Good morning and welcome to the UnitedHealth Group Third Quarter 2020 Earnings Conference Call. A question-and-answer session will follow UnitedHealth Group’s prepared remarks. As a reminder, this call is being recorded. Here is some important introductory information. This call contains forward-looking statements under U.S. federal securities laws. These statements are subject to risks and uncertainties that could cause actual results to differ materially from historical experience or present expectations. A description of some of the risks and uncertainties can be found in the reports that we file with the Securities and Exchange Commission, including the cautionary statements included in our current and periodic filings. This call will also reference non-GAAP amounts. A reconciliation of the non-GAAP to GAAP amounts is available on the financial and earnings reports section of the company’s Investor Relations page at www.unitedhealthgroup.com. Information presented on this call is contained in the earnings release we issued this morning and in our Form 8-K dated October 14, 2020, which may be accessed from the Investor Relations page of the company’s website. I will now turn the conference over to the Chief Executive Officer of UnitedHealth Group, Mr. David Wichmann. Please go ahead, sir.

Good morning and thank you for joining us today. The past nine months have hopefully provided you a window into both the values and capabilities of this organization and how they enable us to serve our customers, patients, care providers, team members and their families and you, our investors, in a period of unprecedented challenge. I am fortunate to witness up close the exceptional work of our team every day, an innovative, growing and highly adaptable enterprise driven by the compassion, expertise and restless spirit of our 325,000 people, over 120,000 of them providing care on the frontlines. Our collective experiences over this year have made us an even more deeply committed and energized organization about our potential to help advance the next generation health system, one which is fair, affordable, simpler and effective. Our team combines vision with sharp focus on day-to-day execution, delivering strong, well-balanced results across the enterprise. Third quarter adjusted earnings were $3.51 per share with the decline from the year-ago quarter reflecting the swift customer and consumer support actions we committed to from the very beginning of the COVID-19 pandemic. Based upon this performance and forward estimate of pandemic impacts, we are updating our full year 2020 adjusted earnings outlook to a range of $16.50 to $16.75 per share. In this, we remain committed to ensuring any financial imbalances arising from the pandemic are addressed proactively and fairly for those we serve. We have done this consistently over this period even as the ultimate outcomes remain unclear. As the timeliness of relief to our stakeholders is critical, service, fairness and performance with a long-term view, this is what you could continue to expect from us. You should also expect this enterprise will apply its innovative spirit to contribute in new and different ways as our capabilities expand and circumstances require. We have partnered on and led clinical trials, helping resolve the nation’s critical PPE and PCR supply chain issues and enabling more rapid testing at considerable scale, while keeping the health workforce safe. We are supporting state testing operations in California, New Jersey, North Carolina and Indiana and contact tracing in New York City. We are supporting the Mayo Clinic’s development of convalescent plasma and some of the most promising vaccine and antibody trials. We have enabled workforce safety through the development of ProtectWell, a protocol processing technology to enable the safety of the health workforce as well as the safe opening of businesses, schools and nursing homes. We are working to assist with employees’ health coverage transitions through our GetCovered campaign now being offered by employers to assist people who have lost their jobs. We provided $2 billion in liquidity relief for the health system and our customers and consumers will realize over $3 billion in premium and cost sharing relief, including $1 billion in estimated rebates. We have contributed more than $100 million of financial support and 6 million pounds of meals for communities suffering from food insecurity, homelessness, and health disparities. These efforts are possible, because we operate a capable set of businesses and capacities that are leading the development of the next generation health system and expanding our opportunities to serve. Today, I would like to give you a brief sense of this work. Early in the pandemic, we quickly enabled Optum physicians and the physicians of UnitedHealthcare’s most vulnerable patients to adapt and expand rapidly to meet the needs of millions of patients for care of chronic and emerging conditions. This included advancing telehealth by creating direct connections between patients and their own physicians, a critical element to highly effective digital health, ensuring adoption will extend well beyond this crisis. So far this year, OptumCare physicians have facilitated 1 million digital clinical visits directly with their patients. And we are rapidly developing a proprietary set of distinctive tools and aligning our clinical practices to further develop and amplify this capability. I am sure you can see how advancing modern telehealth fits into our overall strategy to build high performing systems of care. Our growing therapeutics capacities are positively impacting the management of chronic diseases. With the introduction of Level 2, a digital therapy developed to improve the lives of the 30 million people with Type 2 diabetes, we are helping patients move toward remission of the disease. Level 2 uniquely measures signals and applies artificial intelligence engaging people in producing better health outcomes. You can expect more digital therapeutics from us in the coming months and years. Our growing capacities are especially apparent within our OptumCare platform, where 53,000 physicians across 1,500 local patient-centered facilities serve nearly 20 million patients, over 3.5 million of these in some form of risk arrangements, with 1.3 million Medicare Advantage or dually-eligible members under global capitation. OptumCare creates substantial value by building a deeper clinician patient relationship and by leveraging data and artificial intelligence to enable our clinical model to intercept and treat disease early and proactively, leading to better health outcomes, value and industry-leading patient experiences. Our patients are experiencing safer, healthier, more fulfilling lifestyles, spending one-third fewer days per year on average in a hospital bed and 40% fewer days in a skilled nursing facility than patients supported by traditional Medicare fee-for-service. Moreover, our most advanced care delivery practices deliver this high-quality care at upwards of 40% lower costs than the equivalent traditional Medicare benefit, with the value fully reflected in improved benefits and lower costs for seniors, all at world-class NPS scores in the mid-70s. The proven clinical success of Optum Senior Care offerings supports our considerable growth goals for OptumCare and also demonstrates the longer-term potential to greatly benefit consumers and commercial offerings. We have been building this platform for over a decade now and expect it to continue to grow at strong double-digit rates for years to come. Another aspect of a modern next-generation health system is managing the specialized and costly medications of the future in a way that works for patients, clinicians, employers, and payers. Our OptumRx integrated specialty solution brings a total approach to managing complex conditions across both the medical and pharmacy benefits, where we are able to generate up to $37,000 in annual savings per patient by employing clinically appropriate care at more convenient lower-cost sites. This approach is enabled by Optum’s growing footprint of integrated community pharmacies which will grow by over 60 centers in 2020 and the number of patients served with our infusion services will grow at double-digit rates. We expect this to be another durable growth trend given the much safer and clinically equivalent patient experience. We see OptumRx as continuing to transform to be a leader in pharmacy care services. Put differently, we believe the value for people and the system from pharmacy care services resides in managing personal engagement in health, not just supply chain management. This plays to our strengths and will increasingly contribute to the growth of OptumRx in the years ahead. UnitedHealthcare continues to focus on the very needs of healthcare consumers. In the next generation health system, we expect consumer benefits to become increasingly customized to meet these needs as people search for solutions that are simple, affordable and help enable quality outcomes. UnitedHealthcare sees strong reception to our expanding suite of highly tailored and affordable individual coverages. This year alone, the number of people we serve with individual health coverage has grown by 15%. Likewise, in employer-sponsored coverage, our growing set of consumer-centered, innovative and flexible offerings such as Bind, All Savers, and traditional line plans such as Harmony in Southern California are gaining traction, with membership in these offerings having grown over 50% this year. You know many of you are interested in the Annual Medicare Advantage enrollment period which opens tomorrow. The 2021 benefit year will be UnitedHealthcare’s largest Medicare Advantage footprint expansion in five years, reaching an additional 3.2 million people in nearly 300 additional counties. We are emphasizing what we know seniors are looking for this year even more than ever, stability and value. Premiums for most people we serve will be flat or reduced and nearly 2.5 million people will have no premium at all. We continue to innovate our product offerings, with all Medicare Advantage plans featuring zero co-pay primary care digital health visits and the expansion of our personal support services, such as an annual clinical health assessment delivered in a senior’s home and for many the assignment of a dedicated UnitedHealthcare navigator. We expect strong growth in individual MA, and when combined with our group Medicare gains, 2021 is shaping up to be another year of market-leading growth. We also expect continued growth in Medicaid due to transitions in coverage and net new market gains and are looking forward to a record RFP season as we seek to serve more people in more geographies. What I have described for you this morning is a sampling of the initiatives we are pursuing today to help lead in the development of the next generation health system, a health system that works better for everyone, those who experience care, those who provide care, and those who pay for care. Now, I will turn it over to Chief Financial Officer, John Rex.

