Good afternoon, everyone, and welcome to the eHealth, Inc. conference call to discuss the company's Third Quarter 2022 Financial Results. At this time, all participants have been placed in listen mode. The floor will be open to your questions following the presentation. It is my pleasure to turn the floor over to Eli Newbrun-Mintz, Senior Investor Relations Manager. Please go ahead.

Good afternoon. And thank you all for joining eHealth, Inc's third quarter 2022 financial results. Joining me today are Fran Soistman, Chief Executive Officer, and Christine Janofsky, Chief Financial Officer. After management's prepared remarks, we will open the line for questions. As a reminder, today's conference call is being recorded and webcast from the Investor Relations section of our website. A replay of the call will be available on our website following the call. We will be making forward-looking statements on this call that include statements regarding future events, beliefs, and expectations, including statements relating to our expectations regarding the Medicare market and individual and family plan market, including current market and enrollment trends, consumer demand, our competitive advantage and market opportunities, our investments in enrollment quality initiatives, our omnichannel capabilities and call center operations, and expected impact of these investments on customer conversion, customer retention, and other quality metrics, our expectations regarding our marketing and member acquisition strategies and sales channels, our expectations regarding our business strategy, operating plan, and financial performance, including the profitability of our business, cost savings, cash flows, conversion rates, customer retention, lifetime values, acquisition costs, member estimates, and fixed and operating expenses and our full year 2022 financial guidance. Forward-looking statements on this call represent eHealth's views as of today. You should not rely on these statements as representing our views in the future. We undertake no obligation or duty to update information contained in these forward-looking statements, whether as a result of new information, future events, or otherwise. Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected in our forward-looking statements. We describe these and other risks and uncertainties in our earnings release, Annual Report on Form 10-K, and Quarterly Reports on Form 10-Q filed with the SEC, which you may access through the SEC website or from the Investor Relations section of our website. We will also be presenting certain non-GAAP financial measures on this call. For a reconciliation of each non-GAAP financial measure to the most directly comparable GAAP financial measure, please refer to the information included in our press release and in our SEC filings, which you may access from the Investor Relations section of our website. I will now turn the call over to Fran Soistman.

