All right. Good morning, everyone, and welcome to Molina Healthcare's 2026 Investor Day. I'm Jeffrey Geyer, Vice President of Investor Relations for the company. Before we begin today, I would like to remind everyone that today's event is being recorded, and shortly after the event ends, a replay will be available on the investor relations section of our website, www.molinahealthcare.com, where you can also find a copy of the presentation materials that we'll discuss today. Turning to the event, we'll start this morning with Joseph Zubretsky, our President and Chief Executive Officer. Following Joseph's presentation, Mark Keim, our Chief Financial Officer, will speak to the company's financial profile. After the conclusion of the presentation, we'll have a live Q&A session with Joseph and Mark, and they'll be joined by Jim Woys, our Chief Operating Officer. Please note that our presentation and remarks today will include numerous forward-looking statements, including, without limitation, the forward-looking statements described on slides 3 and 4 of the presentation and in the Form 8-K that was filed with the SEC earlier this morning. Please take a few minutes to review the cautionary language. Our forward-looking statements are made under the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Actual results could differ materially due to numerous known and unknown risks and uncertainties. These risks and uncertainties are discussed under the headings Forward-Looking Statements and Risk Factors in the company's annual report on Form 10-K for the year ended December 31, 2025, which is on file with the SEC, and in the company's other filings with the SEC. Our forward-looking statements represent our judgment as of today, Friday, May 8th, 2026, and except as otherwise required by law, the company disclaims any obligation to update any forward looking statements to conform the statement to actual results or changes in our expectations. I will now turn the presentation over to Joe. Good morning, everybody, and welcome to Molina's Investor Day 2026. You know, everything we do here at the company has a purpose, including picking the title of today's session. When we embarked on this journey, this new management team eight years ago, we built durable operational, financial, and strategic infrastructure, and that infrastructure created a sustainable, profitable growth model, top line and bottom line. Nothing has happened to that infrastructure. That machine, that apparatus, is still in place. What's happened is its fuel line has been temporarily disrupted. Rates. Rate and trend is out of balance, and when it comes back into balance and that fuel to the business, once again, the machine that we've created of sustaining profitable growth will again be in action, as you'll see here today. Second point I'll make is stylistic. We know you have a very important responsibility to your client base in trying to assess the investment thesis we're going to outline here today. You can only challenge an assumption if you know what they are. We're gonna unpack everything in painstaking, granular, and transparent detail so you know exactly what this management team thinks. You will not leave here wondering what we're gonna do. You may challenge it, but you're not gonna leave here wondering how we're going to do this. I cover six topics today. First, again, our style is we're gonna give the answer up front. Instead of talking to you for an hour and a half wondering where this is going, we're telling you where we're going, then every detail that Mark and I talk about for the next hour and a half can be in support of the answer which we're gonna give you right out of the gate. The investment thesis, very simply laid out, we're gonna do a franchise retrospective. We don't celebrate success here, that's not why we're doing this. When you look at what we're going to accomplish in the next three years, the best proof point is what did you accomplish in the past five? When you look at the trajectory of the business, top line, growth, margin sustainability, it puts a point on the art of the possible for the next three years. Yes, the current environment is a bit challenging right now. Everything that's happened in this environment, we dealt with before. The confluence of exogenous factors is pretty extraordinary, as many of you have recognized, but we'll lay those out and how management intends to deal with them. The next section, we're gonna talk about growth. We're gonna give equal prominence to rate recovery and margin restoration and growth, but we didn't want anybody to forget that with $42 billion in revenue and mid-single digit market share in Medicaid, there's plenty of growth still to occur. These are growth businesses. Whether it's by M&A or whether it's by winning new contracts or growing our existing footprint, we wanna unpack the growth story for you. Lastly, I'm often asked, "How do you do it? There seems to be some differentiating factor between Molina's performance and others. We're going to talk a little bit about that. We think it's just as important to understanding the investment thesis on not just what we're going to do, but how we do it. It is a differentiator. The answer, so you don't have to flip to page 65. Here it is. Our three-year outlook, we're calling it a three-year outlook for a variety of reasons. One is the longer term outlook might actually be more attractive. As we say internally, you know, five years you're dreaming, one year you're trading, three years you're investing. This is a good time frame over which to look at a valid and credible investment thesis. This is our three-year outlook. We're gonna go premium revenue from the $42 billion base that we have today to $64 billion over the next three years. You may think that 15% is pretty sporty, but as we unpack that, you'll see that much of that is already in the bank. It's in contract backlog. Wait a few minutes, we'll unpack that for you. Our consolidated MCR is gonna range from 91%-92%, 91.5% at the midpoint, which is 100 basis points better than what we're achieving in 2026. That results in margins at the midpoint of 2.5% on a pre-tax basis, which produces $25 of earnings per share. As we unpack this for you today, you're gonna notice that there's many sources of value, including rate recovery and margin restoration. There are other sources of value, many of which we are in total control of. That's everything you'll hear today from Mark and me will support $64 billion in revenue and a 15% CAGR, a 91.5% consolidated MCR, a 2.5% pre-tax margin at the midpoint, and $25 of earnings per share. In unpacking that for you can see the growth as it has been in the past is balanced. We're not relying on any one thing. We're not making some heroic assumption on rates. We're not projecting a huge number of contract wins. In fact, the contract wins that we're projecting are a fraction of what we have achieved in the last number of years. When you look here at the $64 billion revenue outlook for 2029, $5 billion of it is just by being there. Rates and modest growth, particularly in Medicare. Embedded future revenue, it's in contract backlog. Don't forget, Georgia, Florida KidCare, Texas STAR and CHIP. We have huge contract backlog that's creating $6 billion of the revenue growth. It's in the bank. Projected initiatives of seven. You'll see as we lay that out for you, that the win rate that supports that is a fraction of what we've achieved over the past number of years. Lastly, our expert M&A team, we believe can action enough opportunities to create $4 billion of revenue. $42 turning to $64, balanced across many initiatives. $11 billion, half of it is in footprint and in the bank. That's why the 15% CAGR is realistic, it's credible, it's supportable, and entirely achievable. Now, how do you get to $25 a share from $5, which is our guide for 2026? Again, very balanced. It's not all banking on the rate recovery that you see on the right side of the page. Only 25% of the $20 increase relies on that. Discipline. What do you mean discipline? If we're growing the top line to $64 billion, we're gonna get that same fixed cost leverage that we've harvested over the past number of years. This plan throws off enough cash to fund the M&A, fund organic growth, and to repurchase shares. $6 purely from operating discipline. Future revenue growth? Sure. Embedded earnings, projected initiatives in M&A producing another $6.75. Of course, as rates and trend come back into balance, both on revenue that's in backlog and on our current footprint, we're projecting $7.25 of improvement from margin recovery due to rates. Balanced going from five to 25, a 70% CAGR, very balanced in how we get there. None of the assumptions that underlie this are heroic. They're all data-driven, supportable, and achievable. Well, that sounds like a very precise analysis. $25. Yeah, there's variability around this. There are scenarios that produce less. There's scenarios that produce more. In fact, if you wanna see models, come inside the shop, you'll see models that produce many different ranges of outcomes. Faster growth, lower margin recovery, faster margin recovery, lower growth, and faster margin recovery and faster growth. They all seem to triangulate around the $25 number. We came at it bottoms up and top down, and this is where we landed. What if trend moderates? What if trend accelerates? Would there be variability around how fast rates respond to that? Sure. We think the $25 number is a very solid baseline. It's credible, believable, and data supported. If trend moderates and rates catch up faster, we could easily be at 3% pre-tax margins in 2029, which is $30 of earnings per share. Conversely, if trend continued to accelerate or did accelerate, then maybe you come in shorter. There's variability around it, but we really believe that the midpoint is solid. And we wouldn't put a number on a page that we didn't think was achievable. We unpacked some of the segments for you here so you can see how the segments contribute to this outlook. On the top swim lane is our organic growth assumptions, and we save you the effort of going back and looking at last Investor Day. We laid it out for you. On Medicaid, it's all about point in time. It's all about point in time. Even with some attrition from the One Big Beautiful Bill Act, we believe we can grow organically in Medicaid at 12%-14%. Why? 'Cause a lot of it is in the bank. The comparison to the last time we did this is really how much is in the tank when you're presenting this. Since much of it is in backlog, the 12%-14% organic growth in Medicaid is entirely achievable. In Medicare, which we're calling our rejuvenation line, de-emphasizing MAPD and emphasizing the duals. 10%-14% CAGR in our 2029 outlook. It's a high-growth business, exclusively aligned enrollment, really advantages somebody who's in Medicare and Medicaid, and the market itself is growing at 12%-14% a year. In Marketplace, which we call our rationalization business line, we're gonna talk about optionality. Rates will grow at 5%, probably more if trend continues to accelerate, but we're not projecting growth until we're sure that the risk pool has stabilized. Once the risk pool has stabilized, it comes out of the optionality category and maybe gets back into the growth category. Recalibration in Medicaid, rate trend, Medicare rejuvenation, focus on the duals, Marketplace rationalization, don't allocate capital until you're sure the risk pool is stabilized. Down below, we'll give you the MCRs that balance to that 91.5% view for the full company. Medicaid at 92, coming off a 92.9 for 2026. 90 basis point improvement. With merely a 90 basis point improvement in Medicaid, we're getting to $25 a share. You can see that Medicare, again 90-91, 90.5 at the midpoint off of where we were before, a realistic view of the profitability of the duals business. Of course, in Marketplace, as we've often said, always said, that the growth is the variable. The fixed component is mid-single-digit margin. We'll never put a price out there in the market that does not contemplate hitting a mid to high single-digit margin. Growth becomes the variable. That's the segment view. Everybody always knows sort of the elephant in the room for managed care these days is tell me about trend. What is your outlook for trend over the next three years? We believe trend will stabilize. Maybe it already has, but we have to wait and see in 2026 whether the second and third quarter data points support that. Why do we think it's moderated? Guys, healthcare costs are 21% higher today than they were three years ago after three years of high single-digit trends. Right now, we're forecasting Medicaid trend to be 5%. Our forecast only relies on that stabilizing, not decreasing to its historical norm, which is 3%-3.5%, but staying at 4.5%-5%. The post-pandemic acuity shift is behind us. We have a lower mix of lower acuity members. We're very confident that as you look ahead three years by looking at all these different aspects of medical cost trend, including what we consider our best-in-class management of medical costs, that a 5% outlook for the next three years is entirely reasonable. Okay, the counter to that is, okay, if that's what you're saying trend is gonna do, what are rates gonna do? Well, we're not in control of it, but Mark is going to really dive deep into this when he gets up here. Managed Medicaid is underfunded by 300 basis points. How do you know that? Because the data supports it. Not macro data, not meta, data at the local level, peeling through regulatory reports of every company that's out there in a single geography looking at reported MCRs. The market is underfunded by 300 basis points. If an actuarial pricing target, rating target is 1.5%, can be a little more in some states, but generally 1.5%, and the market is producing a 1.5% pre-tax loss, the market's 300 basis points underfunded. Actuarial soundness is fundamental to Medicaid rates. States continue to recognize the underfunding nature of many components of their program and keep giving the market off-cycle rates, retrospective and prospective. We got a few of them in the first quarter. We've been asked about the cost baseline. When is