Thank you, Dave. Broadly speaking, third quarter results continued to be impacted by disrupted care patterns, albeit to a much lesser extent than in the second quarter, as many regions of the country stabilize near to more normalized levels. Within the quarter, care deferral impacts were more than offset by the proactive consumer and customer assistance measures we voluntarily undertook earlier this year as well as COVID-19 care and testing costs and broader economic effects. These factors resulted in a 10% year-over-year decline in adjusted earnings per share. As we discussed last quarter, the deepest period of care deferral, which occurred in the second quarter, and the timing of that recognition of our assistance actions built entirely lining up, which makes for a more pronounced adverse impact to earnings in the second half of 2020. The measures we voluntarily undertook mostly impact our benefits businesses and contribute to UnitedHealthcare’s third quarter operating earnings decline from a year ago. In the quarter, we saw total care activity now exceeding 95% of seasonal baseline, with certain categories even more closely approaching normal. This compares to an overall measure of about two-thirds at the lowest point in the second quarter. Each of the three Optum businesses continue to perform well, while accepted in different ways by still recovering care patterns and economic effects. Optum helped third quarter earnings increase 12% year-over-year as fee-for-service practices and ambulatory surgery activity began to recover, while risk-bearing practices still experienced some modest continual effects from deferral of care. Our SCA ambulatory surgery centers operated about 95% of seasonal baseline in the third quarter compared to 55% in the second quarter. Year-to-date, over 1,000 new surgeons have performed procedures at FDA as they seek a safe, convenient and efficient clinical partner. New surgeon affiliations for the nine-month period rose nearly 25% over last year, and we continue to expand the complexity of procedures performed in these settings, having added over 40 new service lines nearly doubling last year. Patients increasingly prefer these three family centers with NPS measured at 92. These durable long-term trends will benefit our growth even more strongly in the future as elective care activity fully normalizes. OptumInsight third quarter earnings increased 24% year-over-year, while the revenue backlog grew by $0.5 billion in the quarter to nearly $20 billion. Payor services and state government businesses performed strongly, while we continue to see lower activity in the provider-facing businesses due to procedural volumes. While still not fully normalized, business development activity has increased from the second quarter’s much lower pacing. OptumRx earnings declined 2% year-over-year in the third quarter as script volumes were impacted by lower care activity and economic factors. Personal scripts, which are correlated to a physician business activity, greatly improved from the second quarter, which was down about 25%, while not yet fully back to prior year levels. Revenues in our expanding pharmacy services businesses have grown nearly 30% year-to-date. Turning to UnitedHealthcare, third quarter operating results reflect a considerable moderation of the care deferral impact experienced in the second quarter, while it’s still not at baseline levels. This was more than offset by our assistance measures, direct COVID-19 care costs and economic factors. The number of people served in commercial products declined primarily due to employer actions. Within this, for us, about 40% of the fee-based decline came from very large employers, primarily in the hospitality, transportation and energy sectors. During the third quarter, growth in Medicaid membership accelerated, benefiting from the continued easing of state re-determination requirements. We have not yet seen material Medicaid enrollment activity due to job losses and historically, these transitions lag loss of healthcare coverage by about six months. Our Medicaid business has seen strong year-to-date organic growth of over 500,000 people. Sales activity in Medicare Advantage has continued to move towards more normalized patterns after seeing some slowing in the second quarter due to the pandemic. Within this, we have seen considerably less plan switching than typical for existing Medicare Advantage enrollees, while selection of MA over fee-for-service for people new to Medicare is tracking well. We continue to deepen our engagement with those seniors most in need, increasing the distribution of remote digital sensor kits to collect and monitor vital health data and address gaps in care generated by the pandemic. Seniors continue to highly value our house call programs, with the number of home visits in the third quarter growing by nearly 30% over last year. Our liquidity and financial position remains strong. Third quarter cash flow is up $3.1 billion or 1x net income reflects the extra federal tax payment in the quarter due to the deferral of payments typically paid in the second quarter. Year-to-date, cash flows from operations are $16.1 billion or 1.2x net earnings, and our debt to total capital ratio of 39.1% compares to 43.7% in the year-ago quarter. As noted earlier, we have updated our full year adjusted earnings outlook to a range of $16.50 to $16.75 per share. This reflects third quarter performance, while anticipating the fourth quarter will reflect continued customer assistance measures, normalization in care patterns and rising acuity as a result of missed and deferred treatments. We will continue to work proactively to help people obtain the care they need. Now, I will turn it back to Dave.