Thanks, Eli. Good afternoon, and thank you to everyone joining us for our third quarter '22 earnings call. Today, I will review our third quarter results and provide an update on our execution as we prepare for the important enrollment season, which started on October 15 in the Medicare market and November 1 in the individual and family plan market. I began my tenure at eHealth just about one year ago this month. Since then, we've assembled a new leadership team and developed a comprehensive long-range strategic plan for returning the company to sustainable profitable growth while delivering a differentiated value proposition to carrier partners and customers. Significant operational changes were implemented across all critical areas of the organization this year as we started to execute against the plan with additional initiatives roadmap for 2023 and beyond. Our initial achievements will be tested and leveraged for success during this important time when millions of customers shop for individual and Medicare plans. During this enrollment period, our company will assist tens of thousands of Americans to shop and enroll in plans that represent an optimal match for their personal preferences, health needs, and budgets. Our sales agents and product teams have performed the critical work of assisting customers and navigating a complex landscape of health plan options, guiding beneficiaries through plan features and key selection criteria, as well as providing the enrollment methods that are most convenient for the beneficiary or their caregivers. This important service provided in a multi-carrier choice environment meets beneficiaries when, where, and how they want to be served. We give consumers the ability to shop and enroll through a host of different methods, including telephonically, online using their personal computers, laptops, tablets, or mobile devices, through live chat, or fully unassisted using our digital tools. Our omnichannel shop, educate, buy, and enroll capabilities are also critically important for our carrier partners who depend on health insurance advisers like eHealth to generate quality enrollments at scale. eHealth, in particular, provides carriers with access to beneficiaries who value comparison shopping and are more technologically savvy. We continue to place the utmost emphasis on our relationships with carrier partners as we work together to provide customers with exceptional and memorable experiences with the intention of establishing lifelong relationships. eHealth's relationships with our carrier partners have been strengthened throughout the last year and I believe our partnerships have never been healthier. During the quarter, eHealth continued to execute against the six-point operating plan that we've outlined on our prior earnings calls and which can be found on slide 11 of our earnings presentation. Improving our cost structure is an important element of the plan and we are now on track to deliver more than $90 million in year-over-year cost savings in 2022. These savings are coming from variable cost reductions with the largest impact expected in Q4 as well as rationalizing our fixed cost base. In addition to improving our profitability and cash flow profile this year, the cost reduction program underway will also allow us to enter 2023 on a much stronger foundation. As you recall, the cost transformation execution began in April. The full annualized impact will be realized in 2023, supplemented by additional cost eliminations and reductions that we expect to execute on in the early part of the new year. While enhancing cash flow and profitability is an important part of the operating plan, our transformation is clearly not limited to cost eliminations and cost reductions. In the past year, we have made significant changes to our leadership team, most recently announcing the appointment of our new Chief Marketing Officer, Michelle Barbeau, and our Chief People Officer, Jana Brown. Internally, we promoted Bill Billings to Senior Vice President of Engineering and Information Security. The entire leadership team is aligned around our operating plan and broader strategic goals and is fully dedicated to the success of this company and our mission of connecting customers with quality, affordable health insurance coverage. The work on reconstituting the leadership team is near completion and I believe we are assembling a truly special group of executives that have the experience, passion, and determination to lead eHealth towards our important mission of helping Americans find affordable health insurance coverage while exceeding our Board and shareholders' expectations. Last month, eHealth's leadership team signed a pledge outlining our commitment to Medicare beneficiaries and caregivers and the experience they can expect when they work with eHealth. It is comprised of six statements covering everything from our offering of a wide range of high-quality plans to making customer satisfaction the top criteria behind our planned recommendations to providing expert guidance in a friendly, easy-to-use shopping and enrollment process, as well as always acting with the highest degree of ethics and integrity. As we get another example of the new eHealth, an organization that strives to provide customers with exceptional and memorable experiences as they shop for health insurance plans. The pledge was shared with our carrier partners, CMS and is proudly displayed on all of our websites. Operationally, one of the most important third quarter achievements has been a year-over-year increase in conversion rate from Medicare sales and enrollment calls. This is a critical metric that determines the effectiveness of our Medicare telesales organization and impacts not only the enrollment volumes but also the per enrollment acquisition cost, one of the key drivers of member profitability. This year-over-year step-up in conversion rates has continued through the first weeks of the AEP, where improvements to conversion are even more consequential given the significantly larger number of incoming calls compared to the rest of the year. We are seeing this year-over-year productivity improvement for our tenured agent as well as the agents newly hired for this AEP. As a reminder, the introduction of our enrollment quality initiatives about a year ago, which included call verifications, resulted in a significant reduction of our telephonic conversion rates and impacted our financial performance. While over the past 12 months, we have had to sacrifice enrollment volume as a result of these quality initiatives, it was the right decision. It allowed us to achieve significantly better CTM scores and improved our standing with major carriers, some of which now refer to eHealth as the gold standard in enrollment quality. We are excited to see a year-over-year increase in conversions in Q3 that was accomplished while maintaining enhanced enrollment quality standards. Q3 revenue of $53.4 million decreased 16% year-over-year, reflecting a 37% reduction in Medicare variable acquisition costs compared to last year, which contributed to reduced lead volume, partially offset by enhanced marketing effectiveness and improved conversion rates. Adjusted EBITDA loss was $33.1 million compared to a loss