Good afternoon. My name is Abby, and I will be your conference operator today. At this time, I would like to welcome everyone to Oscar Health's 2023 Second Quarter Earnings Conference Call. Thank you. I will now turn the conference over to Cornelia Miller, Vice President of Corporate Development and Investor Relations.

Thank you, and good evening, everyone. Thank you for joining us for our second quarter 2023 earnings call, where we'll discuss our strong first half results, disciplined execution and path to profitability. Mark Bertolini, Oscar's Chief Executive Officer; and Sid Sankaran, Oscar's Chief Financial Officer, will host this evening's call. This call can be accessed through our Investor Relations website. Full details of our results and additional management commentary are available in our earnings release, which can be found on our Investor Relations website. Any remarks that Oscar makes about the future constitute forward-looking statements within the meaning of safe harbor provisions under the Private Securities Litigation Reform Act. Actual results may differ materially from those indicated by those forward-looking statements as a result of various important factors, including those discussed in our quarterly report on Form 10-Q for the quarterly period ended March 31, 2023, filed with the SEC and other filings with the SEC, including our quarterly report on Form 10-Q for the quarterly period ended June 30, 2023, to be filed with the SEC. Such forward-looking statements are based on current expectations as of today. Oscar anticipates that subsequent events and developments may cause estimates to change. While the company may elect to update these forward-looking statements at some point in the future, we specifically disclaim any obligation to do so. The call will also refer to certain non-GAAP measures. A reconciliation of these measures to the most directly comparable GAAP measures can be found in the second quarter 2023 press release, which is available on the company's Investor Relations website. With that, I would like to turn the call over to our CEO, Mark Bertolini.