Thank you, John. With the third quarter earnings report, we have at times provided some early soundings on our growth outlook. Even as the current environment is anything but routine, I will still try to offer some useful perspectives. We approach the future with continued conviction on our long-term 13% to 16% earnings growth objective. Some of the factors giving us confidence include our rapidly expanding care delivery services now benefiting from over a decade of building and investing in local value-based care systems and extension into market-leading post-acute home and modern behavioral health intervention services. Our ability to support seniors across multiple channels and markets was increasingly innovative high-value offerings. The way we meet the growing needs of people with highly complex conditions with comprehensive personalized care, including people across commercial, federal and state-based programs. The innovative and consumer response of products is now being offered through the employer and individual market channels. Our unmatched ability to support a more interoperable and intelligent health system as a result of significant investments over many years to improve performance, integrating data analytics and clinical information to provide essential insights to evidence-based next best care actions and our restless drive to allocate capital in line with other innovative companies as we lead in the development of the next generation health system in a socially conscious way. These are just a few of the accelerating capabilities which will enable our enterprise to serve more people, much more deeply as we look to the years ahead. As to early thoughts on 2021, we expect our underlying business performance to be strong and well supportive of our long-term growth objectives, including the tailwinds we have highlighted throughout this morning. The pandemic and related economic impacts, of course, remain difficult to predict and at this distance, likely represents a significant potential headwind. As a result, we envision stepping out initially with a more conservative all-in 2021 starting point to accommodate these still developing and unknown COVID-related impacts in particular the pacing of a return to more normal levels of care services and the condition of the economy. As the environment continues to evolve, we will also continue to evolve our thinking and perspective and it is our custom, we look forward to providing you further perspectives on all aspects of our business at our investor conference on Tuesday, December 1 which will be held virtually this year. Thank you for your time today. Operator, can you please open the line for questions?

We will take our first question from A.J. Rice with Credit Suisse. Please go ahead.

Hi, everybody. Maybe just to pursue a little bit further the comments that Dave just made about thinking about next year, I guess predicting a medical cost trend you have got a lot of moving parts there, potential further deferrals, potential pent-up demand that could come back, cost of vaccines and therapies that could be there, a number of things and thinking about the cost trend for next year, how are you approaching that? How do you see a competitive environment that is changing as a result of that, just maybe flush that old comment about how uncertain the ability to predict the medical cost trend is for next year?