of $55.2 million in Q3 of 2021. Both revenue and adjusted EBITDA were in line with our internal plan. Third quarter marketing and agent cost per acquired Medicare member improved year-over-year, and we expect this trend to continue and be even more pronounced in the AEP, driving meaningful expansion in LTV to CAC spread. Based on Q3 results and initial AEP observations, we are reaffirming the full year 2022 guidance ranges we provided on last quarter's call. In preparation for the AEP, we made changes to sales and marketing strategies and implemented new processing, based on learnings from prior enrollment periods. At the top of the funnel, we focused our marketing budgets on channel and customer segments that drive higher ROI enrollments and on specific days and times associated with stronger consumer response based on our data analytics. We are prepared to be opportunistic with portions of our budget that can be shifted on shorter notice, leading into the top-performing initiatives and campaigns as we progress through the AEP. As I shared with you on the last call, we did pull back from some of our historic channels, including DIRECTV and some of the lead aggregator partners, as we reevaluate our programs in these areas for 2023. In recognition of the dynamic nature of our end markets, we planned to test new channels with a small percentage of marketing budget allocated to test every quarter. One of the channels we are starting to lean into this year is our dedicated carrier arrangements to drive volume to our enrollment platform without the associated marketing spend, allowing us to preserve valuable member acquisition budget. This is becoming an important supplement to our core lead generation strategy. eHealth's omnichannel shopping and enrollment capabilities remain a key differentiator of our business model. We aim to provide a fluid, consistent experience as customers move across online and in-person interactions with our platform with an overarching goal to increase the total conversion rates from top of the funnel. In the past quarters, we made a number of investments to further augment enrollment options available to eHealth customers. The introduction of live agent chat and co-browsing has made it easier for beneficiaries to progress through the shopping and enrollment process in a way that fits their specific preferences, including the degree of agent assistance they want. For example, beneficiaries can begin the enrollment process online or progress as they talk to their family and consider plan options, and then call in for a co-browsing session with a licensed agent to answer any remaining questions they might have and to complete the enrollments. Again, the key goal is to increase the overall demand conversion on all of our platforms, regardless of how the final submission is made. As a result, you might see a mix shift of new enrollments into the hybrid online assisted category. Over the past year, we made significant enhancements to our call center operations, which are already driving a meaningful year-over-year increase in telephonic conversion rates. This included reengineering of our agent hiring and training processes, increased agent specialization by region and plan type, expansion of dedicated carrier and partner arrangements, and the introduction of the new agent-facing technology tools. The telesales model is composed predominantly of full-time, in-house agents that we plan to retain year-round with the goal of increasing average agent tenure and creating attractive careers for our best-performing sales professionals. Outside of the AEP, we expect the optimization post-utilization through sales of ancillary products and providing value-added services to our members and carrier partners. In summary, we took the following steps over the past year to prepare for this AEP. We reduced our LTC channels compared to a year ago, while meaningfully improving agent productivity through reengineering agent recruiting and training processes. We launched dedicated carrier and local market telesales, made changes to the marketing strategies focused on optimizing channel mix, increasing return on our acquisition costs, and fostering customer loyalty. We introduced new omnichannel tools, including co-browsing and agent chat to increase overall lead conversion rates on our platform. These improvements to our omnichannel shopping enrollment engine and marketing strategies are having a positive impact on our performance in the first fleet of the AEP. Compared to last year, we entered the selling season with a stronger pipeline and preset appointments with Medicare beneficiaries, which represent high intent needs. Our targeted demand generation campaign, combined with stronger telephonic conversions, are driving enrollments that are being made at significantly lower per-member acquisition costs compared to the same time a year ago. While we are still in the early stages of the AEP, we are pleased with our performance to date and believe it's a reflection of significant operational improvements put in place over the past year. In the individual and family plan segment, we remain cautiously optimistic about the growing ICHRA opportunity. ICHRA, which stands for Individual Coverage Health Reimbursement Arrangement, allows employers to fund IFT premiums for their workforce as an affordable alternative to small business coverage. The health insurance programs typically take time to gain awareness at scale and ICHRA will likely follow the same path. We do believe, though, that health insurance inflation continues to be a big driver of broader inflation in the country; ICHRA will be a benefactor as it provides employers with an opportunity to reduce their financial exposure and provides employees greater affordability of their health insurance. In preparation for the fourth quarter open enrollment period, we have launched a number of new partnerships, including some of the leading benefit administrators in the ICHRA market. Looking back at my first year at eHealth, I am satisfied with the progress we've made and believe this organization underwent a tremendous amount of positive change. The improvements we have made to our sales and marketing organizations are already making a significant positive impact and are an important step on our path towards sustainable profitable growth. eHealth has broader sector performance as AEP will inform our operational decisions for 2023. We will be finalizing next year's plans shortly after the AEP conclusion and plan to provide 2023 guidance as part of our fourth quarter earnings release. We also plan to hold an Investor Day in early 2023, and we'll be sharing more details when we report Q4 earnings. Above all, I would like to stress my conviction in eHealth's mission and the Medicare Advantage opportunity we are pursuing. Medicare Advantage continues to be a large and growing market with favorable demographic trends and I believe eHealth provides unique value to beneficiaries by offering a broad selection plan nationwide, along with tools and advisory to short-term plans and the ability to enroll either online unassisted or anywhere in between. With that, I will turn the call to our CFO, Christine Janofsky, for some additional color on our financials.