Thank you, Cornelia. Good evening, everyone. I have been at Oscar just over four months now, and have spent my time continuing my deep dives across the business. I am feeling even more optimistic now than when I joined the company in April. I will discuss my key learnings in a few moments, but let me begin by providing an overview of our second quarter performance. We had a strong quarter, and our results demonstrate that we are executing on our path to profitability. All of our key metrics are performing in line or favorable to plan at this point in the year, and our NPS increased to a record high of 57% this quarter. Our medical loss ratio improved 230 basis points year-over-year to 79.9%, driven by our disciplined pricing strategy and total cost of care initiatives. We reached total company profitability for the second consecutive quarter with an adjusted EBITDA of $36 million and with a first half adjusted EBITDA of $87 million, increasing our confidence in our total company adjusted EBITDA target for next year. We continue to view insurance company profitability this year and total company profitability next year as important milestones for us. We are very encouraged by our results to date. Sid will walk us through a more detailed review of our financial metrics later in this call. As we look to next year, we plan to maintain a disciplined pricing strategy that we believe appropriately targets both growth and margin expansion. Our growth strategy for 2024 focuses on leveraging the breadth of our deep provider partnerships to expand into more rural areas. We are planning to increase our service area footprint in more than half of our current states, which would meaningfully increase our overall TAM next year. On the margin side, we have identified increased benefits from our total cost of care initiatives in areas including the PBM and fraud, waste and abuse efforts. We expect to drive further administrative cost savings from our increased scale and overall efficiencies from our technology. Most importantly, though, we are expanding our innovative and affordable product offerings to continue providing a great member experience. For example, following the success of our diabetes plan which targets members with a specific disease state, we are introducing our Breathe Easy Plan for members suffering from COPD and other respiratory conditions. Available in select markets in 2024, this plan will reward and incentivize members around specific COPD-related benefits with the end goal of driving better clinical outcomes and lower cost of care. With accessibility being central to our mission, we have also developed an enhanced version of our Spanish-speaking features to better serve the 30% of our membership base who are Spanish-speaking. Our consumer-focused approach has resonated well with these members, and we currently enjoy an NPS of 80. As we strive to deliver a best-in-class member experience, we believe that these are the types of personalized offerings and consumer-friendly features that can help us continually enhance our competitive advantage and industry-leading NPS scores. Let me now turn to some of my key observations over the last 128 days. I have met with leaders across the organization and have spent time digging deep into critical aspects of the business, including our 2024 pricing and market position; the areas of our operations where I see opportunities for greater efficiency; and our long-term strategic positioning. Overall, I have been impressed with what I have found. Over our 10-year history, we have invested in our infrastructure and operations. We have made great strides in rightsizing our operations for our scale, but I see opportunities for even more value creation in core functions. For example, we have strong processes in place for risk adjustment. But we can further enhance these capabilities and build an even greater degree of efficiency and impact. There has already been material work underway that is yielding a positive result, and I plan to spend even more time in these areas going forward. Our people are our most important asset, and I have spent a fair amount of time assessing our team, getting a better understanding of our strengths and seeing where we can build upon our existing expertise. As we look at the needs of the organization going forward, we are making some leadership changes and bringing in some key hires to enable us to better build and execute on our strategic priorities. First, as we have discussed, Sid Sankaran, our interim CFO, is leaving Oscar. We are very appreciative of his leadership, and I look forward to continuing to work with him as a member of our Board. As we look to fill the position, we conducted a very thorough external search. However, it became clear throughout the process that we already have the best person to take on that role internally. We are thrilled to share that we are welcoming Scott Blackley back to the role of CFO effective August 14. Over the last 10 months, Scott has served as our Chief Transformation Officer, spending his time focusing on aligning our overall revenues and costs, enhancing our operational efficiency and building out our Campaign Builder product. Today, we are on track to hit our key targets and we believe there is no better person for this next phase of Oscar than a seasoned leader who understands the nuances of our business. As part of this transition, I will be spending more time with our operations team, bringing my decades of experience as an operator to drive continued efficiency and momentum across key functions. We are also bringing on two new hires to round out our leadership bench, an industry veteran to run our corporate strategy and institute our management processes; and a senior leader to lead and ensure we continue to expand our +Oscar business. I have had the privilege of working closely with both individuals during my time at Aetna. They will be starting in the coming weeks, so you will hear more about them during our next earnings call. Let me spend a moment on how we are thinking about the future. I have been embedding critical processes that will enable our long-term strategic planning efforts. As part of this work, I have initiated a new management process, built a framework for our multiyear plan, reviewed our tech roadmap and met with the Board to kick off a cadence of meetings that will focus on succession, long-term strategy and performance. I plan to spend the rest of the year driving continued performance improvements, laying the groundwork for our multiyear strategy and accelerating +Oscar to expand on our modular approach. With respect to +Oscar, we have been seeing positive results with our first Campaign Builder clients. We currently have 235,000 unique patients active in the tool and have been seeing high engagement rates. We expect to continue our momentum in the second half of 2023, and look forward to bringing more modular components like Campaign Builder to the market. Speaking of our technology, Mario has settled into his role as President of Technology and Chief Technology Officer, and among many other things, is focused on how we can integrate AI into our tech and product roadmaps. As we have shared in the past, our proprietary tech stack allows us to be exceptionally nimble in our response to major technological paradigm shifts like AI. We have identified opportunities to further streamline administrative processes, enhance decision-making capabilities and ultimately provide a more personalized experience for our approximately 1 million members. We have developed dozens of AI prototypes and have made progress on a number of use cases in features that we plan to continue rolling out in the coming months. One example is Campaign Builder AI Actions, which leverages large language models to intelligently monitor for signals and deliver relevant interventions that better serve our members and patients' clinical needs. If you are interested in staying up to date on our latest AI insights and developments, please visit our website. As it relates to the long-term strategy, we are working through an initial set of strategic pillars that will guide us through the next few years. First, we want to drive sustainable profitability and expand margins through market-leading and scalable operations. Second, we believe that member engagement is one of our key differentiators and want to continually invest in our member experience. Third, I believe we should look to diversify beyond our current offerings to leverage our member-centric approach to an increasingly more individualized market. And finally, we will continue to externalize our tech platform so that we can power others throughout the health care system. I believe these are the right strategic priorities for us over the next several years. We will share a more detailed long-term view of the company with you at an investor conference next year. And with that, I would like to turn the call over to Sid. Sid?