Thank you, A.J., a very thoughtful question. Hopefully, you took away from the prepared remarks that we are optimistic about the performance of our business and that’s pretty much universal across Optum and UnitedHealthcare. We didn’t get into some of the smaller size businesses, but we are optimistic in particular about our relative competitive position and the growth prospects for 2021. But as also indicated, we remain deeply respectful of the environment both the pandemic and related economic consequences. And one thing I would underscore, AJ, is what you had very well, there are a number of moving parts, which are very difficult to predict and you should also know that we are extending our efforts to ensure that our chronic members and patients are getting the care that they need during this unprecedented time and we also still have a strong commitment towards correcting any imbalances that could occur. So, at this instance, we do see our business – underlying business performing strongly and aligned to our long-term growth objectives, which are 13% to 16% per year offset in part by these pandemic-related effects. So the starting point, as we indicated in December, will likely represent a wider range given the possible outcomes and a more conservative all-in expectation than normal that you would normally see from us given all the elements that you just described. So, we are taking that into consideration as we develop our point of view about where our MLR might land, how – what the variability of that might be. We see it generally speaking that whole pandemic related impacts is being an area – a headwind for the organization, but don’t misread it, we are very bullish on the strong underlying growth performance of our business. Thank you. Next question, please.

Okay, fine.

And the next question is from Josh Raskin with Nephron Research. Please go ahead.

Hi, thanks. Good morning. Just a question on OptumCare, I guess and you are seeing big growth in the PMPMs there on the consumers served and I just want to better understand the relative performance sort of 3Q year-over-year versus 2Q kind of what’s driving that increase in revenue per member? And then if you could also talk about sort of physician recruiting and how that’s going over the last 6 months?

Sure, Josh. Great questions and I think you are hitting on one of the strengths of the enterprise and one of the reasons why we are showing growth for next year. Simply said, it would be more market, more deeply penetrated into those markets and a higher percentage of them having a risk-bearing arrangement. But Wyatt, do you want to talk more fully?

Yes, sure. Thanks, Josh, and thank you, Dave. I think, Dave, you captured it well. What we are seeing is as we grow, we not only have increased the number of members we serve to 98 million, but we have increased by 25% the revenue per member and that’s being driven in part by the more extensive services that we would offer somebody through a risk-based arrangement in OptumCare versus the lighter touch that you might see through some of the other businesses within OptumHealth. We expect that trend to continue and frankly are very excited about double-digit growth in our MA risk lives and related fully capitated lives that we serve. Another piece I would say, Josh, around your question about physician recruitment is we have seen continued robust interest in both small tuck-in acquisitions as well as medium and large physician groups who are attracted to both stability, the physician leadership, and the evidence-based approach that we have embraced in OptumCare. Thank you.

Good question, Josh. Thank you. Next question, please.

We are going next to Justin Lake with Wolfe Research. Please go ahead.

Thanks. Good morning. I wanted to circle back to the comments on 2021. First, from a consensus, in and around your 11% range for growth year-over-year wondering if you think this will fall within that range at any point given the breadth of the business?

Justin, we are having a hard time hearing you. If you are on a headset, can you pick up the handset?

Sure. Is this better?

No.

No, okay, hold on.

Okay.

Is that better?

It is. Thank you.

Sorry about that. So, what I wanted to do was circle back to the comments you made on 2021, first consensus earnings growth, I think I am curious to look like it’s targeting around 11% year-over-year, still below your 13 to 16, wondering if you think that might your wider than typical guidance still might include that consensus estimate within the range? And then can you point us to the specific businesses where you are seeing, the potential impact of, call it in a recession concerns, maybe beyond just a typical commercial membership? Thanks.

Fair enough. John?

Good morning, Justin. It’s John Rex here. As Dave pointed out, I think we are quite confident in terms of the underlying growth of the organization as we look towards 2021 and kind of in a normal year, I would think kind of things like even that consensus range at this point would be kind of in a normal zone that one could expect an area that we would think about stepping out with. We are very respectful of the fact however as anything, but a normal year end. We have learned so much every month like I’d tell you during this period over the last six months and in terms of how we operate, how our businesses perform, how we need to respond for the people we serve. And so we have continued to be in a respectful mode in terms of learning more, understanding the situation better and realizing there could be significant impacts in certain businesses as we think about performance. So, we look at it in the world of excluding this world we operate in today with COVID-related impacts, a good zone where it fits, but you should expect that we think that there are potential headwinds within there, whether those are economic headwinds, whether those are factors in terms of what we need to do from a customer assistance perspective and really kind of really the pacing of direct COVID care and treatment costs. So, perhaps a long-winded way of getting asked we are in a mode still of really trying to be responsive to what we are seeing in the environment and evolve our thinking as that environment evolves. And Justin, I don’t think I heard - picked up your second question, if you could repeat that one, it was just hard to hear?

Yes, what I was asking is specifically around the segments that could be impacted and most of all, I know COVID is a potential uncertainty, as a lot of companies are trying to price for that adding a little bit to trend. Is that something that you felt like you did for last year and you are just still being conservative, but you feel like that’s something that’s tough to do in this environment? Thanks.

No, I mean, Justin, this is Dirk McMahon. How are you doing? What I would say is, we are of course going to price to our best estimates of forward trends that’s going to include COVID, but you asked about the economic impact. So as we sat back and we looked at the third quarter, actually, our membership was a little less impacted than we thought it was going to be, because of things like the payroll protection program as well as some furloughs that large employers did. So yes, there will be a little bit of a running problem, but less than what we expected. So from a membership standpoint, we are actually fairly optimistic about how we priced. We continue to look at how our block is priced for 1-1 and as we look at that, we are more than competitive and we monitor that every day.