the baseline going to be taken as true? Well, we can't wait for the 2025 year to end up in the baseline. When the 2025 year is fully baked into the cost baseline, we think that the flexibility that actuaries may have to project trend off a baseline that is a bit, I don't know, unclear, that the ability to do that is low. When 2024 and 2025 are in the baseline, the flexibility to misforecast trend is lower. All of these factors point to a better rate environment versus a stabilized trend over time. That's why we're confident in the outlook we're giving you here this morning. Complicated investment thesis. Some people get really interested, and the more complicated it is, the more interesting and smart you sound about something. Our investment thesis is quite simple. We take capitated risk in government-sponsored healthcare and manage it as well or better than everyone else. That's what we do. It's that simple. Medicaid, Medicare, and Marketplace, we're a pure-play government-sponsored healthcare company. These programs have sustainability. We all know it's a barbelled economy. We all know that these entitlement programs are integral to the social fabric we have in the company. They're not going anywhere. They'll change from time to time as they are now, but they're not going anywhere. It's a sustainable business model. Given our market share, we can comfortably project double-digit revenue growth organically and through M&A. Now, we were at 4.5%, 5% pre-tax margins in our historical view, and now we're sitting here in Medicaid at 1.2%, 1.5% without Florida KidCare, which is a good place to start. We're going to show you a very credible path to attractive margins. Whether they ever get back to 4.5%-5%, time will tell. The $25 per share number is supported by 2.5% pre-tax margins in Medicare and Medicaid, and a little more in Marketplace. The balance sheet characteristics of this business are stellar. The cash flows, the return on equity of a dollar of organic growth on how much the rather meager capital requirements are, and the cash flows to the parent to generate the growth. The capital deployment characteristics of managed care, yes, it's in an insurance model. Yes, there are regulatory subs. The cash flow characteristics, the excess cash flow characteristics of this business are outstanding. Lastly, I'll brag about my guys toward the end here, the management team that produced the last seven years of result, the people, the process, and technology that produced the last seven years of results are here today, and they're proven. As I mentioned a few minutes ago, we're proud of what we've done. We don't celebrate it, but I present this to you to juxtapose the performance of the past against what I'm suggesting will be the performance of the future. We have a franchise. We built a franchise. You know, eight years ago, I considered this sort of a collage, a collection of contracts. We have converted that collage into a mosaic, into this apparatus, this machine that is structured to produce sustainable and profitable growth. You've seen the numbers. We're big enough to be relevant, and we're small enough to be nimble. This is what our goal is to create and to sustain an iconic franchise in government-sponsored healthcare. You know the numbers. I'm not gonna read them to you. The premium growth rate and at the same time producing margins at four and a half to 5% pre-tax is an incredible feat. An incredible feat. The generation of capital, over $8 billion, or $6 billion of capital generated internally. I won't read the numbers to you, but the tale of the tape from 2018 to our peak at 2024 is attractive. It was outstanding performance at the time, and we'll talk about where we are now. Whether it's the RFP win rate, our ability to acquire companies at 20% of revenue, whatever it has been, whatever the metric has been over the last eight years, I think we can all agree that it produced sustainable, profitable growth over that eight-year period. We like the portfolio. We like the diversification. In the golden age of managed Medicaid, I remember this back 20 years ago, most managed Medicaid companies had two or three large contracts and a bunch of hobbies, and every three years, you held your breath on the RFP. That's just the way it was. And they were great companies, and they did really well. Look at the diversification we have. Now, there's 42 managed care states in Medicaid. We have 20 of them, so there's room to grow. We're in 21 states altogether. Many states, even our biggest ones, don't represent, you know, more than 10% of revenue. The myth that you have to have $4 billion or $5 billion of revenue a state to make money, I'll debunk it right here. It's not true. We like the portfolio. It doesn't matter whether it's a red state or blue state or a purple state. That matters least. It doesn't matter whether it's in the middle of the country or on the East or West Coast. The portfolio is well-diversified, and the recent wins have really filled in this map over the last three or four years. The reason we're re-showing this again is go back to the chart I showed you earlier. Balanced growth. Are you swinging for the fences on any one thing? No. Are you relying on a hope and a dream? No. Legacy footprint with rates and organic growth. Strategic initiatives, 90% win rate on new contracts. That's pretty darn good. Acquisitions, $10 billion of revenue acquired in building this company from $16 billion of revenue at its low point to $42 billion today. Keep that in mind, and bear that in mind when you're trying to evaluate whether we can get from $42 billion to $64 billion. I say we don't celebrate things. I'm gonna celebrate this thing a little bit. This is, you know, 10 straight years of 100 win seasons. Nobody's ever had a stretch like this. A 90% win rate, $14 billion of retained revenue in our existing states. I'm telling you right now, these RFPs are fierce. Everybody's competing. The new guys that want in, and the existing guys want more. It is fiercely competitive. 90% win rate, $14 billion of revenue retained. New RFP wins, very proud of this. Our new business development engine and the team we have built, combined with our operators, not only tell a great story, but have the results to back it up. Anybody can write an innovative RFP. Do you have the chops to deliver? Do you have the reference-ability to deliver? 80% win rate, $20 billion of new revenue over the past number of years. Keep that in mind when we get to the growth section in terms of whether we can achieve what we say we're going to achieve. Our M&A history. Marc Menkowski, the head of our M&A shop, is here. A string of pearls right across the board, all shapes and sizes. Generally either orphaned assets or things that might have been in mild forms of distress. We've purchased these things at just slightly more than 20% of revenue. Bear in mind that half that is regulatory capital, so very little goodwill deployed, and hugely accretive. That's why we developed the embedded earnings concept. Embedded earnings, in our vocabulary, is backlogged revenue. It's not future performance, it's backlogged revenue that has yet to hit the top line in our P&L but is waiting to manifest itself. Mark will cover embedded earnings in a few moments when he gets up here. This is one of the main catalysts for our growth rate has been our expert ability to buy things at reasonable values and to get them from underperforming assets, open up the Molina playbook, aim these guys at it, and all of a sudden, you're at target margins. Hugely accretive. Well, you know this story. We hit a crescendo of $22.65 a share in 2024. That run was a 14% CAGR, while we were growing the top line at 19% during that same period of time. 4.5% pre-tax margins on average over that period of time. Will the market return to that former glory? I don't know. We're not forecasting in three years it will, but it could. It could. What happened? Right side of the page, starting in mid-2025. Remember we said 2025 was a tale of two halves. First half, we earned over $11 a share. Second half, trend and rate became tremendously imbalanced, which leads us to where we are today with a $5 guide, but line of sight to a $25 picture here by 2029. That leads us to a discussion of the current environment. Yeah, it is a challenging environment. Okay? Supporting the chart I just showed you on where the earnings are today in terms of the margin compression that this company has experienced, here it is by segment. 4.7% pre-tax margin historically in Medicaid softened, particularly in the second half of 2025, and now we sit here not at -1.5, but at 1.2. If you factor out Florida KidCare, it's 1.5. In the trough of this Medicaid rate cycle, we're at 1.5% pre-tax margins. That's a great jumping-off point to get to where we need to go. That is a great jumping-off point, but it has been a challenging environment. Medicare, same story, different reasons. Sure there's been margin pressure in Medicare generally, we know that, whether it's V28, risk adjustment, Stars, the whole thing. In that period of time, the Medicare book that we inherited with two acquisitions was not performing, which is why we decided to retire that product going into 2027. In Marketplace, volatile line of business year to year, sometimes it's volatile within the year. We're projecting a 1.7% pre-tax margin this year. Last year was a pretty bad year from a profitability perspective. Over time, that business has produced on average 3% margins over an eight-year period. The problem is it can be -10 and +10, and that's no way to forecast the business. Right now we're projecting low single-digit margins for 2028. That's the margin pressure that we're working our way out of right now. The story on margin restoration is somewhat different for each line of business. Mark will unpack that for you in a few minutes. This is what I was saying before. If you then drill down on Medicaid pressure, the market's underfunded by 300 basis points. That is almost an irrefutable fact. Public companies have reported where they are in managed Medicaid, the statutory, the regulatory reports are very clear where the market is. Those same reports actually support the fact that we're operating 300 to 400 basis points better than the market. At least in 2025 we were. We posted a 2.8% pre-tax margin last year when the market was at -1.5%, half of which was MCR performance, the other half was G&A. How do you have a 5.5% G&A ratio on Medicaid? We do. There's no hocus pocus there. There's no magic. There's no alchemy. We are very disciplined of our operating costs, Medicaid is operating at a 5.5% G&A ratio, which is sort of unheard of in the managed Medicaid industry. Industry's underfunded by 300, we're outperforming by 400. Keep that in mind as we start to paint the picture of margin restoration here over the next number of years. We could spend two hours on this page, but you know all this. Most of you have written about this. You have people in your shop that follow this stuff as well as we do in terms of the Washington scene, what happens at the state level. You can just go across the page. There are many challenges, regulatory challenges to the profitability and growth of these programs. Sure. We all know what they are. They've been well chronicled and written about by your good selves, and we've talked about them on our earnings calls. There's also some catalysts, particularly the actuarial soundness of Medicaid rates. Duals, catalyst, CMS, regulatory regime, exclusively aligned enrollment. I want a dual member who has both Medicare and Medicaid. I want those two products connected at the same parent company MCO. Somebody has a deep and wide Medicaid footprint. We'll talk about this in a few minutes. There's as many catalysts as there are challenges, but we're navigating through all this. There's not one topic on this page that I and the team has not dealt with over the past 20 years we've been doing this, 25, 30, 35 or 40. Not one topic. The fact that many of them are sort of here at the same time, is a bit challenging, but we're working our way through it. We have good line of sight to the impact of many of these issues. We have ways to work around them, certainly, the industry is strongly advocating against some of the things that are not well thought out that make great policy headlines, legislation that comes out of a committee without any operational content. Many of these things are not operationally well thought out when they're presented as policy alternatives. We know what they are. We're dealing with all of them. You've heard this story before. The preponderance of them is quite extraordinary at this one single point in time. Then, of course, the One Big Beautiful Bill Act. Now, we're going to, when we get to the growth section, show you a Medicaid membership attrition number that's 2%-3% annually decline, 2%-3% decline annually. We start in descending order, the work requirements, and everybody's got their own best number on what's going to happen there with the expansion population. Semiannual re-reverifications, same thing. Program integrity, states are just getting more disciplined about ex parte in and procedural out. Of course, in just a handful of states, the immigrant enrollment population will add some pressure. All of these combined, we're looking at a 2%-3% decline in Medicaid membership over the next three years annually, but with only a minor acuity shift. Mark will take you through that on why we believe that's true. Yes, this is another a lot of headlines these days, what's the One Big Beautiful Bill gonna do to managed Medicaid? It is completely contemplated in our outlook. The headline is 2% to 3% membership decline each year for the next three. These are growth businesses. They say, "Well, how can a business that was 92 million in members, it's going to 70?" Well, it's rebaselined. The barbell of economy isn't going anywhere. Entitlement programs are still in place. By the way, with only 5% or 6% national market share, 10% to 12% in service in state, there's plenty of room to grow. In only 21 states out of 42 that have managed Medicaid, plenty of room to grow. These are growth businesses, which is why we're forecasting growing from $42 billion to $64 billion at 15% CAGR in the next three years. Our style has always been, we're not just gonna tell you what we're gonna do, we're gonna show you how we're gonna do it. Medicaid, 12%-14% organic growth. 