Thanks, Mark, and good evening, everyone. As Mark noted, our second quarter results show the business is performing in line to favorable with our expectations and that we are executing well against our plan. We ended the quarter with just under 1 million members, which was consistent with our pricing and churn assumptions. On the volume side, membership has been slightly ahead of plan. While we have had limited SEP growth this year relative to prior periods, this has been largely offset by Medicaid redeterminations. At this point, Medicaid redeterminations have resumed in all of our states. Early data indicates that the emerging Medicaid redeterminations are healthier than expected and are not exhibiting any anti-selection patterns. I'd also note that we are now eligible to enroll new members in Florida again. As I noted last quarter, our portfolio strategy purposely and successfully shifted our member mix closer towards the market average. We now have a higher proportion of renewals than any time in our recent history, which has resulted in an older membership that looks very similar to the overall ACA population. Shifting our mix has been part of a deliberate strategy, which has resulted in a lower projected risk transfer as a percent of premiums this year. Our direct and assumed policy premiums were $1.6 billion in the quarter, a modest 3% decrease year-over-year driven by membership and partially offset by rate increases. Similar to trends we saw last quarter, our premiums before risk adjustment insurance, which includes the impact of our lower risk transfer, grew 8% year-on-year to $1.5 billion. Turning to medical costs. Our medical loss ratio improved 230 basis points year-on-year to 79.9% due to our disciplined pricing actions and total cost of care initiatives. Our overall claims trends have been in line to slightly favorable relative to our pricing expectations for the first half of the year. We are pleased with this trend, and it includes our expected mix shift to members with higher risk scores as previously noted. Within specific service categories, inpatient is performing in line with our pricing assumptions. Outpatients and Rx are slightly higher than expectations, and professionals materially below. Let me focus on risk adjustment for a moment. Historically, we've had a younger and healthier population than the market average and have therefore been a large payer into the risk adjustment program. The final CMS report for last year's risk adjustment was favorable to our expectations, driven by outperformance in value capture initiatives, including a successful pilot application with AI. However, we strengthened our RADV accrual and IBNR, which largely offset the benefit. While we expected a lower risk transfer this year due to our updated member mix, the initial weekly report for 2023 still came in favorable to our expectations. Given that we are only partway through the year, we have maintained an appropriately cautious approach to our risk adjustment reserve, which we will reevaluate in the coming quarters as we see more data. Switching to administrative costs. Our InsureCo administrative expense ratio improved 280 basis points year-on-year to 16.7%, driven by distribution optimization, vendor efficiencies and operating leverage. Driven by the MLR and InsureCo admin ratio benefits, our combined ratio improved 500 basis points year-on-year to 96.7%. Our adjusted administrative expense ratio of 19.5% improved 420 basis points year-on-year due to the aforementioned improvements in the InsureCo admin ratio, lower holdco expenses and higher net investment. Our strong operating results drove another consecutive quarter of total company profitability with an adjusted EBITDA of $36 million. Our first half 2023 adjusted EBITDA of $87 million is nearly $200 million higher than the same period last year. We are very pleased with our results to date and the momentum we've seen throughout the first half of the year. Shifting to the balance sheet. We ended the second quarter with $3.8 billion of cash and investments, including $250 million of cash and investments at the parent. As a reminder, we expect second quarter cash will be a high watermark for both cash and investment income for the year as a large working capital benefit from our RA payable wears off next quarter. We expect to pay out the 2022 risk adjustment in August, and our lower projected 2023 risk transfer will continue to build throughout the year. Our capital position remains very strong. Our subsidiaries had approximately $840 million of capital and surplus, including $290 million of excess capital, driven by solid operating performance through the first six months of the year. We believe our excess capital positions us well to fund future growth and allows us additional opportunities to optimize our capital position over time. Based on our encouraging first half results, we are making a few updates to our 2023 guidance. We now expect our MLR will be towards the low end of the 82% to 84% range. Our lower MLR and higher investment income is also projected to drive our insurance company adjusted EBITDA to the top end of the $20 million to $120 million profit range. Importantly, we anticipate our total company adjusted EBITDA loss will be at the high end of the range or towards a $75 million loss for the year. In summary, our first half results increase our confidence in achieving insurance company profitability this year and lay a great foundation for total company profitability next year. We are very pleased with our progress to date and how we are positioned to execute in the back half of the year. As we look to the future, we believe our disciplined pricing approach, innovative offerings and industry-leading NPS sets us up well to win for many years to come. Finally, I'd like to say that coming back to an operating role at Oscar has been a wonderful experience and a real privilege. The finance team is in great hands with Scott, and his contributions as Chief Transformation Officer have set us up well for success. As Mark also noted, I'm feeling incredibly optimistic about the company's future and believe we have the right plan, people and strategy in place to execute on our goals. I look forward to continuing to work with Mark, Scott and the rest of the management team from my seat on the Board.

