline of drugs. Like, do you see accelerated approval for some of these things? That is a bigger area of risk. The risk corridor protection they introduced on PDP will help minimize the downside risk. And we think over time, some of those things will be important to just manage the actual level of premium increases that we'll see. Okay, got it, and just to switch to, you know, to Medicaid for a minute or two. I know you guys have a lot of moving parts, folks, very concentrated in Florida, which I think has still been performing reasonably well. You also have a lot of startups because you've done really well in terms of RFPs and organic growth there. Update us, I guess, on the moving parts of Medicaid, and how do we think about, you know, Medicaid earnings progression playing out for the next couple of years? ... Yes. So, and I know there's been a lot of discussion about, you know, acuity- Yeah. With redeterminations, and I think we probably took a little bit more conservative approach just at the outset of the year. So as it relates to redeterminations, we would say that the membership and the acuity are largely in line with what we expected. It's one of the reasons we called out Florida, specifically in our second quarter commentary. If we were gonna see pressure, that's where you'd see it, given the concentration in that book, and as you said, it was running slightly favorable relative to expectations, which is good. In some of the newer state implementations, we have seen some discrete areas of pressure consistent with others in the space. And so Oklahoma has seen some pharmacy pressure. There's risk corridors that kick in, so mitigate some of that, but certainly some rate correction for the state to do. Kentucky has seen some behavioral pressure, which is a function of rating as well as limitations that they put on our ability to manage it. So we've been working very closely with the state on both of those issues. So again, some discrete medical cost pressure, but we have seen responsiveness from the states in terms of rating action, even early. So we would say, in general, the totality of the book, we feel good about in terms of the 2024 performance. Some of the rate action we have seen will sort of improve the back half of the year relative to what it would have been, and then we would expect some additional rate improvement next year, such that you'll continue to see improvement in that book. Okay. Just coming off of redeterminations. Yeah. And then as some of those, you know, states that were recently implemented mature, because it usually takes two to three years to sort of mature the margin profile. So we do expect to see positive sort of improvement across that book the next couple of years, assuming it's continued sort of reasonable pace of new state enrollments. Okay, got it. And we think about, like, the totality of all of that for 2024, or you guys expect to make money in Medicaid this year, or generally, what's the level of performance? No. So still, given the number of new state expansions that we've done, and then the sort of adjustments you're gonna have just from the higher margin contribution during the waiver period. So no, still not in a positive contribution state yet, and that, you know, just over the next couple of years, as those recently implemented states mature, then we would get to a margin positive contribution overall. Got it. But individual states, they mature and you're contributing positively. And maybe the last question, just on the CenterWell and the primary care business there. I guess, how do we think about the kind of the earnings trajectory of that business? Obviously, you have the MA industry seeming to, you know, have been going through a broad repricing cycle. There's the interaction of V28 and comments you previously made that, you know, you think you offset it over time, but obviously in the early stages, it's tough. What's the latest thinking on CenterWell on the primary care side? Yeah. So we continue to feel good about the ability to mitigate it over time. As you said, the original assumption was that for V28, that we would see about a third of that mitigated by plan design changes. Okay. We would say, generally, we did not see that in the first year across the industry. So again, very anxious to see what benefit changes were made in 2025 and hopefully some level of catch up. But we continue to think that's a reasonable assumption over the three-year implementation period. And then all of the other initiatives that we believe will fully mitigate that we are on track for us. So it will take the full three years. You know, by the time we get to 2027, we feel like we will have fully mitigated that. And back on the original sort of J-curve trajectory that we laid out, the contribution will look a little bit different. There's gonna be some higher patient panel growth. Mm-hmm. Lower margin, but on an absolute dollar basis, still continue to feel good about that. So the team's on track. You know, we'll have to see again what benefit changes were made across the agnostic book for 2025, but I think given, again, all the commentary from providers, I think there'll be a lot of pressure to make the needed adjustments. Okay. Well, thanks so much. Yeah, absolutely. Really appreciate all the insight today. Thank you. Yeah, absolutely. Thanks for having me. Thank you.