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CFO Scott Blackley attributed the 260 basis point SG&A ratio improvement to technology-driven efficiencies and disciplined expense management, breaking it down into fixed cost leverage (~40%), variable cost improvements (~15%), and lower fees/geography. He described a significant portion as durable. CEO Mark Bertolini declined to quantify fraudulent enrollment but affirmed that Oscar is not changing its long-term targets and is preparing for potential 2026 pricing impacts from regulatory changes.

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The company expects behavioral volumes to accelerate but declined to provide specific quarterly guidance, noting that labor remains a persistent but improving headwind. Regarding DPP proposals, they see a two-track process: an administrative one for existing submissions (which seems to be restarting) and a separate, uncertain legislative track that could impact future programs.

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Steve Filton stated that cost management and productivity efforts have resumed post-pandemic, contributing to margin recovery, and the company is now more flexible in adjusting to volume changes. Regarding supplemental payments, he noted New Mexico is not significant for UHS. For California, while the potential is large, the benefit cannot be sized until the state creates a formal allocation plan, which is not expected until next year.

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CEO Sarah London addressed fraud concerns by highlighting program integrity measures started over a year ago, like the agent of record lock, and noted that observed utilization from new members is a good sign against 'ghost members'. She reiterated the full-year Marketplace margin target of 5% to 7.5%. EVP and CFO Andrew Asher explained the revenue math, noting the $10.1B Q1 premium and full-year guidance of $39B already account for attrition.

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CEO Sarah London and CFO Andrew Asher both emphasized that the company is being prudent by carrying its original assumptions about the impact of these programs into Q1 and Q2 to avoid surprises. They noted the impact has been more muted than anticipated so far, and they are starting the year from a position of strength, but want to see how the next few months play out before changing their outlook.

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CEO Sarah London reiterated that Centene expects to grow in the Marketplace but the primary focus for 2025 is on achieving target margins. CFO Andrew Asher repeated that Q3 was the Medicaid HBR peak, with Q4 benefiting from new rates. He stressed the focus is on matching rates to the new, higher PMPM expense base post-redeterminations.

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Mark Kaye, CFO, expressed comfort with the mix of Medicare Advantage membership attracted this year, emphasizing the balance of benefit design against risk management. He stated that the company has not observed a substantial variation from its plan regarding Part D utilization. He also noted that any hypothetical higher utilization would be balanced by risk corridors, rebates, and other contractual offsets.

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CEO Gail Boudreaux countered this view by emphasizing their disciplined and targeted growth strategy, focusing on specific markets, geographies, and products. She highlighted strong retention in the individual MA book and significant, strategic growth in the group MA business with a long-standing client as evidence of a sound strategy. She expressed confidence in the product mix and the company's positioning for sustainable, long-term growth.

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CFO Mark Kaye clarified that Medicaid trend is not expected to accelerate in Q4; the implied pressure is primarily due to normal seasonality. Felicia Norwood, President of Government Health Benefits, confirmed they have 55% visibility on January premium rates, but these are drafts and the process remains iterative, allowing for ongoing data sharing and adjustments with state partners.

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CEO Steven Sell described the model as a constructive and flexible approach that payors were receptive to in the current environment. He clarified it's the first year they've used this structure and its future application will be situational, depending on market dynamics. The ultimate goal is to transition these partners to full-risk, potentially as soon as their second year.

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CEO Parth Mehrotra noted that the ACPT impact is primarily on newer ACOs, and Privia's diversified book of mostly mature ACOs is less affected. He stated that all known trends are factored into the guidance and the company's focus remains on outperforming the benchmark, whatever it may be, through strong clinical performance. The company's consistent methodology has absorbed such factors in the past.

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CFO Susan Diamond confirmed the 80 bps headwind for 2025, noting it was already factored into their membership expectations. CEO Jim Rechtin addressed the Stars question by stating that visibility into performance is limited at this stage, and while the team is making progress, there is still risk. He concluded it was too early to give a definitive answer on the outcome.

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President and CEO Joe Zubretsky expressed bullishness on the D-SNP business, highlighting its profitability, recent contract wins, and the strategic advantage Molina has under the new CMS integration rule. Regarding PYD, CFO Mark Keim stated that he does not expect a headwind next year. He explained that as the business grows, PYD naturally grows, and it is a continuous part of the business driven by improving payment integrity and fraud, waste, and abuse initiatives.

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