Thanks, Sid. In summary, we've had a strong first half of 2023. Our results show that our discipline, focus and execution are delivering meaningful impact across our business. We are on track with all of our key metrics and expect to achieve insurance company profitability this year and total company adjusted EBITDA profitability in 2024. As we look to the remainder of 2023, we see more tailwinds than headwinds, which we believe positions us well for 2024. We believe that the individual market is the future, and that our experience, consumer-focused approach, technology and capabilities will enable us to continue thriving amidst its dynamic environment. I would like to thank the Oscar employees for their continued dedication and focus. They are the reason why we continue to be in a position to serve our members and make health care more affordable, convenient and accessible for people across the country. With that, I'd like to turn the call over to our operator for the Q&A portion of the call.

Your first question comes from Stephen Baxter from Wells Fargo.

Just to make sure we have this right. I heard the commentary on the risk adjustment. 2022 came in favorable, but you didn't take much of it through to MLR EBITDA. If you could maybe help us with the impact on either line, just how that translated through the P&L, that would be great. And then just to confirm the approach on 2023, it sounds like the initial read you're getting from weekly is favorable relative to your initial assumptions, but that hasn't yet been reflected in either your results this quarter or the revised full year guidance that you provided because you're taking a bit of a wait-and-see approach on that. Could you just confirm those couple of things would be very helpful for us.

Steve, it's Sid here. Thanks for the questions. First, on 2022, effectively on 2022, we did see favorability in our final RA submission. That was offset somewhat by an accrual that we put up for RADV. And I would articulate our position as being cautious around margin with respect to 2022 claims. So we did top up the IBNR somewhat. As you look to 2023, while it's early, I would say the initial weekly submission was more favorable than we had anticipated at this point in the year. And we did highlight that we do expect lower risk transfer in 2023. So we did have some partial favorability flow through into the P&L this quarter, but I would say, relative to the initial weekly report, it was a small amount of favorability. And we'll follow our process over the course of the year. And as the data emerges and we get more confidence in the data, we'll revisit that accrual in the coming quarters.

Your next question comes from the line of Jonathan Young from Credit Suisse.

I just want to go to Florida. Your enrollment cap was recently moved. So how are you thinking about any benefit as members are redetermined in the back half of the year there? And just in the market generally? And then separately, I believe there was a restriction on extracting capital from the Florida part of the agreement. Just curious how this changes your approach to the market given so much of the capital was in Florida.

Thank you, Jonathan. I believe new members will be able to enroll, and we expect this to happen as part of our regular operations as we return to the exchange. We have previously discussed the profitability dynamics related to SEP members, so there are no changes there. Regarding our return to the Florida market, I want to emphasize that the terms of our agreement are consistent with what we had when we first entered the state, particularly in relation to the regulators. We aim to maintain constructive and proactive relationships with our regulators, and we appreciate the support we have received as we re-enter Florida. We look forward to another successful open enrollment period.