Thank you, Justin. Great questions. Next question, please.

We are next to Frank Morgan with RBC Capital Markets.

Good morning. John, you mentioned expectation for a decline in plan switching this year in the MA market, just curious did you make any color on why you expect that to be the case? Thanks.

Just to follow-up, I think, what we – one of the things I commented on was actually we are seeing less plan switching to normal actually. And what we are seeing is strong adoption of people new to Medicare coming into Medicare Advantage.

Tim, anything to know?

Yes, Frank. Thanks. Tim Noel. Good morning. Yes, what John alluded to is that what we have seen in the marketplace is a decline in people that are switching from one MA carrier to the next. However, a lot of strength in what we call the chooser market, which are folks that are newly eligible for Medicare or people that are choosing a Medicare Advantage plan compared to other coverage types throughout the course of the year. So, we have seen really good, strong demand in those categories, but the plan switching activity was lighter and in particular, in March and April, it’s come back a little bit throughout the course of the year and actually, we have seen some better activity recently. So, the dynamic in the marketplace as we head into any enrollment period is one where we are trending back to an environment that’s more normal compared to selling season in the past.

Okay, thank you.

Thank you, Frank. Next question, please.

We are next to Ricky Goldwasser with Morgan Stanley. Please go ahead.

Yes. Hi, good morning. Question on the Medicaid side of the enrollment impact from higher unemployment is coming in lower than you expect. When do you expect the impact to peak? How do you think about the balance of going to Medicaid versus exchanges? And then on the Medicaid side, has the pandemic change how states think about transitioning to higher acuity populations to managed care fee-for-service and what type of visibility do you have for Medicaid rates for next year at this point of time?

Pretty much covered the entire landscape, Ricky, well done. We will try to be as responsive as possible on all of that. Tim Spilker is our Chief Executive for Community & State.

Yes. Hey, thanks for the question. And you are definitely hitting on a lot of the factors that we have been tracking. The first step just in terms of enrollment and Dirk mentioned this as is John in his opening comments so far what we have seen just in terms of enrollment gains is really the result of the suspension re-determination through the result of the CARES Act. We really have not yet seen unemployment pull through. And I think that’s reflective of some of the dynamics that we are seeing in the commercial market. And that’s been supported, I think, by a lot of external studies as well. So, we continue to watch this, I think we would expect that unemployment would pull through at some point, especially as the timeframe between lots of coverage increases. As for your second question, just around complex populations, yes, we are actively monitoring states as they explore transitions to managed care. We believe there is a very strong value proposition, especially for complex populations, including those that receive long-term care services and HCBS services. We know based on our experience that managed care can deliver significant value, not just in terms of cost savings, but also in terms of helping individuals remain in their homes, helping people access social services and support. And so we have been working with states and monitoring states activity as they transition. I think we are seeing a very robust RFP pipeline, as Dave mentioned and we are hopeful that many states include long-term care services in complex populations in those. And then finally, I think your last question was on funding and rates, and so just on that one, yes, this is something that we have also been working closely with our state customers on really to ensure that funding is sustainable both now and into 2021, especially considering all of the dynamics in play. States are really taking a rational approach to funding. They are leveraging the appropriate risk management mechanisms, depending on their experience that include risk corridors and MLR structures. They are also benefiting from some of the additional federal funding through the CARES Act. And then of course, just as a reminder, Medicaid funding must be actuarially sound, which our states really do continue to use as a guiding principle. This is certainly an area of focus for us. We have strong relationships with our customers and we feel good about those conversations thus far. And then maybe just the last thing I would say is sustainable funding. And all of this work is really critical as it enables us to invest in programs that really do drive substantial social and health outcomes for our customers as well as for the people that we serve.

So, Ricky, I hope that was responsive, at least responsive enough. Thank you for the thorough question. Next question, please.

And the next question is from Gary Taylor with JPMorgan. Please go ahead.

Hey, good morning. Two-part question just in case I strike out on the first one. I was wondering if you could quantify the consumer and customer assistance how that impacted the MLR this quarter? The second part of the question is just thinking about cost trend heading into 2021. I think by the time this year is all said and done, you might end up being on your core commercial group, cost trend down a couple of hundred basis points at least. So, when you are thinking about your guidance for ‘21, are you thinking it could be a normal cost trend on top of that? Are you thinking deferrals would accelerate it could be 200 basis points or more higher than normal, just interested in your thought process on how you are going to comp what was easier than expected all-in trend for 2020?

Well, I will give you the strike on the first one, because I don’t think we are going to quantify customer and consumer assistance in the quarter. The one thing I would tell you is it’s extensive in particular. This is one of the primary quarters where the Medicare business was offering full co-pay waivers on both primary care and specialist visits. And the reason for that, Gary, is that we were deeply concerned and remain deeply concerned that Medicare consumers access their physicians just as quickly as possible, because they are obviously managing chronic disease and we saw a very nice response to that program so much so that we are extending elements of it into the fourth quarter. So, that’s where our customer assistance will continue. In addition to that, we extended some other programs you probably saw that our $1.5 billion of initial estimate went to $2 billion and in part that was because of additional premium waivers and adjustments that we have made that will extend through the balance of this year and modestly into next as well. So that gives you a color for the kind of the volume, the quantity of things that were going on during that timeframe. And with respect to cost trends in 2021, Dirk you want to take?