2% in the footprint. That footprint growth has been about 5%-6% over the last number of years, but there's the 2%-3% attrition assumption that's gonna offset what happens in rates. Rates will grow 4%-5%, that's in our forecast. Volume will come off by 2%-3%, the footprint is going to grow less dramatically and not contribute as much as it has in the past because of that membership attrition. Embedded revenue, it's there. All we have to do is get those contracts out of whatever administrative procedure they're in, get them effectuated and implemented, and the 6% embedded revenue growth it is real. It becomes top-line growth. Projected initiatives, winning RFP states $6 billion adds 4%-6%, and we'll show you how we get to $6 billion on the next page. By contract inception year, not when the RFP comes out, not when we're working on it, but by revenue inception year, contract inception year, there's $90 billion that has the ability to end up in someone's P&L over the next three years. $10 billion of it in 2027, $25 billion, and $55 billion in 2029. A little back-end loaded. That's okay. $90 billion, and you can see the states right there. We have our eyes on all of these. $90 billion of contract value, if four or five players win, your market share is going to be about 20%, maybe 25%, but 20 is a conservative number, which means the revenue opportunity is $18 billion. We're projecting a 1/3 to a 33% win rate. Look at the note next to it. The historical win rate's been 80%. You know, 33%'s a batting average. We have, you know, free throw percentage is our win rate. 80% win rate, we're only projecting 33%, which is $6 billion of growth. Nothing's a layup in this business. It's highly competitive. Look at the track record. When I said, remember the track record, remember the track record and judge for yourself whether this is reasonable, conservative, or aggressive. I know what I think. Proof point. For some reason, I've had to talk a lot about this. I get it. It's $6 billion of revenue, and people wanted to understand it. It's been a lot of chatter in the market about it. The proof point, the most recent proof point on our skill in this area is Florida CMS, we'll call it Florida KidCare. The contract right now is in full implementation mode. $6 billion of revenue at full run rate. We were able to tell a story, not just a story, but a referenceable story supported by facts, supported by real infrastructure of what we do nationally. If you're not good at high acuity and you're not good at BH, you can't service this contract. We're good at both. If you don't want high acuity business, you shouldn't be in Medicaid. We seek high acuity businesses. These are very complex cases, and this is what we do best. This $6 billion program, we're highly confident this gets to target margins. Mark will take you through what's in embedded earnings related to this contract. The latest proof point on all of this is something that we have only learned in the past, I think, 45 days, and that is, how's the business performing today? I mean, it's a live contract. How do you know you can get to target margins if you don't know what you're inheriting? Well, we know now because we have cost and claim information from the state, and we've got the entire rating regime. Got it all laid out. This business is producing mid to low single-digit pre-tax margins today, which gives us confident that we can hold onto that over time. In our view, this is a winner. Testimony to the RFP team, testimony to the operational team, our clinical people who are creating best-in-class infrastructure for handling these very complex medical and behavioral cases. It's all there. We can't wait for this to incept in the fourth quarter of this year, and we look forward to at least breaking even on it in full year one and getting it to target margin in year 2. Proof point on our ability to win. The Medicare dual's organic growth at 10%-14%. 12% is just by being there. First job, first job was converting the MMPs. I don't know if you're familiar with these MMP, these demonstrations, but we had 80,000 members and a little over $2 billion of revenue in these demonstrations. The demonstrations were sunset at the end of 2025. You just inherited the new program. No. We had to bid on, we had those went to RFP in Illinois, Michigan, and Ohio, and we ran the table, we swept them. First job, convert your MMP 80,000 members and $2 billion of revenue to a commercial-based HIDE and FIDE product. Highly competitive, we won. That was job number one. Job number two is now make sure it's competitive. We believe that this is a high-growth business. We believe the footprint can grow at 4%. Trend in rates might be 7% or 8%, giving you a 12% head start on the current footprint. The MAPD exit is fully accounted for in this model. Projected initiatives, which is a slight increase to market share, all produces a 10%-14% growth rate. Like I said, nothing is easy, when you start to unpack this and look at the detail behind it's data supported, and we believe entirely achievable. 10%-14%, 12% at the midpoint growth rate in our Medicare Duals business, even after accounting for the exit of MAPD, which is about $1.2 billion of revenue. Here's the reason. Exclusively aligned enrollment is a catalyst. It's not a panacea, it's not a silver bullet, it's a catalyst. The rules, both at the state level and at the CMS level, favor a company that's got a D-SNP product from the state, a D-SNP license from the state through a SMAC agreement, and a Medicaid footprint for those two products to come together in a very integrated way to offer a seamless benefit to a dual-eligible. If you look at our market share today, you know, with 16% service area market share, our duals market share is only 6%. We think that can go to 10%-16% over a period of time and get to that same level. All boats don't rise to the same level, but that's sort of the model. There's no reason why it shouldn't. We're only relying on a 1% increase in market share to support our growth thesis. Not 10, not 6 digits, a 1%, going from 6% market share to 7. You can do the math if you think that's conservative. What happens if it's eight, nine, or ten? Easy mathematics. Very conservative, 1% increase in market share in our footprint because of how we're gonna distribute, how we're going to increase our stars performance, our product design, and the fact that we do this really well, and we are just credentialed by three states saying, "You're one of the best at doing this." Increase duals market share. 1% when the market would suggest that that could be multiples of that. Next. Optionality to Marketplace. I gotta see the risk pool stabilize. Mark would agree with that. We're aligned on this. The risk pool is still a little unstable with market movements, regulatory changes, subsidies in, subsidies out, SEP in, SEP out. When members come in and out of this, and you don't have a good line of sight over the duration of membership and what risk adjustment will look like, it makes it a little bit of a perilous pace. Other companies have done better than we have in this business, and I applaud them for it. Right now, we're holding this out as an option. In our growth model, it is merely an option. When we see line of sight, both from a competitive perspective and a regulatory perspective, that the risk pool might have stabilized, we can go back into it from a growth perspective. We talked about M&A before. The track record of $10 billion of revenue has been outstanding. We've purchased our properties for a little over 20% of revenue, which means we've deployed very little goodwill value to acquiring these properties, and we've got them to target margins. As testimony to the fact that when we buy a property, it goes into embedded earnings, and then it comes out of embedded earnings actually into the EPS run rate. It's not theory, it's actual. It actually happens. Right now there's a lot of distressed property in the market. As you can imagine, with the margin compression that's happened in the industry, we believe that valuations have also reset. That's pretty obvious. Whether we're willing to pay 20%, 22% of revenue anymore, I don't know. I'm kinda thinking book value. There's a lot of distressed property in the market, many of which we've walked away from because there's a difference between distressed and broken. We like distressed, we don't like broken. We can get these things to target margin. The M&A pipeline, the M&A story in the pipeline is a very important part of the story and one I have a high degree of confidence in. Marc Menkowski here and his team do a great job sourcing proprietary deals, moving them along through the process, and executing, you know, with operational and financial excellence. Key part of the story. Now, sometimes I've asked, like, you know, something differentiates Molina. I would agree, something differentiates us. The results in the past have suggested that's true. Everybody, you know, brags about their team and their business, but at the end of the day, you know, show me the numbers and I'll tell you whether I actually believe you're better than the other guys. Competition is fierce in this business. Our competitors are highly respected. There is something about what we do here at Molina that is differentiating. I'm going to talk a little bit about how we execute the fundamentals of managed care, our operating platforms, the playbook, the Molina Manifesto, and boast about my team a little bit at the end. In 2018, in January of 2018, eight weeks into the business, eight weeks into the company, I was presenting at a big investor conference, and this wheel went up. You say, "Well, the wheel hasn't changed in eight years?" No. The fundamentals of managed care, a blocking and tackling and executing on the fundamentals will never change. There's different ways to come at it using technology more effectively, in the future using AI. The fundamentals are the fundamentals. If you can't do this well, everybody gets the same rate, everybody has the same corridors. With 25% market share, everybody has the same cross-section of membership. How does one company outperform on the MCR? That. There's no other reason. If everything else is at par, this is a differentiator. You go right around the wheel on how it's done. Whether it's utilization management, care management, the clinical side of it, whether it's just expert payment integrity, making sure you're paying claims exactly and according to the contract, whatever it is, we do it really, really well. A lot has been written about behavioral, just as a case study of if you look at the components of trend inflection here over the last two years, you know, what are you doing different? Well, we're always doing something different. We're not perfect. You're always diving into areas that are performing hotter than they have in history and drilling down into them and figuring out what's going on. I'm not going to take you through everything that's going on behavioral, but we have an expert behavioral clinical team, an excellent behavioral operational team. One of the reasons why we're so confident in Florida KidCare is because of this. 20% of our Medicaid members have a behavioral condition. That cohort trends at 9% a year. The behavioral side of that cohort trends at 16% a year. You got to be good at this. Whether it's SMI or OUD, whatever it is, we all know that the range of diagnosis in behavioral is a lot wider and more variant than it is in medical, and the treatment protocols are very much wider and more flexible and more judgmental. You got to be good at this. Whether it's this or LTSS or high-cost drugs, this is the area of focus. It's that wheel of managed care, knowing where the next point of trend pressure is and getting on it and drilling into it. This is a bigger deal than it may sound. Our operating platforms are uniform. After all your acquisitions, you have one operating platform? Yes. We have one version of our claim and administrative platform. We have 14 instances of it, but one version. What does that mean? It means when you go to plug something into it, you don't have to figure it out 21 x. We've had the discipline through our acquisitive period to synergize and integrate everything we've done. one way of doing business, one administrative platform, all acquisitions fully integrated. All our stuff is in the cloud. Other companies may say that too. Data center's gone, everything's in the cloud. From a security perspective, from a perspective of uptime, all those things that we worry about from an operational perspective work well at Molina. Now, we're good at this. Our G&A ratios not only reflect that we're efficient, but our operational ratios and metrics prove that we're effective. We still think that over time, three years, with $22 billion of revenue coming on board, that we can actually drive 50 basis points more of productivity and fixed cost leverage into our G&A ratio. As Mark will show you, that 6.5 coming down to just below six, without skipping a beat on making sure we keep the trains running, keep our customers happy, a great member experience. This doesn't get talked about a lot. The way we approach this is with a great deal of discipline. One platform across the entire company, which also gives you great insight into your claims and cost data. That should be underscored. I mean, we could spend a lot of time doing this. We just put this in here because we know it's top of mind. We know other companies have talked about it. We don't have the time to drill down on this today. Not only are we not ignoring it, we're fully immersed in an AI model that will first, three phases. One, do managed care fundamentals more efficiently. Second phase, reimagine the fundamentals of managed care. The third phase, whether the industry ever gets there or not, can you reimagine the way managed care is done, period. First and foremost is, can I get marginal cost savings in the next couple of years before I reimagine it and before we