Okay. Great. And I think you mentioned that you see some increased benefits on the PBM side. Just curious what else you see on the PBM side beyond the initial contracting that you conducted?

Yes, Sid here again. I don't have much to add to that. We've successfully renegotiated a PBM contract. As Mark mentioned in previous calls, we reevaluated the contracting process for 2023, and we expect that the benefits will continue to grow in 2024. So there's nothing new to report on that front.

And we'll continue to evaluate the pricing on a quarterly basis as we communicate with our vendor.

Your next question comes from the line of Michael Ha from Morgan Stanley.

As we look to next year and your ability to hit enterprise profitability, just given your optimism around membership growth next year, if you do achieve very strong membership growth, I'm curious, is there a level of growth next year that you believe could potentially place some pressure on your ability to achieve profitability? Or do you believe you're in a strong enough position now that you can realize enough operating leverage regardless of the magnitude of growth next year? And then you also mentioned expanding your footprint in more than half of your states. As we think about the composition of that growth, does it matter where that growth ultimately comes from newer or older existing markets and your ability to hit profitability?

Michael, it's Sid here. I'd probably make two points in response to your question. First, your first question. I think it's important to just remind ourselves that Oscar really has been an execution story. And to quote Mark, we're very focused on increasing that internal capital generation. So as we grow and as evidenced really by our financial performance in the first half of the year, you see that on the MLR side, we've been pricing for margin expansion. And we have had a real strong focus on best performing markets and staying disciplined. So new membership and new membership growth is really positive operating leverage to our story. And so we don't really see growth as a constraint to achieving that profitability target. With respect to the second question, I think we've also commented about this. I think the vast bulk of our markets right now are performing at target MLRs. And so we've highlighted that in the individual market with some of the exits that we've made, we're very confident in our current market performance. As you know, pricing has just been released and early, but obviously, we're pricing in line or above trends. And so based on the current portfolio of how the individual market is performing and again, just looking at the financial performance through the first half of the year, you're starting to see that definitively in the P&L. We feel good about both the expansion into new markets and how current markets are performing. So no real flags there.

Great. And if I could just ask one follow-up question about, I guess, the bridge to membership growth next year. If you were to bridge it, which bucket would you deem as being the most significant to achieving at least 20% premium revenue growth next year? Could it be the Florida enrollment cap removal, toggling broker commission back up or your 2024 rate strategy? Any color there would be great.

We're looking to diversify our revenue across more markets. We have set our prices appropriately and with margin considerations in certain markets where we believe we can accelerate growth elsewhere. Florida will grow, but not at the rates that have supported us since 2022. This allows us to be much more efficient from an operating leverage standpoint compared to 2022. Therefore, we do not anticipate the kind of ramp-up typically associated with growth in the latter part of the year as we move into 2024.

Yes. And I would just highlight a couple of things. I think you heard in Mark's prepared remarks that our NPS was at an all-time high this quarter. I mean we really do not see any of our other competitors bringing to bear the customer experience or innovation that Oscar does. And so we're very pleased with how NPS has landed so far and expect to continue to invest in the member experience.

And we'll be using Campaign Builder as a tool and reenrollment. And growth in this fall enrollment, as we begin to address directly to our members on the opportunities they have here at Oscar.

Your next question comes from the line of Gary Taylor from Cowen.

Just had a couple of questions. One, followed your commentary on the '22 and '23 risk adjustment. Payable accrual and the offset that you called out for RADV accrual and IBNR. Question was, why are the claims payable on the balance sheet down about $100 million sequentially with including this IBNR boost? I mean, it just implies inventories are down pretty substantially sequentially.

We have worked diligently to ensure that we efficiently collect our risk-adjusted information, settle with providers, and manage our excess reinsurance coverage. This process cannot be effective with claims in backlog, so we have reduced that backlog. Although we haven't fully integrated this into our reporting, we see it as a significant opportunity to increase our efficiency and maximize our internally generated capital.

