2025 EPS Target and Subsidies
Q: Any updates on the $2.25 EPS target given subsidy assumptions?
A: Management reaffirmed the $2.25 EPS target for 2025, assuming the current subsidies sunset as planned. They believe both political parties have incentives to maintain or favorably adjust the subsidies, which could further improve their outlook. If subsidies are extended or adjusted positively, they would revisit the $2.25 target.

2025 Growth Expectations
Q: Do you still expect 15% growth next year despite peers' lower estimates?
A: Oscar Health continues to expect double-digit market growth, estimating around 15% for open enrollment in 2025. They acknowledge that CMS's program integrity efforts might exert downward pressure, but believe that Medicaid redeterminations and enhanced subsidies will drive growth. New market entries adding 700,000 to their total addressable market support their growth assumptions.

Competitive Positioning and Pricing
Q: How is your competitive positioning for 2025 versus a few months ago?
A: Management stated their average rate increase is about 6% compared to the market's 7%, indicating a rational and stable pricing environment. They believe the market is stable and that their pricing positions them well competitively.

MLR Expectations for Next Year
Q: What is the MLR jumping-off point for next year, considering this year's factors?
A: This year's MLR was impacted by SEP pressure, COVID effects, and favorable prior period development. Adjusting for these, the run-rate MLR is in the low 83% range. Management expects to optimize MLR further next year, with opportunities for improvement.

SG&A Cost Targets
Q: Can you update us on SG&A targets, given recent leverage improvements?
A: Improvement in the SG&A ratio is driven roughly half by fixed cost leverage and half by variable cost efficiencies. Management sees significant opportunities to gain fixed cost leverage and drive down variable costs, aiming to outperform the 16% SG&A target by 2027. They acknowledge that the low to mid-teens is a reasonable estimate for a mature SG&A profile.

New Product Development: HMO and ICRA
Q: Updates on the guided care HMO product and ICRA membership estimates?
A: The new HMO product focuses on creating frictionless care through digital technology, aiming for a better experience than traditional HMOs. It's launching in a couple of markets and is intended to help re-enter California. For ICRA, they have 3,700 members so far, with open enrollment ongoing. While ICRA isn't critical for hitting growth numbers, it could drive growth higher.

Risk Adjustment Practices
Q: How has your risk adjustment practice evolved over the last two years?
A: Oscar Health maintains strong, consistent modeling practices for risk adjustment, which remains their most complicated estimate. They utilize weekly information to gauge their relative market position and have had stable estimates. Despite inherent volatility, their consistent methodology has served them well.

SEP Pressure and Impact on Margins
Q: How is SEP enrollment affecting your financials?
A: Increased SEP additions have led to higher top-line revenue but also apply pressure on margins. SEP members' performance is on track, with utilization slightly favorable. Growth is slowing and expected to decelerate into the fourth quarter.