throw the whole model up in the air and say, "Managed care is just different today"? That's many years out. We believe that in the next number of years, we can get another 100 to 150 basis points in our cost ratios, probably mostly in G&A, but some in our MCR. Over the next number of years. It's not in our forecast. I want to be very clear. We have 50 basis points in our forecast that comes from mostly fixed cost leverage on G&A. We think there's another 100 to 150 out there that is not in the forecast. We're on this. We have an intense management team and platform that is working this hard, and we believe and know that this will add value over the next couple of years that's not contemplated in our forecast. I've been asked about this a lot. Some people have actually asked to see it. It's hermetically sealed. It's under glass, under pressure. We don't let it out. Nothing in it is gonna surprise you. Nothing in it is gonna surprise you at all. You're gonna read it and say, "Oh, decision rights. That sounds pretty basic." Yeah, is it clear? There's nothing about our playbook that's magic. Our religious and our obsession with it is what's different. Many operational models, management processes, org designs can work as long as there's religious adherence to it. 18,500 people are doing the same thing for the same reason. That's the difference. We tell people that come in here, you come here, you play in Alabama football. You wanna fling and bling, go to LSU. You wanna run the wishbone, go to Oklahoma. Here, you play in Alabama football. This is the way we do it. This is the way information flows. This is the way we make decisions. We run flat, we run hard. We don't have headquarters generals, we have field generals. Spans of control are very flat and very wide. It's a way of doing things individually, none of which will shock you or surprise you or astonish you, the collection of which creates a culture of performance that we believe is unparalleled. Lastly, I'll brag about my team. The statement at the top of the page was a bit tongue in cheek, but it actually is a cultural statement. I didn't put an org chart here, but I have names. I mean, I'm very fond of our team. I spend tons of time with them. Not just these guys here, but dozens, if not hundreds and hundreds of people. They're really good at what they do. We have subject matter experts, but it's the way they discharge their responsibilities is differentiating. We have a collection of individuals, you know, battle-hardened veterans and young up-and-comers who are innovative and creative. It's a, it's a incredible collection of talent, and we've created a culture of performance. Everybody who's in our company, the senior leadership team, knows that the name on the front of the jersey means more than the name on the back. They'll do anything to produce the results as a commitment to our constituents, and that's what's differentiating. They lead. They don't just manage. They put team before self, and they have high integrity and character. I'm very fond of them, and you've gotten to know many of them over the years. That's how we do it. That's our story. I gave you the outlook for the next 3 years. We wound through the growth model. The operational excellence is not what we do, but how we do it. Speaking of team, with that, I'm going to turn it over to one of my best teammates here, someone you know and have come to deal with over time, Mark Keim, who's going to take you through our compelling financial profile. Thanks for listening, guys. Is that mic on? Is that working? Great. Good morning. It's good to see so many familiar faces out here. Let's get to the numbers. We're going to go through six topics, just like Joe did this morning. First and foremost, what's top of mind for all of you is margin recovery. We'll spend a lot of time on that. That's going to lead neatly into 2026 guidance, 2027 outlook. We'll double-click a little bit more on 2029, the numbers that Joe laid out. Lastly, capital foundation. How does the whole thing come together? Let's get into it. Margin recovery. We're coming off two years of really high trend. It's not news. The chart shows it well. Historically, 3%-4% average, 6.5% in 2024, 7.5% in 2025. We've broken those high trends into two components. One component is the acuity shift that we've talked a lot about. The other one is core. Think of core as the underlying sustaining run rate of trend, whereas the acuity mix shift is just that. It's a mix shift of members. I'll talk more about the acuity mix shift in a moment, but let's talk about the core. What's driving core? We're at 5%. Is that the new normal? Maybe. What's in there? High cost drugs are a big part of it. Anti-inflammatories, HIV, diabetes, GLP-1s, and on it goes. Behavioral health services. Joe talked about this. What's in BH? We think of it in two categories: substance use disorder, SUD, and SMI or mental health conditions. Definitely utilization running high, rates running high. Prevalence of chronic and high cost conditions, yes. More complex visits and procedures, yes. Subtly, something we're starting to see a little bit more of to take note of is on professional office visits. The mix of level 1 through level 5 visits, we're seeing a few more 4s and 5s than we used to. It's subtle, but something to keep our eyes on provider upcoding. Joe mentioned across three years, medical cost trend is up 20%. The baseline is up 20% from where it used to be. That's an inflection. A few words about the acuity shift. I think this is a constructive way to think about it. April 2023 is when redetermination started. That's three years ago now. Time flies, right? April of 2023, there were 95 million people in Medicaid. 95 million people in Medicaid. three years later now, there are 77 million. Medicaid has come down 20% across three years. Within that, at Molina Healthcare, we track a metric we call low acuity users. That mix, since redetermination, is down 5%. The people with really low costs are down as a mix 5% within our book. What's interesting is, yes, 5% since redetermination, look since we've been tracking it's down meaningfully. This is the lowest we've ever seen it today. That sets you up well then for the medical cost at the bottom of the page. We're up 20%. Lay that out against the mix of low acuity members as the total population came down, you can see that sure, there's core costs driving trend, that acuity shift drove a meaningful part of it. Those low users came out. We're up 20%, about 5% of that trend is that mix shift. It's an interesting way to see it. It gives Joe and I a lot of comfort that, one, you're not gonna see another decline in membership like this. Even if you saw a subtle one, the bolus of low users, the low acuity folks, the bolus of them are out of the system, so you might lose some value on volume. I don't expect you'll lose it on margin. It's an important point for where we are. Without a doubt, trend has been underfunded. We all know that. Rates are not where they need to be. Rate advocacy is a big deal here at Molina. We kinda take 3 approaches on advocacy. Our plan presidents are kind of the local face of the market with the local regulator. Our government affairs team is really more on the national policy side, and the real engine of it's our actuaries. The state health plan associations are a really important tool. Why? Underfunding of rates is a market problem, not a Molina problem. Working with the other health plans in a given state, the association, we can attack that as a team. Finally, increased use of managed care initiatives. There have been states that for one reason or another, have turned off what Joe called the wheel of managed care, certain parts of the wheel of managed care. When they start to see the trend in the data that we give them, they're quite anxious to let us turn back things like utilization management for behavioral health or high-cost drugs, whatever it might be. That's an important part of advocacy as well. On the actuarial review, sharing data is the ultimate tool with the actuaries. We do that really well. Sharing general trends, but also discrete items, what's called rate cells. Certain things are discretely rated for pharmacy, BH. Sharing rate cells for discrete items to make sure that discrete items are properly funded. You know, I wanted to take a moment just to talk about how the actuarial process works 'cause I think this is helpful as you all think about what might be the trough year and why rates are probably gonna recover here. The way the actuarial process works is, for example, 2026, the rates that we get for 2026 were set on baseline 2024 data. Why is it a two-year lag? Well, the concept from the actuaries is they wanna see fully developed baseline data. They don't wanna see any more estimation, full run out, there's no question about what the baseline data is. Okay, they wanna go back to 2024. How the 26 rates come about is they take that fully developed 2024, they estimate what trend might have been in 25, and they project what might trend be in 2026. That gets us to the rates. The problem with that is you're using rock solid, indisputable baseline, but you got a lot of room for the estimate of those two years of trend. When we look at 2027, we're optimistic that things are gonna be a little bit better. In 2024, when they looked at the baseline 2024 for 2026 rates, the 2024 calendar year, but what a lot of folks don't realize is that 2024 calendar year actually straddled a bunch of fiscal years. Many states run on fiscal years that are different than calendar years. That 2024 base was for almost half of our revenue straddling into 2023 and 2024. Well, remember, 2024 and 2025 were the big inflection. If the 2024 base rate really included a lot of 2023, you're not capturing a lot of the inflection. When we go to 2027, we'll be using 2025 jump-off point. Even if it's straddling into 2024 a little bit, that's a very powerful place to be because that now represents so much of those two years of big inflection we saw. We're optimistic that 26 is the trough year for a variety of reasons, but that's an important one on the actuarial side. Here's just a quick word about how the actuaries actually rate and put rates into the market. As you can see, here's an example market. The market runs at 94. Molina runs at a 92. It's an example, but it's indicative of typically we're about 200 basis points better on the MCR line. That 94 is where rates are set, not Molina's 92. That 94 is made up of Molina's 92, but it's also the average of plans two, three, and four. Rates are set at the market average. The question I get all the time is, "Sure, Molina's best in class on the MCR, 200 basis points better, but is that sustainable?" As long as Molina can continue to outperform the market average, of course, it's sustainable. Rates are set at the average. We outperform the average, it's sustainable. You've seen that for the last two, three, four years, a very sustainable advantage to the market. It's an important point. Pushback is, well, wait a minute, can't you cut corners to do that? Maybe you're doing something you shouldn't be doing, and that's really why you're outperforming. The last bullet on the page talks a little bit about quality requirements. Every state publishes a set of metrics, quality standards that you have to perform against. At the extreme, if you fall short, you'll lose your contract. More subtly, there's either penalties or what's called quality withholds, that if you don't hit your metrics, you lose revenue. Many states have roughly 2% of quality withholds. If you don't hit your metrics, you don't get 2% of your revenue. In a business that has whisper-thin margins like Medicaid does, if you're not booking 2% of your revenue, you have a problem. Molina's been really good about getting the vast majority of our quality withholds. Put another way, we couldn't put up these numbers if we didn't. We're delivering on our quality metrics, and we're performing at the MCRs. Rates are set at the total market, not Molina specific. Important points. Joe showed a version of this slide this morning. The punchline is we believe the markets, Molina footprint markets, are underfunded by about 300 basis points. Our analysis through stat filings, discussions, and reported GAAP numbers show us the markets in our markets are running about 1.5% pre-tax loss. Actuarial target's 1.5. They're 300 basis points underfunded. Molina, on the other hand, our guidance for 2026 is 1.2%. Joe laid out a target of 2.5% for the whole company as well as Medicaid. How does Medicaid get to 2.5? Well, we're jumping off 1.2, really 1.5 without Florida CMS, but put that aside. We're jumping off 1.2. We're gonna improve our G&A ratio by 50 basis points over the coming three years. I'm gonna talk more about that. There's 50 basis points of recovery right there. If we want to get to 2.5, we just need 90 basis points across three years. Market needs 300 basis points. We need 90 basis points. We need a third of what the market needs. I like our odds in that situation, and something I think that bodes really well for the company. If Molina gets the 90 basis points, we hit our target margin. The market gets the same 90 basis points. Well, wait a minute. The market's losing 1.5 percentage points. They get 90 basis points. They're still at 40, 50 basis points pre-tax loss. We're hitting our numbers. Three years from now, the market is still sustaining losses. Tough to see how that plays out. It bodes well for this set of numbers. Should the market get the full 300 basis points? Of course, they should. Will they? Tough to say. Are the odds good we'll get our 90 basis points? I think so on that logic. Roll up the whole company, segment margins. Joe gave you a taste of this this morning. Medicaid, I just walked you through it. 92.9 goes down to 92. That's the 90 BPS we just talked about. In addition to the 90 BPS, you get the 50 of G&A. Look at the pre-tax margin, 1.2 goes to 2.5. Pretty straightforward math. Medicare, it's about 15% of the portfolio. Look at the pre-tax margin. A loss of 1.7 goes to 2.5 across three years. Well, don't forget, smack in the middle of that is the MAPD program. MAPD, we're losing $1 a share this year. We're gonna exit that program at the end of the year. Once that comes out, that 1.7 loss goes to breakeven. You're almost halfway there just on exiting that program. The duals, which is the remainder of Medicare, $5 billion of revenue today, they're at breakeven. We're very confident with our stars profile and a number of our initiatives, we can get that up to 2.5. 