Thank you, Fran, and good afternoon, everyone. Our third quarter results reflect a reduction in member acquisition costs pursuant to our cost transformation plan combined with a significant improvement in Medicare agent productivity. During the quarter, we generated similar Medicare enrollment volume compared to the third quarter a year ago, while reducing variable acquisition spend in that segment by 37%. Third quarter Medicare revenue was $45.1 million, down 3% from Q3, 2021. Medicare commission revenue was $41.3 million, down 3% year-over-year. During the quarter, we recognized $1.7 million of positive adjustments or tail revenue in our Medicare business, reflective of positive cash collection trends on some of our older member cohorts. Third quarter Medicare non-commission revenue of $3.8 million was flat year-over-year and is comprised predominantly of carrier advertising revenue. Medicare segment loss was $23 million in the third quarter, compared to a loss of $52.9 million a year ago, reflecting the impact of our cost transformation program and increased conversion rates in our telesales organization. Medicare Advantage approved enrollment was approximately 37,800, a year-over-year increase of 3%. Total Medicare enrollment, including Medicare Supplement and Medicare Part D approved members, was approximately 44,900, or a 4% decline relative to Q3 of 2021. The year-over-year decline in Med Sup and Part D enrollment is driven by secular shifts in consumer demand, favoring MA and MAPD products, as well as our more targeted deployment of marketing spend on MA leads. We ended the third quarter with an estimated total Medicare Advantage paying membership of 582,000, which represents year-over-year growth of 4%. Total estimated Medicare membership was 905,000, which is an increase of 3% compared to a year ago. MA LTV for the third quarter was $953, down 2% on a year-over-year basis, reflecting stable churn observations on our historic third quarter cohort and a product mix impact. The third quarter is typically characterized by seasonally elevated per-member acquisition costs as we hire and train agents who are not yet fully productive during the quarter. At the same time, through our transformation program, the improvement to our sales and marketing operations resulted in a year-over-year decline of 35% in per-member acquisition costs. As we enter the AEP, we expect to see a meaningful drop in our acquisition cost per approved Medicare member and a favorable LTV to tax spread compared to Q3 of this year, as demand and conversion rates pick up. Third quarter Medicare Advantage online unassisted submitted applications grew 18% on a year-over-year basis and partially assisted applications grew 39%, as we continue to invest in omnichannel tools on our platform. Individual, Family, and Small Business segment revenue was $8.2 million with segment profit of $2.7 million, compared to $17.5 million and $12.5 million respectively in Q3 2021. The year-over-year decline in segment revenue and profitability is attributable mostly to lower tail revenue; in Q3 of this year, positive tail revenue in this segment was $1.8 million compared to $10 million in Q3 2021. We continue to observe favorable retention trends in our IFP business. The lifetime value of our non-QHP product grew 20% year-over-year. LTVs for QHP plans were down 2% after growing in double-digits in 2021 and Q2 of this year. Total Q3 revenue was $53.4 million, a decline of 16% year-over-year. GAAP net loss for Q3 was $39.1 million, compared to a loss of $53 million in Q3 2021. Adjusted EBITDA loss was $33.1 million compared to negative $55.2 million in Q3 of 2021. Moving now to our expenses, in the third quarter, total GAAP operating expense was $101.6 million, down 22% from $130 million in Q3 2021. The decrease in total operating expense was driven by a decrease of 40% or $20 million in GAAP CC&E expense and a decrease of 29% in total GAAP marketing and advertising spend from Q3 of 2021. On the fixed cost side, GAAP tech and content spend declined 5% year-over-year, while G&A increased 4% compared to Q3 a year ago. The year-over-year increase in GAAP G&A costs is primarily related to higher stock-based compensation expense. Last year, stock-based compensation was positively impacted by a $4.1 million credit due to a reversal of a prior stock grant to our former CEO, who departed a year ago. Third quarter operating costs also include a $3.7 million non-cash charge primarily related to the subleasing agreements we signed on our Santa Clara office, leading to the recognition of a lease impairment. The sublease of our Santa Clara property is part of the remote-first strategy we announced earlier this year and is expected to have a positive impact on our fixed cost structure over time. For the full year, we are now targeting total cost savings in excess of $90 million relative to 2021. These savings will be weighted towards variable spend as you saw in Q3 and will have the highest impact in terms of absolute dollar amount in the fourth quarter. We ended the quarter with approximately $165 million in cash, cash equivalents, and marketable securities, and $66 million in debt. Our balance sheet also reflects a commissions receivable balance of approximately $786 million that is comprised of $208 million that we expect to collect over the next 12 months, and $578 million in long-term commissions receivable. Operating cash flow for the second quarter was negative $29.6 million, compared to negative $71 million a year ago. This represents a year-over-year improvement of more than $41 million. On a year-to-date basis, for the nine months ended September 30, 2022, net cash used in operating activities was $8.3 million, which compares to cash use of $60.3 million for the first nine months of 2021, or an improvement of $52 million. These improvements in cash used represent the initial results of our cost transformation program and significant operational improvements implemented over the past year, and we believe we can make further improvements in the coming quarters. Trailing 12-month Medicare commission cash collections were $331.1 million, an increase of 1% compared to a year ago. Turning to our full year 2022 guidance, we are reaffirming the ranges we provided last quarter. I am encouraged by our execution in the first weeks of the AEP. The progress we have made towards increasing the efficiency of our telesales and marketing organizations over the last year can be clearly seen in the initial enrollment metrics and is a positive sign for the trajectory of the business in both the near and longer term. In summary, we are well positioned to execute against our 2022 plan while continuing to drive towards the cost and operations related transformational commitments we have made to our investors. With that, I'll turn it back over to the operator to open up the line for questions.