Yes, I would say, Gary, this goes back to what Dave said originally, we do consider all of those factors you described. We consider what we expect COVID to do with respect to testing, with respect to treatment, all things that are associated with abatement as well we make an estimate of that. We are trying to make a forecast of when the vaccines would come available. So, all those things are considered as we price our business for next year. I am not going to get into the exact number of basis points associated with each one of those that’s competitive. But I mentioned earlier, we do monitor what’s going on in the market, what we see with ongoing trends in all three of those buckets as well as all of the underlying cost. And we make our best estimate as to where we should land to be competitive for a membership growth standpoint as well as an earnings standpoint. That’s what we do and we have actuaries and we have management teams that are pretty experienced with that.

So, thank you for the question. Gary, next question please.

We are going next to Scott Fidel with Stephens. Please go ahead.

Hi, thanks. Good morning. Just wanted to follow up on Medicare Advantage for 2021 and the comments that David made around industry-leading growth expectations and guess really just a two-part question to this just one, so we do have CMS projecting at least 10% enrollment growth for individual MA for 2021. So, just interested in terms of your commentary in industry-leading growth how you take that into context and whether that would support double-digit enrollment growth in individual MA for 2021? And then just secondly, it sounded like the comments around group MA, it sounded pretty bullish in terms of sales, just interested if you can maybe quantify for us the expected – the group MA lives that so far you think you have added for 2021? Thanks.

Just to clarify, Scott, from at least my standpoint, what I really look at is the number of people served and what our performance will be relative to the market overall. And as has being pretty consistent over time, UnitedHealthcare Medicare and Retirement has outperformed on that metric in particular. What I like about this year in particular is what, not only the group MA component really coming off of what would be a disappointing year in 2020 meaning the 2021 actual policy year, but also the kind of setup for individual MA and continuation with our newly eligible members in their growth. So, that’s the essence of the backdrop of the comment that I made. Tim, do you want to add anything further?

Yes, thanks, Scott. So, selling obviously starts tomorrow for individual Medicare Advantage. We have been marketing our products since the beginning of October, receiving really positive feedback from the broker community about how we are positioned. And once again, as you know, our top priority is providing stability and benefit for the members that we serve. And as they go to market, we are happy to have succeeded in providing that for our members and in fact about 75% of our members will experience improving benefits in 2021 compared to 2020. And then we also made some additional investments and capabilities to support seniors. So given that backdrop, we do feel really good about our positioning to gain share in individual MA, group MA as well as the dual special needs plans to market. We are not going to comment specifically on any point estimate for industry growth, but we really like our positioning from inside of the growth whatever that might be. And today’s comments, we are really excited about our group MA growth for 2021.

Great, thank you, Scott. Next question, please.

And next, we have Robert Jones with Goldman Sachs. Please go ahead.

Great, thanks for the question. I guess maybe just wanted to get your latest thinking on participating in direct contracting next year, obviously, through OptumCare. I was wondering if this would contribute at all to your projections around global cap wise growth or would that be incremental? And then maybe just relatedly, how are you thinking about direct contracting relative to the opportunity obviously around MA on the UHC side? Thanks.

Let’s start with UHC.

Sure. Brian Thompson here. As it relates to Medicare Advantage, as you have known from us for a long time, we have had the enterprise perspective of modernizing fee-for-service, but we are certainly encouraged by any activities like this. We participate in things like bundled payment programs, etc. And I see direct contracting as a positive to try to modernize the overall fee-for-service system in total and why it obviously is looking at direct contracting to going to OptumCare.

Yes, thanks, BT and Robert, thanks for the question. We are very encouraged by every effort to move from fee-for-service to value-based contracting. So use this as a positive trend. The direct contracting proposals are primarily geared towards smaller groups that are in fee-for-service. And we have been in risk-based arrangements for over 10 years. And so while we will embrace this, where it’s appropriate, we have relationships with over 80 payers, and we will expect to see continued double-digit growth of our MA and dual risk lives that we care for. And I don’t anticipate that the direct contracting would be a major factor for us. But again, I don’t mean to say that in any kind of a negative way, it’s a good program, but it’s – we will embrace all vehicles to grow. Thank you.

Thanks for the question, Robert. Next question, please.

We are going next to Sarah James with Piper. Please go ahead. Your line is open.

Thank you. I was hoping if you could give us some context around corporate tax reform looking back to 2018, you sized the benefit around $2 billion wondering where that sits now and if there is a difference between product lines and how we should think about which line benefited on a margin side versus was passed through for pricing changes or other items?

Sarah, good morning. This is John Rex here. So I think if we go back to the former period that you are discussing in corporate tax reform I think there are a number of things that we commented on during that period. And in terms of impacts and if you recall, during that period, we also commented about investments that we are making, as a result, to build for future growth and how we were investing in the businesses for longer term. So that was an element there clearly, since that period, a number of years ago now the company is much, much larger. So you would expect that the kind of that impact is much smaller from an effective tax rate impact than we would have had back in that time. among the other elements that you were talking to incorporate tax reform and impacts, I think it is tough, really to kind of get out ahead of anything in terms of potential impacts, and even how those impact down on specific businesses just because there has not been, we just don’t really don’t want to get ahead in any kind of policy that might be that might be out there. So probably would just leave it at that. Thank you.