2.5 would be a fraction of how these things have historically run. We feel good about that. Marketplace, 5% of our book, we target mid-single-digit pre-tax margins on that. On the consolidated line, 92.6 drops 110 basis points. You can see the whole company's going from 0.8 to 2.5 target. Hopefully, that's a pretty good walk of how we're thinking about margins. Lends itself really well to jump into 2026, 2027, and 2029. All right. 2026 guidance. Middle column was what we reported in the first quarter. Right-hand column is guidance. When we gave guidance back in February, we said expect about two-thirds of the full year earnings in the first half. We're right on track to do that. $2.35 in the first quarter. Full year guidance unchanged at $5. Very front-end loaded. One, the rate cycle, two, Florida CMS. There's a bunch of reasons for that. We're right on track. Look at the MCRs, 91.1% on a consolidated basis in the first quarter. We've left ourselves a lot of room for the back half of the year. 91.1% for the first quarter, 92.6% across the full year. A lot of room for the back half of the year. Adjusted G&A, we ran a little bit higher in 6.9% in the first quarter. Full year guidance unchanged, just timing. We've got a number of expenditures and projects that make that a little bit lumpy. We're right on track. Oops. Some of the other highlights from the quarter, all of our segments did better than we thought, a little bit. We reaffirmed $5 for the full year. We said that before we revisit guidance, we want to see first and second quarters to really have a firm handle on the jumping-off point. A lot of volatility with trend, transitioning Medicare products, and finally Marketplace, always volatile. We want to see two quarters before we revisit $5, but certainly a good setup for the first quarter. In Medicaid, same-store attrition, we took from 2% up to 6% for the full year. Two quarters in a row, we saw a little more attrition than we were expecting, about 1.5 per quarter. More to the point, three states in particular drove most of the decline, California, Illinois, and New York. We thought it was prudent to recognize that's probably going to play out through the rest of the year. Full-year rates at four unchanged, full-year trend at five unchanged. Medicare Marketplace, we talked about transitioning MMPs. Year-end Marketplace membership, in the first quarter, we were at 305,000 members. That's half of what we ended last year with. A meaningful and purposeful decline in membership on Marketplace given the volatility. I expect that'll shrink to about 250 by the end of the year. That's normal seasonality. We've got about 70% renewal in the book today. Embedded earnings. Well, if you're going to take down target margins for the company, you're going to take down embedded earnings. Target margin used to be four to five, four and a half at the midpoint. We're now two and a half. Commensurately, embedded earnings, we're going to go re-baseline those as well. When we talk about embedded earnings, two categories. There's what's in our current revenue. The revenue's there, the earnings aren't. Future revenue, the revenue's not in our P&L yet. That'll be next year or the year after, and then you get the earnings as well. In current revenue, a few things are in there already. The Medicare duals wins, remember they're at break even. I got the revenue, I don't have the earnings. ConnectiCare Marketplace, got the revenue, don't have the earnings yet, break even. The Florida CMS, we've got about a $1.50 drag from all the implementation we're doing to get ready for revenue that incepts fourth quarter this year and the rest next year. Roll those three together, that's $2.75 at 2.5% target margin. Future revenue, about $6 billion. We talked about this this morning. A bunch of things in there. Joe mentioned Florida CMS, Georgia, Texas. Going the other way, a loss of revenue exiting MAPD, that's about a $1.2 billion loss. Roll all that up into the $6 billion of future revenue. The EPS equivalent on all that is $4.25. The last component, the $2 at the bottom of the page, we're going to drive 14% revenue growth next year. We've had really good discipline about keeping fixed costs fixed. In the presence of 14% revenue growth, if I can keep fixed costs fixed, we drive a lot of value on the G&A line. That 14% revenue growth gives me 20 to 30 bps advantage on the G&A ratio. That 20 to 30 bps is worth $2 a share EPS. Embedded earnings now $9, down a little from where we were before. Really important point for all of you, within the $9, $4.50 is known to come out next year. The items in blue help you to see that. Florida CMS implementation costs, that's the drag we have this year, by definition, goes away next year. MAPD exit, we're losing $1 on the MAPD this year. Next year, the revenue goes away, but so does the dollar loss. You get that. Finally, the rest is math, $2. As long as we keep fixed costs fixed, which we do, $2 of EPS. You roll that through, $4.50 of the $9 is known to come out next year. Maybe some of the rest does too, not ready to speculate on that yet. Really important point on the embedded earnings. Sets us well for 2027. Premium outlook, we're not going to give you guidance for 2027. How would I do that in May? The building blocks are pretty clear and apparent. Let's lay them out, and I think it'll help you with your models. If we're jumping off $42 billion, we get $1.5 billion just on rates and membership. Embedded future revenue, total is $6 billion. You get $4.5 billion next year. Joe rattled through these this morning. We're working on a few other things, not really ready to make any announcements, but I think it's important to have a placeholder for other initiatives. You roll that up, you've got visibility to 14% growth. On the EPS side, once again, this is not guidance, these are building blocks. Insert your own assumptions on top of these. Jumping off $5. We talked about $4.50 of the embedded earnings coming out, known to be harvested next year. The Florida CMS, the MAPD, the operating leverage. There's a placeholder in here for other embedded earnings. Not ready to populate that yet, there's got to be something there. Lastly, legacy Medicaid MCR. If we believe, and we do, that the rates are underfunded and rates need to catch up with trend, how much is that gonna be next year? I can't give you a view yet. Academically, we would think it's something. You'll need to put your own assumption in there, but that's a very helpful mechanic to drive your models on how you might think of next year. 2029. I'll repeat a lot of what Joe said here just because hearing it a second time may be helpful, but I'll also double-click on a few things. The revenue target, Joe went through this. We grow 50% in three years, 15% CAGR. We jump off $42. Current footprint, rates, membership, embedded future revenue, the four things Joe talked about this morning, the projected initiatives of seven that Joe walked you through, and finally, the M&A of $4 billion. What I like about this, 50% of this Joe said in the bank, 50% of this is known. Sure, 15% is a lot of growth. By the way, it's the same growth we exhibited for the last seven years. Half of it's in the bank. Half of it's known. We got to go execute the rest, but our track record is pretty good on that. We'll talk more about that in a minute. You know most of the numbers. The projected initiatives, let me remind you just in the $7 billion what Joe said this morning. There's the $7 billion. Where does it come from? seven is six of RFP wins and one of duals market share. The six of RFP wins comes out of an $18 billion opportunity that Joe mentioned. That's a 33% win rate. You know the story. Our track record is 80%. I like our odds. In the seven, the other $1 billion is Medicare market share. Joe identified a $6 billion opportunity that would be a little ambitious to put the whole six in. We took one. I like our odds. Lastly, Marketplace. We're someplace between $2.5 billion and $3 billion, call it $2.7 this year on premium revenue. If we were to double that next year, call it $3 billion of opportunity, that's not in our model at the moment, but it's certainly an opportunity. We'll see how the year progresses. To believe $7 billion are projected initiatives over the next three years, you have to assume we can execute on 25% of this opportunity, and we've done it before. Let me roll up the segment targets. Medicaid, 13% growth at the midpoint. Most of it is what Joe called money in the bank, stuff we've already announced, as well as rates and membership trend. At the midpoint, 92%, that's only on the MCR, that's only 90 bps better than we are today. For the whole company, 12% growth rate organically. You stack the M&A assumption on that's how you get to the 15. For the company, 91%-92%, 91.5% at the midpoint on MCR. G&A ratio goes below 6%. You're at 2%-3%, 2.5% at the midpoint. Gosh, we've been talking a lot about these G&A efficiencies today. I really do need to expose that a little bit more. Here's our G&A ratio, 6.4% today. We'll grow 50% over the next three years, 15% CAGR, half of it's known. How do I get such a meaningful contribution? 6.4% goes down below 6%. 50 BPS, by the way, that's $5 a share. You know, a really simple way to think about it, we have complicated models, but a simple way to think about it, that 6.4% G&A ratio implies $2.8 billion of operating expense, G&A. Take the $2.8, half and half, fixed and variable, grow the fixed at inflation, grow the variable at 50%, that's the top line growth. You'll get a G&A ratio meaningfully below 6%. It's just math. If you believe the math, and I do you believe we can hold the operating discipline to hold our fixed costs fixed? Because otherwise, it's just spreading the same cost across more revenue. Of course, you're gonna drive value. We like that a lot. 6.4% falls below 6%, 50 basis points of value. What's not here, in many ways, I'm more excited about some of this, is we left a placeholder without numbers on artificial intelligence. Joe said 100-150 basis points. We are excited about a number of use cases, not in our numbers. It's all upside. This is happening fast, and there's real value there. A hundred and 150 basis points on top of all this, not in our model, but that sure gets my attention. We're very focused on these things. All right, this chart's busy. Joe showed a simple version of this chart up front, if I didn't break out the components, I know you'd ask me, here they are. Joe mentioned operating discipline, $6. There it is. $5 of the G&A ratio, that's the 50 basis points. We circled the $2 because that's the part that's in the bag. 14% growth next year is known. We'll harvest $2 out of that. That's already done. The other $3 is the rest of the growth. $1 a share repurchases, that's not a heroic assumption. We use the term maintenance repurchase sometimes, which is from time to time we'll buy small amounts, if nothing else, just to make sure that share count's subtly going down, not going up. Not a big assumption. The projected initiatives, that's the $7 billion we talked about. M&A, that's the $4 billion of revenue we talked about. Remember the embedded earnings. Future revenue was four and a quarter. Current revenue was $2.75. The last section, current revenue, MCR recovery, that's essentially today's company moving back up to the MCRs we've targeted. That's 110 BPS of MCR recovery across the whole company, or as it says here, 40 BPS a year. You can see three distinct drivers. Current revenue, the current company recovering to 2.5% is a big driver of it, future revenue growth, and then of course, the operating discipline that you've come to expect from us. Bit of an eye chart, but I'll bet if I didn't put it up there, half of you would have asked me, so it's good that we have it. Last thing that's been on some of your minds is do we have the capital to drive this plan? The quick answer is yes. Upper left, where are we today? Net debt to cap, 48%. Revolver's undrawn at $1.25 billion. I put the RBC ratio up here just because a few of you have been asking me about this lately. We run an RBC 300 or more. State minimum is 200. Our policy is to run 50% higher than state minimum. We're at 311 today. We'll continue going forward to run at 300 or more. I think the reason I've gotten the question a couple of times is, gosh, will you maybe drop your RBC levels to fund your company? Well, no, our policy is 300, and we will continue to run it that way. We have ample cash and capital to drive our agenda. Sources and uses. To drive the plan, the outlook that we just talked through, we need $3 billion of additional capital. Most of it goes to organic growth. Remember the required capital on revenue. You've got to capitalize revenue. That growth's going to take, call it, one and a half. Some a range around that. M&A, we said we'd buy $4 billion of revenue. At the kind of multiples Molina pays, it's someplace in this 0.8-1.2 range. Share repurchases, that's the maintenance concept I talk about. Not a big number. Call it a half a billion. Roll it together, that's $3 billion of capital we need. Where does it come from? Most of it's internal. Internal capital generate $1.7 billion. We'll borrow the rest. Now, what do I mean by internally generated? That's net income. No, it's not net income. We love net income at our subsidiaries because that's what rolls up in consolidation and becomes EPS. Love it. That net income at the subsidiary isn't money I can use at the parent today. Subsidiaries generally require dividends to go through state approval, which means the net income is booked 1 period, you dividend it a subsequent period. This is the amount of capital I think I can move up to the parent through dividends. Our simplifying modeling assumption is we usually this year dividend last year's net income. 