Yes. So Gary, just adding, it's Sid here, adding a little bit more color to that. We did, in particular this quarter, to Mark's point, as part of a deliberate operational strategy, have three effectively large settlements that we cleared out this quarter. And so one of the reasons you've seen our DCP be so high is as we have had a fair amount of bulk reserves up for those settlements. So as those work down, you should expect DCPs will come back a little bit more in line, which will probably be higher than the market, but hopefully, our trend line brings the DCPs down.

Sooner or later, you run out of claims.

So we should still expect it to come down, and there's no P&L impact to that. It's a cash flow dynamic?

That's right.

Got it. And just one more question for me. Since AI is obviously a major topic this year, and Mark, you touched on it a bit, could you provide more examples regarding the AI interventions you mentioned? Are you referring to clinical interventions or notifications with clinicians and providers? Or are these more related to interventions with your beneficiaries? What are some specific examples you have in mind?

Gary, can you hear me now? I want to highlight two examples that I’m particularly enthusiastic about and encourage everyone to check out our website. We decided to make several of our insights and approaches to applying AI publicly available. The first example involves our claims system. When we process claims, we generate explanations that can be quite complex and hard to interpret. We've developed a language model that simplifies these outputs into more understandable language, helping our internal claims team quickly grasp the reasons behind whether a claim was approved or denied. Additionally, we aim to extend this capability to providers and members through a web application. This example underscores how a sophisticated claims system, combined with a language model, can enhance user experience. The second example also comes from our claims system, focusing on how we handle provider contracts, which can be lengthy and intricate. We've trained a language model to analyze these contracts effectively, enabling it to assist our internal staff by pre-filling configurations for our system based on contract contents. Over the past few years, we’ve developed tools to support this process, and integrating these language models enhances their functionality significantly. We're eager to expand these capabilities to more organizations within Oscar so they can also benefit from our advancements in AI. For more details, please visit our website, where we continuously update information on these developments.

Okay. I'll take a look. It sounds like the nearest term opportunities are still heavily focused on the administrative side, I think as some others have talked about, if I am understanding...

Yes. So I should answer that part of your question as well. Yes, we have a couple of clinical use cases that are in the virtual primary care practice, for example, around some summarizing lab results, but they all have a human in the loop. There's a lot of work happening right now around AI governance and clinical use cases. We tend to be at the forefront of helping do that. But on the operations side, there's so much more that can be done that I think clinical use cases are incredibly interesting for us. We can take a bit more time on rolling those out very thoughtfully.

Your next question comes from the line of Josh Raskin from Nephron.

Just SG&A or I guess, just the G&A expenses. When you take out stock comp in the quarter, it looks like they were up about, I don't know, $8 million, $9 million sequentially. And I don't know if stock comp is in any of the other line items, so that may be messing it up. But I'm just curious if actual dollars were up and kind of what's driving that?

Yes. Josh, Mark. That is investments in the back end, things like fraud, waste and abuse and other services that we're paying for, that we're getting in our underlying claims results.

Is it accurate to say that more than just reinvesting some of the savings you have identified has led to a significant year-over-year decrease in dollars?

Yes.

Okay. And then Mark, you made an interesting comment that, over time, I know it's a longer-term question, you look to diversify beyond your current offerings. And then just to pose that with the commentary you made around it's an individual market. Should we be thinking about larger offerings back into MA or other individual markets? I'm just curious more color on that.

There are 35 million people remaining in the insured employer market, including individual, small group, and middle market employers. We see an opportunity to move towards defined contribution, where employers are less concerned about a few sick cases affecting the contribution pool. By stabilizing that segment, we can offer a more flexible benefit program to other employers through Individual Coverage Health Reimbursement Arrangements (ICRAs) and defined contributions. This is one strategy where we believe we can excel, mainly due to our platform and our capability to effectively reach customers and enhance member experience. Another focus is on Medicare Advantage. With anticipated pressure on rates from the federal government regarding risk adjustment, we see an opportunity to assist health systems by improving their Medicare margins from a negative 3% to a positive range of 4% to 8%. This could significantly enhance their Medicare business results. There is considerable work ahead, including the need to fully externalize our platform and secure integration partners. We are in discussions with potential partners to ensure we can effectively reengineer business processes and collaborate with major health systems to establish a new private label Medicare Advantage business.