Thank you. Our first question will come from Tobey Sommer of Truist Securities. Your line is open.

Thank you. I was wondering if you could give us a perspective that you have both from your own business and appetite for marketing spend as well as the market perspective. We've heard from some other players that everything seems to be a bit more rational with competition down somewhat – would love to hear your thoughts.

Hi, Tobey. Nice to hear from you. Thanks for the question, of course. I would describe the environment as continuing to be competitive at least through the first three-plus weeks of the AEP. It's hard to predict what will happen in the remaining four and a half weeks. That said, I would say that looking at things from the eHealth perspective, the team has done a really good job in managing attack. And again, every day is a new adventure. But I attribute that to the good leadership that we've brought on board here in managing our channels as effectively as possible. So rational is all relative. So let's start there. And I think it all depends on how each marketing organization is performing relative to their own goals and objectives. And if they're performing consistent with their goals and objectives, it probably does remain rational; if they're not, they may do irrational things. So let's see how it all plays out through December 7th.

Sure. So maybe to kind of dig into that from a pricing perspective, for out in the market for selling leads, have those prices changed? And I know that's not the preponderance of the business, nor the focal point of growth, but that our excellent plan. Can you provide your expectations?

You broke up at the end. Can you say the last part of your question again, please?

Yeah. If we talk about pricing specifically, then it may distill and kind of get around that need for understanding any particular competitor's expectations in plans, and whether or not they're living up to them or not.

We closely monitor our competitors' activities as much as possible. Our channels differ significantly, particularly because we have strong online capabilities that our competitors may lack. In our online segment, we focus more on search engine optimization and paid search strategies. Our approach to direct mail varies as well, making it difficult to compare our spending to theirs. Overall, we are satisfied with our current spending compared to last year. However, this is just a snapshot in time, and we have about 30 days left in the Annual Enrollment Period, so our perspective could change soon. That's our current situation.