1.7 falls out of this model. We borrow 1.3. You're at $3 billion of sources. If you're borrowing 1.3, what happens across the years with your debt to cap? We'll hover in the mid-40s%, which is a very comfortable place for us to be. If you were looking for additional capital and you wanted to take debt to cap up to 50%, maybe temporarily, what would it give you? An extra $1 billion along the way if you needed it. We think we're adequately capitalized here. I'll remind you of how we think about capital deployment. Joe touched on ROEs in some of the earlier statements this morning. I call this the pecking order of capital allocation. Highest and best use is organic. The ROE on organic is 60%, even at these lower target margins. 2.5% target margin, ROE is 60%. Organic returns are phenomenal in this business. Accretive acquisitions, even at target margins of 2.5%, roughly 25% ROEs. Again, whatever's left, we'll return to shareholders. Love doing it. With 60 and 25% ROEs, our money's best put in the first two categories. We're in the home stretch now. I'll leave you with two slides. What should you take away from today's presentation, the big things, our messages today? What drives this story? Joe laid this out. Our markets are underfunded by 300 basis points. Most of our competitors are losing money on a pre-tax basis. Molina outperforms by 400. The data shows it. The outperformance is split between the MCR, and remember, these are direct MCRs that fall right out of the stat filings, and 200 basis points on the operating costs. We need 90 basis points across three years to hit our target margins. The market needs 300. We're in a good spot. Will the market get the full thing? I don't know. I like our odds on getting the 90. I'll remind you of the point I made earlier. If the market and Molina are only getting 90, the market is still losing money. Is that sustainable three years from now? Doesn't feel good, does it? Joe mentioned potential acuity shift from One Big Beautiful Bill. We've got Medicaid attrition of 2%-3% a year for the next three years. One, that's not a very big movement, two, the bolus of low acuity members is at the lowest we've seen it. Would there be an impact? If there is one, I think it's modest for two reasons. Point 4, our operating costs improve 50 BPS on the ratio. Just math, 50% growth, hold your fixed fixed. Number 5, $11 billion of new growth. We talked about RFPs, 33% win rate. We talked about M&A. Lastly, Medicare duals. Our $5 billion Medicare duals business today is running break even. Part of that is they just converted FIDE and HIDE to the new program. Second is we're growing into some new stars ratios. I feel very good about our outlook here. Historically, 2.5% would be lower than duals programs nationally have run, and definitely lower than Molina's duals programs have run. Feel really good about that. I'm gonna leave you with the same page that Joe opened with this morning. 15% revenue growth, 50% in total, half of it in the bank. MCR across the entire company, better by 100. Pre-tax margin, better by 150 BPS. That's the MCR and the G&A. Adjusted EPS ratio, 2.5% pre-tax margin, $25 a share. We've tried to lay things out in about as much detail as we can. Something tells me you're still gonna have a few questions. If that's the case, Joe, why don't I ask you to come up. Jim Woys, our Chief Operating Officer, Jim, come on up, and we'll take your questions. Got a lot of hands up. Great. John Stansel, JP Morgan. Just a quick one. A topic we talked about in 2024 that didn't really come up today was risk corridors in Medicaid. As we think about the 90 basis points of MCR improvement that's kind of embedded in the 2029 targets, is there something about re-establishing those risk corridors? I think you run in about 200 basis points below the risk corridors in Medicaid. How do we think about re-establishing those as it interplays with the amount that the states need or the other managed care companies need, and what flows through to your MCR? I'll frame it and kick it to Mark. The corridor regime has not changed. The corridors that have been in place during the pandemic are still in place. Now, if you recall, when the inflection started to happen in late 2024, we had 200 basis points of cushion. People said you didn't see the inflection. No, we saw it. We had 200 basis points of cushion in late 2024. We were basically without protection in 2025. Now, right now, with the MCRs where they are, we're not near the corridors. We actually are in a couple of places, but there's plenty of room. If the market gets what it needs to get back to actuarial soundness, we'll be into the corridors again in various places. I wanna be there. I wanna always be the chart that Mark showed, where we're operating better than the market, if we're paying into the corridors, it gives me entry year protection. It means I'm operating better than everybody in the market. Mark, anything to add? Yeah. That's exactly right, Joe. We used to be at an 89% on the MLR. We're at a 92% now. We're a long way from those attachment points. The thing about the averages, which is what you see here, is there's always one state that's a little better, one that's a little bit worse. Sure, are we in a corridor in one particular place? Maybe. As a company, we're nowhere near the corridor positions we were, and they're not a deterrent on this plan. Oh, we'll go over here next. Go ahead, Justin, we'll go over to A.J. Thanks. Good morning. Morning. Quickly on the MLR, or I should say the margin target of 2.5%, can you give us a little color in terms of, I think you're expecting about 100 basis points of improvement over the next three years. How do you think about the slope of that line given the work requirements out there? Do you still expect to be 200 basis points ahead of the industry in 2029 such that the industry is break even still in 2029? If that's the case, walk us through why you think that three years from now, the industry is going to be break even in Medicaid, how that's sustainable. We're not giving you the three-year trajectory yet. You notice that Mark left that sort of blank in 2027. In Medicaid, we need 30 basis points a year for three years. Is that going to come ratably? Nothing ever comes ratably in this business. Getting 90, meaning rates are ahead of trend by 90 basis points over the next three years when the market is at a 1.5% pre-tax loss, to me is a great place to be when we're starting at 1.5% pre-tax. We're not going to give you a 2027, 2028, and 2029, but we love our odds of getting 90 basis points of rate trend rebalancing over the next number of years, given the market needs 300. I'll just echo what I said before. If we're getting that 90, the market's still not getting what it needs. Justin, I think part of your question is, can we also maintain our advantage to the market of 200 on the MCR line? Every bit of evidence shows that we can. On the operating cost, we're actually gonna grow it. If I can just squeeze in one more on the on trend. You're talking about 5%, and I think that's logical. When the states look back in 2024 and 2025, and they build in that 5% trend, that's gonna help. What are they building in for forward trend? Are you starting to hear some willingness to build in, you know, something that's 2x history, right? You know, trend historically has been two to three. Are they willing to, you know, build in that 5% trend going forward? 'Cause that's what you're gonna need, right? To get your margins back. What are you hearing from them on that forward trend beyond the actualized? Thanks. Yeah. If they were really looking to make up the historical difference, they'd have to one time put in 300 basis points, then I think your question was, are they gonna put in the full trend on a go forward basis that they need to? They're gonna have to estimate what the current year is, they'll have to project what the next year is. Every bit of data what the actuaries are showing will support the numbers we're talking about. If part of the question is, if they just don't wanna go there, they drag their feet to go there, I think a really compelling data point is that so many folks are losing money, that if you don't honor both the historical catch-up and an appropriate go forward trend, you're gonna keep a lot of these folks underwater. Especially the local not-for-profits, they're doing even worse than the numbers we put up today. Rates need to come back either for actuarial standard or just for the practicality of solvency on many of these players. We're looking at. We'll go to A.J. in a second. One step at a time. They gotta catch up to the 21% cost increase over the last three years. When the 2025 seasons into that baseline, then I think there's less flexibility to jam the market on trend. 5% seems to be a great place to be. We've got two straight years of core trend being 5%. We're gonna argue hard, and nothing's happening on behavioral to soften that trend. Nothing's happening on high cost drugs to soften that trend. If we can get them to the 21% baseline increase and then convince them that five is the new normal, no longer three and a half, we're in good shape. A.J. Here you go, A.J. Rice. Hi, it's A.J. Rice from UBS. You know, you guys have been talking for a while about the 200 basis point differential on MCR you have versus the rest of the industry. I think one thing that would make it more helpful for us to understand how sustainable that really is when you drill down, where do you see that differential coming from? How come you think you'll be consistently 200 basis points better than everybody else? What gives us the advantage in actually being pretty clear and assertive on that point is one of the points I made earlier. How can anybody's MCR be better or worse than someone else's? All right, pull it apart. Rates. We're not rate makers, we're rate takers. We all have the same rate. Corridors. Well, we can be deep into it, and somebody else isn't, but we have the same corridors. If there are four players in the market with 25% market share, it's hard to get selected against. You all have the same membership. I got the same membership, the same level of acuity. I got the same corridors and the same rates. The only differentiating factor is how you're managing medical costs. The way we solve for it is by holding at par the three other criteria that can drive an MCR. The only one that can flex up and down by competitor is medical cost management. Everything else is at par. Is there, I know you're not gonna give up your secret sauce, but what is it about what you're doing with medical management that is a sustainable thing that others don't figure out and see and copy or whatever? Hard to say, but I'm going to kick it to Jim to talk about how we approach the clinical activities. Then Mark, you can talk about some of the payment integrity and other financial things we do. Jim? Yeah. I think Joe talked about it earlier. A multitude of sort of reasons, and the operating model and how we operate and the discipline in which we operate that operating model, I think has played a big part in what we do. We have very strong teams from a centralized point of view, from an enterprise perspective to how we manage clinical network behavioral health costs using what we call center of excellence categories at the enterprise who develop policies, procedures, and that deliver them to the markets for their execution. A great opportunity for us to continue to do well in that area. I think we have best in class payment integrity operations, best in class pharmacy management operations. But it really is the operating model and the discipline that we work. It even goes back to the point that Joe and Mark said that we operate off of one single platform, so very much consistency in what we do. Our operating metrics are as good as they ever have been. There's no Big claim lag that we worry about actuarial issues, claims are paid accurately and timely. All of our operational metrics are at or better than anybody else in the industry. I think that drives to a lot of operational performance that drives then to better execution that we do in the medical management arena. At the end of the day, it's discipline. Right. It's discipline that we have in the company that more than anything that I would put- Mark, medical econ? I would just echo what Jim said. Right. We're doing the same thing as everybody else does, but culturally we're a little bit different. We're big enough to be relevant in all the big company ways, but we run the place like a small company, and so much of what we do is personal to us. I think we just execute at a very different level. Joe mentioned medical economics. We've got just a fantastic medical economics team that continues to pull apart medical costs. We call it the cube. You can look at a cube, it's got six sides. There are six perspectives on med econ. Geography, condition, member, provider. Many different ways to look at medical econ. By constantly ripping it apart, you're constantly exposing different perspectives on it, which gives you insight on how to manage. At the end of the day, it's cultural. We just have an intense focus here. Okay. All right. Maybe just one follow-up. We're talking about the recovery, sort of as if the whole portfolio was one state, but it's 21 different states. Is there a lot of divergence, or are you sort of thinking everyone's gonna every state's gonna sort of come back and be in line? Are you way off in some states and closer in others, and you need those handful of really key states to improve? Every state is different, and we're not gonna peel down into individual states. I will tell you, your question's a good one, because if you had 2.5% margins and half your properties are at zero and the other half at five, that's a bad portfolio outcome. You don't want that. You want everything operating toward the mean. We talk about performance skews. Is everybody operating close to the mean? The answer is yes. Some properties are performing better than others, so not everybody is contributing equally to the recovery to 2.5. I would say on balance, all of our properties are performing very tight around the mean, and most of them are contributing to the outcome. There are no wild skews in the portfolio. To your