Thank you, Sarah. Next question, please.

Next is David Windley with Jefferies. Please go ahead.

Hi, good morning. Thanks for taking my question. And I am interested in I appreciate the comments, several kind of percentage of baseline utilization numbers offered in the prepared remarks. I am curious how that has progressed perhaps through the quarter, for example, by the end of the quarter, were some of those at or above 100%? Are you expecting that to get to above baseline in the fourth quarter and based on your assessments of kind of pent up underutilization and system capacity? How long might you expect that to last and then just a tag on the DCP for the first couple of quarters of the year had been pretty consistent year over year, but at the third quarter is down, a couple days two to three days. I am wondering how that folds into that view of where utilization is going. Thank you.

Alright, David, John Rex, let me answer that I get those. So first of all, let me give you a little more color in terms of what we saw in utilization over the course of the quarter and how it fits to what we are seeing last quarter and so I spoke to kind of baseline exceeding 95% across our businesses as we look at the utilization at this point here, maybe a little color kind of context within that and different categories and how those would trend. I point out if I look at physician services that would be below that baseline, might post kind of outpatient surgery, that kind of the rider kind of in that zone, that baseline and I put in patient above that baseline zone, as we look down to kind of various populations and such maybe a little color commentary in terms of how that trends. So commercial, certainly kind of higher in terms of where we are seeing utilization and where we are seeing against baseline, and government programs services lower. And within that, I would say kind of within the government programs, let’s say, the community state business being the lower element of both and that the way it’s trending. One important element here you saw what you referred to from the commentary we had for our expectations for the fourth quarter and then so among those were that care that has been deferred that we are able to help facilitate that carrying curves and that’s kind of where we are making investments and what we want to see happen here. The other element that we anticipate as we look towards the end of the year is we have been anticipating the rising acuity because of deferred and mistreatment, then we’d see higher acuity population. I tell you we really haven’t seen that yet. Where we see rising acuity on the overall book is it’s because of the COVID-19 cases that come in at a higher acuity level. And so you see a higher acuity on that component. But if you take that component out, we don’t really see it across the full scope of the book of our business at this point. As your – to your comment over in terms – over the course of the quarter what we saw, essentially it was an interesting course in that perspective, because you saw different incidence rates in different parts of the country over the course of the quarter. So, we really monitored that quite closely and you would see as a particular part of the country, you saw infection rates begin to rise, you would see deferral come into that mix. Given our platform across the entire country, we have a viewpoint into that, but you see deferral and then you see it come back in. I think the last thing – place I would just point out is within kind of that baseline that we are talking about and so I said exceeding 95%, I put kind of in the zone of 5 points or so or probably COVID-19 driven in terms of within that mix and that’s inclusive in the baseline we are talking about.

And then DCP?

And DCP, thank you for reminding, so DCP is declining year-over-year, so that is due to the really could be acceleration in provider payments that we took on earlier in the year. So, as we really were trying to get liquidity injected into the healthcare system, we accelerated our payment cycles very, very significantly and that continues. The reason you wouldn’t have seen that in the second quarter is because of the very significant deferral of medical care in the second quarter. So, that’s kind of getting into the math of it, right. We get a denominator here, where medical cost per day was declining very, very significantly in the second quarter, so that more than offset the impact of those payments. As we saw care being restored much closer to normal levels this quarter, then that comes up and so now you are seeing the impact of that accelerated payment cycle show up in our DCP, but that was impacting.

Okay, thank you.

And just to remind you, to give you a sense of that, as we indicated in the prepared remarks as well as around the $2 billion advance to the market or acceleration in payment. Thank you, David. Next question, please.

And next is Charles Rhyee with Cowen. Please go ahead.

Yes, hey, thanks for getting the question. Maybe if I could follow-up on that about utilization and then tie it back to sort of your comments around the outlook for ‘21. If it sounds like in-patient volume is a little bit above normal, others of areas are a little bit below and overall, let’s say we are kind of getting back to a normal baseline utilization, given that kind of pace that we are on this year and then we think about next year, what is it in your thinking that makes you think that we are going to see a really big uptick in utilization, because it sounds like when we go back to the earlier part of the Q&A when you are – in your comments, Dave and John at the end was next year you are thinking about a more conservative starting point to think about the ‘21 outlook and I understand that we would want to backup some of the one-time items that were positive for this year. But maybe help us understand a little bit what is your underlying assumptions for utilization, because it seems to me, the pace that we are going at, it doesn’t strike me that we are going to really have really over utilization per se next year, maybe help us understand what maybe you are seeing here as we are now into part of the fourth quarter that kind of gives you that sense?

Yes. So, my comments are really grounded in the unprecedented uncertainty as we look forward and the deep respect for the pandemic and its impact on the economic climate. And that’s why as you think about being at this distance stepping out recognizing that as you are – as the kind of the future expectation, you would normally widen your range and you would probably take a more conservative posture. And that’s essentially what we were trying to communicate. And John, do you have anything further to add?