Could you discuss the scheduling of an Investor Day in early 2023 and the anticipated harvestable receivables over the next 12 months? It would be helpful to understand the company's cash flow position as we enter next year, especially considering AEP's impact on this situation.

Sure. I'll let Christine talk a little bit more about the cash flow. I would say, at a very general level, we're pleased with where we are from a cash flow perspective. From Investor Day, the goal there, of course, is really multi-dimensional; we want to present this leadership team to our investors and to analysts, share much more about the longer-range strategic objectives for the organization, and provide more insight into how we continue to see this business unfold and where we're going to take the company. It's a very different company today than it was a year ago, and that will continue to evolve between now and even the time when we schedule our Investor Day in late first quarter, early second quarter. Cash flow, I'll ask Christine if she wants to share a little bit more.

Sure. Thank you, Fran, and nice to talk to you again, Tobey. As we've talked about, certainly being cash flow positive is critical to this management team. That's been one of our goals as we revised our operating plan for 2022: to really reduce our cash burn. And as part of our revised 2022 guidance that we talked about on the Q2 earnings call, we increased our cash flow ranges by $30 million. And then also, as you think about our results for Q3, we're seeing that initial impact through those operating cash flows and the outflows improving by $52 million on a year-to-date basis as compared to the first three quarters of 2021. And then we think about heading into 2023 in Q1; we will be at a significantly lower cost basis on both the fixed and variable cost sides.

Okay. Thank you very much.

Thank you. One moment please while I file for our next question. Our next question will come from George Hill of Deutsche Bank. Your line is open.

Hey, good evening guys, and thanks for taking the questions. I kind of just have two topics I wanted to touch on. So, the first is you have CMS implementing the advanced marketing rules, I'm sorry, the advanced market recording rules for this year's AEP. I guess, can you talk about what changes that creates for you guys, if any? I mean, I know from the call center business, you guys have always been recording calls, but I don't know if the changes CMS has implemented have created any changes in your workflow?

Hi, George, thanks for the question. It really hasn't changed anything for us. We've always recorded calls because call quality is critically important to us for beneficiary protection. We're also grateful to continue improving the proficiency of our sales agents. One nuance this year is that there was a new requirement for third-party marketing organizations to inform beneficiaries within the first 60 seconds of a call that we don't offer all plans in their geographic area. However, this hasn't caused any issues for us in terms of directing calls to CMS. Our conversion rates are higher than last year, our telesales are robust, and our call quality remains very high. So, we have no concerns on the CMS side.

Okay. My follow-up question is that there seems to be some concern regarding margins, and the changes in TV marketing ads might lead to reduced churn this selling season, which could be beneficial for you, but might also slow down market growth slightly. Given that we’re only a couple of weeks into this, do you notice any macro-level factors that could affect the market, as opposed to specific improvements we might see?

I believe you're referring to the 45-day approval process for TV advertising at CMS following the new filing use. They have 45 days to review TV commercials that carriers or marketing organizations want to use. Since we are not utilizing DIRECTV this year, it doesn't significantly impact us as it might others. Reducing churn and increasing persistency are top priorities for us. CMS has expressed concern over certain commercials featuring celebrities aimed at beneficiaries eligible for Part B rebate, which have been limited to very few geographic areas and were likely over-promoted before. CMS has encouraged organizations to change their promotional strategies, which I think is a positive development. It's not beneficial for the industry to create any messaging that can be easily misunderstood. We fully support CMS's efforts to ensure that all communications reflect positively on the industry.

Okay. I appreciate the color. Thank you.

Thank you. One moment for our next question. Our next question will come from Ben Hendrix of RBC Capital Markets. Your line is open.

Thank you very much. I just wanted a quick question on the $90 million of cost savings this year. It makes sense that the variable costs were mostly accrued to 4Q. But I was wondering if you could give us some more color on how that's manifesting here in the early weeks of AEP. We're seeing that, for example, an increased online penetration both in unassisted and assisted mix there in terms of enrollment; could you provide a little bit more color on how that's accruing?