prior question about medical costs, we have many isms in the company. As one, pay attention to a dime before it becomes a dollar. Pay attention to 10 basis points before it comes 100, 'cause we know in this business that's what happens. Lance has a question over here. Lance will go next, and then we'll go to Kevin. Hi, Andrew Mok from Barclays. I understand you framed some of your G&A leverage against 2026 guidance, but relative to your previous targets, I think Medicaid G&A is down about 150 basis points, which is a pretty significant reduction. Can you remind us, one, how much of your Medicaid cost structure is fixed versus variable, and how you're able to achieve that much operating leverage over the next three years? You wanna talk about fixed and variable and how we manage? Yeah, absolutely. I'm not gonna parse our products, our segments, our states on a fixed versus variable. What's important is the whole company. If we were to go into the segments, it's not much different by segment. Again, it's 50-50, we've demonstrated that. I made some very simple and high-level comments about splitting $2.8 billion of G&A today into two components. That's a very simplistic way to think about it, our practical and sophisticated models sort of get to the same conclusion. The fixed components are a lot of leverage and corporate functions that we keep constant. Variable, so much of that on membership, on utilization management, on medical cost management, enrollment. There are a lot of things that move with revenue and membership. Step back, look at the whole company. The cost base is pretty evenly split 50/50. Great. Maybe just to follow up, the Florida KidCare contract, I think, is a meaningful portion of the embedded earnings figure. Can you help us understand the assumptions embedded into the outlook for that piece of business specifically, including the timeline to break even and target margins? As you saw in our analysis, there's a 2026 drag. You're hiring people before the revenue shows up. You always project a new contract to start out running high on the MCR. New people getting used to new technology, so on and so forth. We believe we get that to break even in full year 1. Then we hit target margins sometime in full year 2. That's a significant contributor to the fixed cost leverage. Everything we do in embedded earnings is on a fully allocated basis. When you bring $6 billion of revenue in in one year, and you have the discipline of holding fixed costs fixed, we're gonna get the operating leverage off that. We're pretty excited about it, one of the reasons we're actually even more confident of that today than we maybe were two months ago is we've seen the numbers. We've got the claimant cost data, and we have the rates, and the program is on pretty sound footing. We're inheriting a program on very sound footing. Anything to add, Mark? No, I think that's well said. In the embedded earnings, just to be clear, there's a $1.50 of current losses with the contract and $2 of forward profitability at 2.5% pre-tax margin. A $3.50 swing, you get that $1.50 next year, and as Joe mentioned, it'll take us a year or two to get to target margin. We'll go to Kevin, and then we'll go to Lance next. Kevin. Yeah, great. You guys talk a lot about embedded earnings. Just going back to that previous guide last Investor Day, you guys had a margin that was basically almost twice what you're talking about now. Particularly if you think about 50 basis points more G&A leverage today than what you were talking about back then. Like, should we be thinking about that number being off the table? Is that number still an aspirational number we should be thinking about, where 25 relative to $50 of earnings power? Or is it in a new world, you know, we should be thinking about something in between what you're doing and that prior number? We gave you a three-year outlook. As you said, any investment thesis in our view ought to have a three-year outlook to it. We got models. We have higher growth models and lower margin recovery and vice versa. It all seemed to triangulate toward a three-year outlook around $25. We presented what we think is the most realistic case of margin recovery. The reason we showed you the sensitivity is tell me what happens to trend if rates are gonna catch up to the baseline, the 21% increase. If trend softens, they catch up faster and to a greater degree. If trend accelerates, maybe they catch up slower. We think we've presented a very rational, data-supported, and conservative case of what we can accomplish by 2029. Is there a reason to believe that managed Medicaid comes back to its former glory of where we were, 4.5% pre-tax margins? It could. In giving you our best outlook for 2029, we settled in on a 2.5% number and $25 a share. Is there upside to that? Tell me where how fast rates will recover, and the answer is yes. Yeah, I think that that is one of the concerns people have when they think about 2028, 2029. That's when a lot of the Medicaid rate cuts start to kick in from OBBBA. Yeah It sounds like you're kind of assuming that the rates are still at the lower end of what's maybe actuarially sound by then. If that were to happen, you said a few times like, "Oh, I don't know how that will play out." Like, do you guys have to exit some states to prove to the states that they have to pay correctly? Is it you're gonna wait for the competitors to do that, and that's gonna cause the states to do that? If rates are at the low end of actuarial sound and a lot of people are losing money, does that mean they're gonna go out of business and you're gonna get more share? Like, should we think about that as maybe the margins don't get back, but now you've got more revenue upside? How does that play out? How do you get the states to get you to actuarial soundness, even if they're seeing some budget pressure? We laid out what we thought the reasons were. Number one, just to be clear, no, there are no states. First of all, if there was, I wouldn't be announcing it at our Investor Day that we're going to exit. No, there are states that have stronger rates than others, states where we have stronger advocacy efforts to get back to actuarial soundness. No, every state in the portfolio right now, we have a forward outlook on where we need to be. As others exit states, there's more market share for us, and we do think that rates come back to actuarial soundness. I don't know how to answer your question any more directly than that. The market is significantly underfunded, nonprofits and for-profits. Rates are based on the market average. Where if we're operating, if we continue to operate 200 basis points on the MCR better than the market, and the market gets the rates it needs just to get back to break even, the 90 basis points is in the bank. That's what makes us feel good about this. Actuarial soundness is a concept. CMS does have oversight responsibility on rates. The programs have to be adequately funded. Mark, anything to add? You're right in the middle of all this with me. The principle of actuarial soundness is harder to implement in a period of inflection, and that's what we just saw. When things normalize, the concept of actuarial appropriate rates does come back. We believe we're through the period of inflection, so I have high hopes that actuarial soundness prevails once again, even if that's slightly delayed for whatever reason. As I pointed out before, the practical reality of so many players losing money is a real concern to states at the moment. To me, I take comfort in those two items. Yeah. Lance. Thanks. Yeah, wanted to dig into medical management a little more. Could you just talk a little bit about, you know, the lower trend environment that existed historically, maybe what the impact that you were creating into trend from medical management initiatives, UM, et cetera, i.e. gross trend was five, but you were achieving three. Now that we've hit a much higher trend level, you know, is it a larger amount of trend impact that you're achieving or that you project you can achieve through medical management? Are there particular areas where you see that happening? I'll kick it to my colleagues here. Let me frame the answer. We're not gonna start giving numbers on what our cost management initiatives aggregate to, but every single year, they are a significant component of our operating plan. Okay, this is inflecting what are the five or six things we're gonna do at the provider level, the member level, to arrest the rate of growth of this particular trend. It's meaningful. What's happened here, people said, "Well, how do you know your cost management techniques are still operating?" Well, ER diversion, unnecessary ER visits, how do you know you're diverting the right number? The percentage that we're diverting and avoiding is the same percentage as it always was, except the ER visits are up. If N is up, but your percentage of diversion is the same, then you know you're operating effectively. We're not gonna start giving numbers, but every single year, the point you're making, there's gross trend, what the unmanaged market would produce, and then there's net trend, what do we think we can get it to? It's a meaningful number. Anything to add, guys? Yeah. I would just say that the process that we go through around medical management, around initiatives around medical management is a dynamic process. It's not a one time during the year we define all the projects. It is a constant sort of process to look at the data that's presented to us by medical economics, strong analytical presence. We target sort of where those variances are, and we create initiatives to go after them. It's a very dynamic process, not only just on medical management, but what we do around unit cost management as well, as we see where we need to take better unit cost approaches and use that data to go renegotiate our contracts going forward. It may mean that we have to do more intensive payment integrity initiatives around where we see a cost variance that might occur. It might be in even some place like fraud, waste, and abuse. All those activities combined sort of puts us in that process around how do we get a better medical management outcome, in line with where our forecast is. But it's a dynamic process. Every single day, we're working initiatives. Gotcha. As you've had concentration in some of the areas that have been driving aggregate trend, have you seen an increase or have you been driving an increase in value-based care, especially value-based care initiatives? How do you see value-based care playing out for kinda your approaches? You want to comment on that, Mark? Yeah, absolutely. I think it's well known that value-based care in the Medicaid area is probably least penetrated of anywhere, right? Medicare enjoys the best penetration just because of the dollars and the continuity of the members. In Medicaid, not only do we see business upside to it, but many of our states are looking for us from a compliance perspective to drive more VBC as well, value-based care. We're certainly on that. We're more than meeting our compliance objectives, and in many cases, we're exceeding our own expectations. Again, you don't hear a lot about it in Medicaid just because among all products, it's probably the least penetrated of all forms of health insurance. We're moving it up the scale. I mean, bonus payments are pretty common, then of course, gain share. Everybody loves gain share. You try to get to the symmetrical gain and loss share. You know, it gets a little more, the debate is a little more intense with a provider. Getting it to full capitation, obviously in California, is a whole separate animal. Getting this to symmetrical gain and loss share in Medicaid is the journey we're taking. Anyone? Thanks. Jason Cassorla at Guggenheim. Maybe shifting gears a little bit on the dual side. Curious, going from 6% share to 10 to 16% over time, maybe can you help a bit more in terms of the building blocks there? I guess what's different today for you to go after that versus where you're at at 6% currently? Thanks. We're excited about it. The market itself is growing at 12%-14%, exclusively aligned enrollment. It highly incentivizes states, encourages them, over a period of time, 2027 up to 2030, to combine a dual member in a Medicare and Medicaid product that's connected at the same parent company, MCO. We're well-positioned. With Medicaid contracts in 20 states, and having SMACs, you know, the contract that you need to do this business, we're well-positioned. We are running 80,000 members in the MMPs. We're already running integrated products. The reason we ran the table on the RFPs is we're experts at doing this. The difference is now it's highly competitive with the rest of the market, right? We know the big guys are gonna be in there, we're highly confident. As Mark said, 2.5% pre-tax margin seems pretty meager. Our star ratings are improving, our risk adjustment processes are market average, and we're well-positioned with that Medicaid footprint to take advantage of the growth in that market. We only put in a 1% market share increase into the model. That's it. We didn't need any more to justify $64 billion in revenue. There's probably some revenue upside there. Mark, Jim, anything to add? Jim, you're close to it. Yeah. I would only add that I think when we think about running the table on the MMP contract, we realized early on that these were state programs not run by CMS, right? We focused on our customer in the state who was doing the procurement. Even though Medicare was probably the largest piece of the activity, it became a state program, recognizing that the decisions are made locally by the in the state and us attributing our business to that, I think has really created a different operating model for us than some of our competitors. Maybe if I could follow up on the $80 billion or so revenue opportunity through the new RFPs in 2028 and 2029. I guess with all the changes in Medicaid over the past few years, the active policy environment, do you anticipate any material changes to the way these RFPs could develop, whether it's upside or downside risks to the revenue opportunity within these RFPs, ways to win on the margin side or anything