Okay. Got you. So that's going to be a narrow network, MA, sort of the Oscar model, right, which will be high customer experience.

Your next question comes from the line of Kevin Fischbeck from Bank of America.

Great. I wanted to go to the redetermination comment that you made earlier. I think you said that the risk pool is coming in a little bit better than you thought. I guess what had you been planning for as far as the risk pool? Did you think it would be equal to or worse than your current risk pool?

Yes, it's Sid here. Previously, we mentioned that we expected it to be slightly higher acuity. While it's still early and hasn't significantly impacted our portfolio yet, it's come in a little better than we anticipated, but we will continue to monitor it closely.

And I guess when you think about the visibility into that, I guess, because obviously, it's relatively new membership. I mean, do you feel like during past SEPs when the new members come on that you have relatively real-time information into that acuity? Or does it take a quarter or two before you can really get a sense for where that is?

Well, I think, Kevin, as you know, honestly, every time you get a new member, there's a lag in terms of risk scoring and of course, some of the key drivers of the boat-like pharmacy. But I think with respect to our data and systems, we have as good data and systems around the spaces as anybody in the industry. And so we feel we have a good line of sight into it.

And so when you think about how you price next year because, obviously, next year, the membership is going to be coming in more fully from redeterminations at least from a nine-month perspective, but probably don't remember as well. Did you also assume that higher acuity into next year, so if it ends up staying in this acuity, is that a tailwind? Or is that something that's still TBD in your final bids?

Well, I think as you look to pricing, you'll always want to have discipline and caution. So until you've realized the experience, we wouldn't price it. So I think we still take a cautious view around those Medicaid redeterminations. And obviously, again, from a pricing perspective, as the experience comes in, we can revisit that over time.

And then maybe just going back to another question about kind of that breakout of the membership growth that you think you guys can do next year. How fast do you think the market is going to grow next year between determinations and everything else, like what the industry is going to be growing?

We have said before high teens for membership and low 20s for premium.

Your next question comes from the line of Nathan Rich from Goldman Sachs.

Maybe just building up the last question. Could you maybe help put in context the geographic expansion? I know you said increasing your footprint in half your states. What's that kind of doing to the TAM that you can go after as we think about potential membership growth next year?

Yes, Nathan, it's Sid. I'll take that. Firstly, in the broader market, we still don't know the final pricing and size regarding our growth. However, we believe there is a significant increase in our total addressable market. The main factor we've mentioned is the rural service areas where we have strong relationships with providers, and there's enthusiasm for growth with us. Additionally, another unique factor is our innovative product offerings, which Mark has discussed, allowing us to address various segments of the market. Ideally, we are anticipating double-digit growth in our total addressable market, but it largely depends on the final pricing and the outcomes in different markets.

Okay. Great. That's helpful. And then, Mark, you had mentioned bringing in new leadership for +Oscar. Any change in kind of priorities or opportunities for that business from your point of view?

The areas where we will focus with the new leadership is to accelerate our +Oscar development. Now that we are comfortable with our ability to deliver on profitability, although we won't lose that focus, we now want to start hardening the platform in ways that we can get external to the market sooner rather than we otherwise thought we could. We think bringing leadership on now, not from the standpoint of development and building out the platform, which Mario and his team have done very well so far and will continue to do, it's more about the commercialization and go-to-market side +Oscar and how do we address the market. The component-driven approach, which components will come next, but also how do we season the market in a way where we can approach a full platform with other actors in the healthcare ecosystem. The other question going on board is the person that will help us focus on long-term strategy and the cadence necessary to deliver on that strategy over time. And so I have a way of approaching strategy that we used at Aetna, a management process that supports it and a reward mechanism that incents it. And so we're building that out as we speak.

There are no further questions at this time. This concludes today's conference call. You may now disconnect.