Hi, Ben. Thanks for the question. The cost savings, the cost transformation activities have been across a wide area of activity. I'm going to ask Christine to join me in this part of our conversation. We've been at it since April; that's when we first launched our cost transformation initiatives. There are still more opportunities that we have already identified for the remainder of this year and certainly into 2023. So, these are efficiencies and cost fixed and variable opportunities. They're intended to be executed in ways that are really aimed at efficiencies and minimally disruptive in terms of what they mean for the organization and what they mean for certainly our customers as well as our carrier partners. So as far as assisted and unassisted online, we look at all our channels as equal opportunities to support our growth objectives. We don't favor one over the other. The objective here is to meet customers where they want to be met. In fact, we've even taken it to new levels by introducing live agent chat. Perhaps in the past, there was a bias towards unassisted; we can actually improve the throughput on our top of the funnel by having the live agent chat capability. We believe that if it increases the acquisition costs incrementally, so be it. It results in a customer, and a customer that we intend to keep for a lifetime. That's the goal. So it's a different philosophy in eHealth today. The platform, there are other ways to create efficiency. We want that top of the funnel to be a source for lifetime value as much of the throughput as possible by introducing live chat. We think that there's greater opportunity for throughput.

I think you covered a lot of it, Fran. I think there's a couple of things that I'll mention. As we think about the cost transformation, we're looking at all costs, both variable and fixed. On the variable side, certainly, that will be the largest portion of our cost reduction for this year, mainly certainly from lower marketing spend and really focusing on the right channels that are going to provide us that right ROI and then having that corresponding reduction in the agent headcount to match that on a year-over-year basis. And then on the fixed side, really looking at all of our fixed expenses and making sure that we have that right cost structure in play and starting 2023 at a better cost basis than we did entering into 2022. We're continuing to look at additional opportunities both on the variable side as we continue to hone in on what are the right areas of focus, and then on the fixed side as well. One of the things that we mentioned was the Santa Clara lease. So we did a sublease on one of our office spaces, and that is something, as we have that remote-first strategy from a people side that is an area that we'll continue to look at opportunities as well as other fixed cost expenses.

Thanks for the color, guys.

Thank you. And one moment for our next question. Our next question will come from Daniel Grosslight of Citi. Your line is open.

Hi. Thanks for taking the question. One of your competitors noted that there's more MA planned differential this AEP, which is leading to more shopping. I'm curious if you're seeing the same thing off of your platform and what that may mean for one, you approved policies of AEP, and then two, churn in older cohorts in your ability to recapture those seniors.

Hi Daniel, thanks for the question. I wouldn't necessarily call it more planned differential; instead, I see it as a greater value proposition, whether in the core or supplemental plans. Additionally, economic pressures are increasing due to inflation, which is particularly affecting those on fixed incomes. It's important to consider the 60% of Americans who are either in original Medicare or have supplemental Medicare and are exploring Medicare Advantage. This option offers a more substantial value and can lessen their financial exposure compared to original Medicare, which includes costs like coinsurance and deductibles. Medicare Advantage plans, especially those with a $0 monthly premium, provide significant protection. While there may be concerns about beneficiaries switching plans, it's also possible for them to switch but remain with the same carrier, as many carriers provide multiple options in the same area. It’s crucial to consider that those in original Medicare can gain considerable protection by looking at Medicare Advantage alternatives, even those with supplemental coverage, as high monthly premiums can be burdensome, especially with rising inflation. Referencing your original point about differential, I see the current value proposition as very appealing for American beneficiaries today.

Yes. Makes sense. Okay. And then on the ISP segment, the Inflation Reduction Act extended subsidies, ACA subsidies to 2024. I'm just curious; I know you're not over the index to the qualified brands, but I'm curious if you think that will translate into faster ISP growth this year and next.

I don't necessarily think it's going to be accelerated growth. I would call it more moderate growth. That's our thinking right now.

Thank you. And this will end the Q&A portion of the conference. I would now like to turn the conference back to Fran Soistman for closing remarks.

Well, thank you, operator, and thank you all very much for joining us this afternoon. Thanks for your time.

This will conclude today's conference call. Thank you all for participating. You may now disconnect and have a pleasant day.