along those lines, as it relates to the RFPs that are coming down the line? Any changes or anything you're looking out for? No, there's a couple of imminent ones. Missouri and Indiana will come out really soon. We're going after new RFP. We're in that state two years in advance of the RFP. You have to be. You're developing relationships, provider relationships, regulatory relationships, et cetera. We have good visibility into how the RFP will unfold. Every once in a while, we're surprised by something, but for the most of the time when the RFPs come out, there are no surprises. They're pretty traditional. They are pretty traditional. You. There's a hundreds, if not thousands of questions and capabilities you have to showcase. I would say that there's subtle changes in the RFP processes, but for the most part, it's the traditional process. Submit your bid, go into orals, down select, and we move on. Nothing's really changed in that process. Yes, sir. Hey, thanks. Stephen Baxter from Wells Fargo. I just wanted to come back to AI, and you guys think about the durable, you know, 200 basis points of outperformance you've generated versus your Medicaid peers. I guess, how do you think about the durability of that? I would think if anything, like AI might enable some of the other larger for-profit companies to potentially try to study what you do and maybe catch up in some of the areas that are deficient. Maybe the not-for-profits never get there, but how do you think about kind of future-proofing that margin premium that you're generating versus peers? That wheel of progression we showed you is exactly the way we think about it. There are 10 core processes that in a combined way go to the management of managed care. How can you make those more efficient? That's job one. We think there's, you know, 50, 100, maybe even more, 150 basis points of improvement we can generate just on making the existing managed care processes more efficient. Second, can you reimagine that entire process? You know, take whatever process it is, payment integrity, UM, whatever it is, and reimagine it. That's phase 2. We're not even contemplating that. Third, is there a complete reimagination of the way managed care does, is done? Who knows. Right now, the number we put on the page is only taking existing managed care processes and making them more efficient, and we think that's a one to 2.5 year journey. We already do things without talking about them a lot sometimes. We already have use cases that are being used. We have 1 operation of the company, I won't mention where it is, but the volume in that operation has doubled over the last 3 years and headcount's down by 20%. It was early adoption of AI. We're taking that model that we used in this particular operation and replicating it across the wheel of managed care. We're confident it's there. Why didn't we model it? I wouldn't say speculative, but it's at least in nascent form. As we move forward here and have more investor days and more communications with you, it'll end up in the numbers. Just thinking about the, you know, it's obviously helpful to hear about the actuarial processes, and I think on the medical side, we're starting to maybe understand those better. As I think about the admin side and how states approach kind of the admin component of setting rates and operating costs. Like, obviously some of the scenarios you've pointed to that by the end of the decade, you know, Medicaid enrollment's gonna be lower than where it started, but rates might be 40% or 50% higher. Like, how do you think states are gonna incorporate lower admin loads going forward, and have you kind of factored that into your long-term outlook? Mark, you wanna take that? Yeah, absolutely. Most states do everything around the MLR line. Some states have begun thinking about the admin side. Honestly, it's not something that we're seeing very much of. Even the few instances we see it, for Molina with a best-in-class structure, it's not necessarily prohibitive. I think when you see something like that, it's really aimed at the very extreme players that have the least attractive G&A ratios. It hasn't been a limiter for us. Not seeing much penetration, and where you do, it's not a limiter. Hey, thanks. George Hill from Deutsche Bank. I've got a quick one for Joe and a quick one for Mark. Joe, do you have a top-down kind of perspective on what state Medicaid spend looks like from now through 2029? Is that number up or is that number down? I'd love to know how you think about the interplay between the decline in membership and the growth in rate from a state's perspective, 'cause they tend to be solving for a budget line item. Mark, if you could just rank order or unpack the 150 basis points in MLR improvement as we look out over the next two years. How much of it is rate ahead of trend? How much of it is medical management? How much of it is benefit cuts at the state level? Would love to hear kind of the building blocks as we think about the expansion there. We do. We have a very intense effort internally. You know, healthcare is all local, and there's no national trend really, it's state by state. We track very carefully. You know, is the state in surplus or deficit? Do they still have rainy day funds from all the COVID stimulus money that went out? How would they think they're going to handle what we call the indirect impacts? The OBBBA has direct impacts, right? Work requirements, semiannual redeterminations. How about all the indirect impacts in terms of provider taxes and MCO taxes? We're tracking that. We have a very, very capable, if not intense, government affairs engine that stays wired into how states are thinking about managing their spend. Every day you'll see a report come out from, you know, one of the, one of the industry publications that talks about some state, you know, taking $200 million out of their program for this or putting $200 million in for that. We track all that. Right now, I would say the big watch-out or unknown would be how are they going to react to when the FMAP match on the indirect taxes begins to hit their budget? What will they do? Will it follow political lines, red versus blue, in terms of membership and benefits? There still are incidental benefits, value-added benefits that could be cut if they wanted to. We're tracking it state by state. Those types of issues were fully contemplated in our revenue outlook. You know, as states make their decisions, we'll be reporting what happens to our revenue base accordingly. Mark, you wanna take the second question? I think the question was how do I think about the MLR recovery? Yeah. We're not gonna get into the specific components, 'cause that would essentially be laying out trend and rate for the next three years, which I don't have a crystal ball to do. Here's the better way I would think about it though. If the industry is underfunded by 300 basis points, it has to get back at some point. Maybe a different version of the question is, how long does it take? Joe alluded to this. If trend settles down and normalizes, rates can catch up a lot quicker. If trend bounces around and stays higher, it'll be harder for rates to catch up. If trend goes down, my gosh, rates probably catch up even quicker. On the 300 basis points, I don't have the crystal ball to say how quickly does that come back, but what gives me great comfort is I'm only looking for 90 of it. More to the point, we're not assuming anything in the 90 on our ability to manage medical costs better than we do today. That's just market exposure. Thank you. Michael Ha from Baird. With the incoming D-SNP integration rule, are you seeing any fiercer competition for, you know, acquiring these lower performing Medicaid assets from MA plans that are under indexed to Medicaid heading into, right, next year and that ramping up into 2029? I wanna make sure I understood you. The question was on, can you hear me, on M&A? Yeah, M&A, the incoming D-SNP integration rule, Medicaid, Medicare Advantage. Are you seeing fiercer competition in M&A for Medicaid assets across the country? No, I wouldn't say we're seeing any increased competition on Medicaid properties at all. They're still out there. Most of the ones that have come to market are what I'll call underperforming. I would even say maybe distressed. Distressed is a little worse than underperforming. The question is, when we look at an M&A opportunity, whether it's because they can't compete in D-SNP or not, or they're just running out of capital, what we look at is perpetuity of revenue stream. Give me a long-dated revenue stream, and these guys are gonna manage it to target margins. Absolutely convinced of it. Now, whether those target margins are 2.5%, 3.5%, or 4.5% remains to be seen. Right now our target is 2.5%. Look for long-dated revenue streams that the re-procurement is out there, the membership is stable, and if it's distressed but not broken, then we trust our operators to open up the Molina playbook and get it to target margins. No, I wouldn't say that the opportunities are getting any more competitive than they were. Menkowski, who's here somewhere, is, has done, with his team, a brilliant job of creating proprietary opportunities that don't come to market. We just have a great story to tell about being part of the Molina family of companies, particularly not-for-profits. They like the story. They're running out of capital. I need a capital base. I need a big brother. I need a brand. We really like our local presence. Let me become part of the Molina family. Four out of our nine deals were not-for-profit, maybe more. They like the story. No, we're not seeing that much more increased competition that makes us less confident in the $4 billion of revenue we projected. Great. Thank you. One more. On the incoming Medicaid interim final rule by June 1st, what key details are you looking for that you would consider, like, your base case, like a good scenario? Are there key definitions around medical frailty that you're looking for? It's a great question because it's unanswered at this point in time. I'll kick it to these guys because the three of us have been totally immersed in this. In fact, we have a slight advantage over many in the market. Right because we're in Nebraska, and they're They go May 1st or June 1st? May 1st. I can't remember. May I can't remember. May 1st. They already went. We're using that as kind of our laboratory. Medical frailty, undefined. Are they using a Social Security definition or come up with their own? Who knows? What types of information do you actually have to submit to prove the work requirement or, you know, the 80-hour requirement? Don't know. How aggressive are they gonna be on ex parte? How aggressive are they gonna be on procedural? None of that is known. Nebraska's taken its own position on this and doing what they think is right, and we're following along. We have our tentacles, as you can imagine, in every single state. We're certainly following the final rule. The three issues you mentioned are the big ones. What's medical frailty, and what types of information do I need to support someone being eligible or ineligible? It's pretty clear what managed care can and can't do. For the most part, we can't participate in the process. We can educate and inform and provide clinical information that proves frailty, but we can't actually participate in the process. That's a general statement. It's pretty true across the states. Yes, sir. Thanks. Ryan Langston from TD Cowen. On the initiative's growth, you're assuming 33% wins, track record 80%. It sounds like you have some visibility maybe near term and some opportunities. Why assume only 33%? I think to get to that 80 is another $8 billion of opportunity, be pretty substantial. The truth is we like the 15% CAGR at $64 billion. When you look at $90 billion of opportunity and 20% market share, it's a little too sporty. Look, you know, 80% win rate, that's hard to reproduce. I'm telling you, I can go and call that slide up and go state by state, and Mark and myself and Jim are neck deep in the business development process with our business development team and our operators. We're very close to what goes on there. I like our chances of beat. Trying to be conservative, put a realistic view out there, something that is eminently achievable. We kind of just reduced the win rate, $6 billion of revenue or whatever it came to, seemed to be enough, and it supports a 15% growth rate. As I said, 33%, we're not gonna be happy with that. We have to make sure that people don't take that as an internal target. Without a doubt. 50% growth rate, 15% CAGR, I think we made our point. We're a growth business. To Joe's point, sure, I said more, but I don't know that we need to put more on the table here. Just on M&A, is that likely more couple of smaller transactions, or are there assets available that you could hit that, you know, maybe one or two transactions? Thanks. Yeah. If you look over time, we've done a little bit of both. We've done some large ones. We did one as large as $3 billion of revenue, and we've done some in the half billion of revenue. We've got a pipeline. At any given time, we're in advanced discussions with a couple of targets. Over the last six months, we've been in deep discussions with two very large ones. Another large one just came up, and there's always a couple of small ones out there closer to the half billion dollar size. Not gonna comment more than that. They range the gamut. All right. It looks like we are done. Yes, Jeff, we're done? Nope, you're good. We're good to go? Thank you for attending our 2026 Investor conference. Thank you for your interest in our company. We aim to deliver. This is an interesting environment right now. You know, we're not happy with our recent performance. We're proud of our eight-year track record. The industry went into a downturn. The rate trend and balance, I assure you that the apparatus, the engine, the machinery we built to create durable and sustainable, profitable growth is intact. When that fuel line becomes unclogged, rates will get back to the normal trajectory you expect from us, and we're gonna deliver these numbers. Thanks for attending today. Take care. Have a great weekend.