No. Like, sort of the one thing in your comment and I think you said kind of we have seen in-patient kind of above normal, I wouldn’t say that’s where we are. I said on that exceeding 95% baseline, I was orienting those categories around how they orient around that exceeding 95%, but in-patient rides a little above that position below that and outpatient surgery is kind of right in that zone. So, that’s more the commentary that I was providing there not that in-patient is running above baseline yet. But we certainly categories are progressing to that. And I think it goes in terms of your broader commentary into what to expect for utilization. So, we want to make sure people get the care they need. That’s why we are here ultimately. And so we are going to do everything in our power to make sure that that care occurs. But you heard some of the commentary we offered earlier in the year even in terms of what was going on different categories in terms of cancer diagnoses, different areas that were off significantly, obviously that’s not kind of good for people, that’s not good for the system, we want to make sure that we are that, that care is getting delivered. And there are areas of care that we are going to be very proactive in making sure that people are able to access that. In our business, we have both direct access in the OptumCare businesses. UnitedHealthcare is being very proactive in its outreach to vulnerable populations and making sure that they are getting the treatment that they need. So, our ambition is to make sure that care is delivered as there is much – there is a lot of necessary care that’s not happening also. But, I would come back today’s commentary, as we look out to 2021 and some of the earlier things of we have been learning stuff all along the way over the past many months and we continue to evolve that thinking and continue to feel like we get better perspectives, and why deeply respectful in terms of, we don’t really know how this moves over the next several months also. So, I think that’s what you hear in terms of our commentary in terms of how we think, why we think, how we think about stepping out and why that we want to be respectful of environment frankly that no one has navigated before. And I think that’s just what you would expect us to the way you would expect us to approach it. Thank you.

And we will take the next 30, 45 days or so to accumulate more facts, understand even better and then lay all this out for you in more detail to the best of our ability. I want to get together on December 1. We have time for one more question with quick question and answer. And then I will close. Next question.

And we will take the question from Lance Wilkes with Bernstein. Please go ahead.

Yes, just wanted to ask them for employer enrollment, how is that progressing in October and what’s your outlook for 4Q and beyond? And if you can give any clarification in OptumRx on kind of the real sharp increase in revenue per script and some other compression in margin, that would be helpful, too? Thanks.

Hey, Lance. I don’t think we will be able to give you insights into October in the quarter specifically, but what we can give you insights into is what’s the progresses we are making across the board in the commercial market going forward. I will give you some sense of that without quantifying it. Dirk?

Yes. I would say that, as you think about the fourth quarter, the sense should be is there is a good amount of stickiness with respect to the end of this year in terms of persistency that we are seeing with our groups. And further, I think as we look at next year, I think we talked about in the script, we will have a lot of good products coming off the assembly line that we are very enthused about. All Savers are level-funded product, find a good product, which basically is a scenario where you have a kind of a base level of courage and you buy out for cares meeting in certain categories, then we have, what I would say, a bunch of provider-centric products where we are looking at really efficient, high-quality networks and having low consumer out-of-pockets associated with those. So, what I would say is we are optimistic about our product portfolio for next year as you look at the third quarter – the fourth quarter specifically. We have had good stickiness in terms of our persistency.

Yes, I think the commercial business is doing a nice job. Obviously, we are very dissatisfied with the start of this year, but I think they have come on stronger as the year has progressed with a wider array of product choices and offerings, but also getting their cost structures in line and being able to reflect that in a more competitive price position in the market overall, again appropriately indexed the forward view of cost plus margin, which reflects the variability of the future marketplace. John, do you want to touch on?

Sure, Lance, John Prince. Talking about the revenue growth, we have had really strong growth in our specialty business as well as infusion, our community pharmacies which is a general one. That has been a big driver as well as our external client wins we had on the beginning of the year if you look at our services businesses such as those services as I mentioned we are going on the 30% inside that so really strong growth in that in terms of our margin and why its declined, year-over-year, it is really two factors, one, on earnings side of the impact of COVID-19. As we know with the pandemic, we have had less engagement in Q2 that continued in Q3, as well, as we have seen in Q3, less utilization per member as well as some loss and unemployment. So that is the impact of our earnings. And on the denominator side, the retail co-payment, which was added to revenue in 2020, was added to the denominator which actually impacted the margin in Q3. Overall, we are quite pleased with our margin performance, as you see, between Q2 and Q3 earnings grew sequentially by 16%, as well as in commitment to a group of margins. So overall, we are seeing we are exiting very well.

Perfect. Thank you, John. Thank you, Lance. And thanks to all of you for your interest in the very thoughtful, insightful questions that you offered today. As this is an unprecedented time in our company’s history. As you have come to expect, we will continue to respond and lead with full strength compassion and fortitude, restlessness for serving the unique needs of every one of the 140 million people we serve around the world. Despite the challenging times, the 325,000 people in the UnitedHealth Group are deeply committed and are energized about our work to advance the next generation health system in a socially conscious way it is a health system that will be universal, affordable, simple and effective. And we look forward to engaging you in several weeks at our upcoming annual investor conference on Tuesday, December 1 we see the virtual format as an opportunity to provide you an even deeper view of our company with strategic plans, its people and our future. Thank you very much.

And this will conclude today’s program. Thanks for your participation. You may now disconnect and have a great day.