Good afternoon. My name is Regina and I will be your conference operator today. At this time, I would like to welcome everyone to Oscar Health’s 2022 Fourth Quarter and Full Year Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. [Operator Instructions] I would now like to turn it over to Cornelia Miller, Vice President of Corporate Development and Investor Relations, to begin the conference.

Thank you, Regina, and good evening, everyone. Thank you for joining us for our fourth quarter and year-end 2022 earnings call, where we’ll discuss our execution against our annual plan, our expectations around InsuranceCo profitability, and our path to total co-profitability. Mario Schlosser, Oscar’s Co-Founder and Chief Executive Officer; and Sid Sankaran, Oscar’s Chief Financial Officer will host this afternoon’s call, which can also be accessed through our Investor Relations website at ir.hioscar.com. 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 the Safe Harbor provisions under the Private Securities Litigation Reform Act of 1995. 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 September 30, 2022 filed with the SEC and our other filings with the SEC, including our Annual Report on Form 10-K 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 fourth quarter 2022 press release, which is available on the company’s IR website. With that, I would like to turn the call over to our CEO, Mario Schlosser.

Thank you, Cornelia. Good evening, everyone, and thank you for joining the call today. Before we get to fourth quarter and full year 2022 results, I would like to provide some context on our story to dates. For the past five years, we have seen a 75% compound annual growth rate for Direct and Assumed Policy Premiums. We have improved the medical loss ratio by approximately 12 points since 2017. Our Net Promoter Score has increased more than 20 points with the same time periods. Our members were the first to get access to free virtual urgent care. Our $3 drug list has made medications more affordable for them and our $0 virtual primary care medical group has been helping more of our members get importance preventative care. Fast forwards to today, the fourth quarter capped off a transformative year for the company. We have talked about how – we have talked a lot about how 2022 was a year of monumental growth for the business. We nearly doubled membership and crossed the 1 million member milestone and while that is impressive, what’s more impressive for us is how we managed that growth. We knew that heading into 2022, the step change in membership required us to put all of our focus on operating at scale and that our technology, our operations, our people, would be under pressure to deliver our target at MLR and expense ratios. To meet these challenges, we organize the company around three key objectives, medical cost management, sculpting the portfolio and admin cost management. As our year end results show, we were able to execute against the plan, we set out for the business in these areas and we applied our learnings gathered throughout the year to position the company for profitability. Let’s first take…

Thanks, Mario, and good evening, everyone. It’s great to be back and I’ve enjoyed reconnecting with all of you again. Our full year 2022 results were largely consistent with our expectations and guidance range. We believe last year’s performance offers a solid baseline for our 2023 targets, which I’ll discuss in greater detail in a few moments. Turning to the results, we ended the year with nearly 1.2 million members, reflecting growth of 93% year-on-year. A robust membership growth also drove a direct and assumed policy premium significantly higher. Full year direct and assumed policy premiums increased 99% to $6.8 billion driven by membership, mix shifts to higher premium plans, rate increases as well as improved lapse rates and higher SEP growth rates in the second half of 2022. Even with our sizable membership growth, our 2022 medical loss ratio improved 360 basis points year-on-year to 85.3%, primarily driven by lower COVID costs, mix and pricing, as well as execution on our total cost of care program. Excluding negative prior year development of $28 million in the calendar year, the MLR would’ve been 84.8%. Our fourth quarter MLR of 91.6% improved 630 basis points year-on-year, largely driven by the same factors as the annual MLR. However, the quarter includes $13 million of favorable intra-year development driven by favorable reserving trends relative to our pricing assumptions, partially offset by more cautious view on 2022 risk adjustment given our growth. Overall, claims trends have been favorable in total with inpatient and professional utilization coming in better than expected offset in part by higher RX spend than projected. Switching to our admin costs, our InsureCo administrative expense ratio improved 125 basis points year-on-year to 20.6%, driven by operating leverage benefits and admin efficiencies from our enhanced scale, partially offset by higher distribution expenses.…

[Indiscernible] data so I will close out with some very simple thoughts. The risk equation for a company has changed dramatically towards the positive. We are projecting full company profitability next year and we expect we will have enough cash to get us there. We’ve done the work to bring down our medical loss ratio in line with other industry incumbents. Our admin costs are coming down in line with our plan. We took on membership this year at a sustainable margins that set us up for the future. We have a differentiated products in the fastest growing insurance markets in the country and remains attractive to brokers and members alike. Having our own infrastructure that has proven scalable and being clearly advantaged in our ability to engage with members, those are massive differentiators. We are builders and I find it personally very exciting to continue to build on top of this infrastructure. There is ample runway to get even more automated and efficient and that is where we will continue to focus in the coming year. So the 2023 plan is straightforward. We know what needs to be done, we simply need to continue on the path that we are on. Before I close, I’d like to thank the Oscar employees who’ve been so committed to building on the momentum of the past few years. We have great ambition and an even greater team. And with that, let’s turn over to the operator for the Q&A portion of the call.

[Operator Instructions] Our first question will come from the line of Michael Ha with Morgan Stanley. Please go ahead.

Hi, thank you. So I understand this year you’re targeting lower distribution expenses and vendor savings from increased scale. And I think you have mentioned majority of these savings were already achieved and now you’re focused on further efficiencies. I was wondering if you could talk about what these efficiencies are? How that could yield additional savings and whether that presents opportunity for upside to earnings? And also on Health First, I think you mentioned incurring a modest amount of transition related costs. How should we think about the magnitude of those stranded costs?

Yes, Michael. Let me take the first question and then Sid you can talk about the second part of the question. I will point you back to the three levers we tackled in 2022 across admin, medical cost managements and portfolio sculpting in all three of these, we have more, I think, way more room to go. Start with the admin side, we renegotiated things like chart collection vendor contracts pretty much every medical management vendor we have contracts there, PBM vendor, things like that. Where the additional savings lie in the future is in my view a lot in further automation really across our claims operation, across eligibility and billing operation, across the killing [ph] operation. These are now nicely scaled and I think we know what we’re doing in these now, both from point of view of whether any errors occur or any other issues happen there. But also from the point of view of how sort of front footed we can be on these and across the Board there, we can still do more scale – as we scale the future and high membership growth, this is automating more of these types of conversations. An example last year on the customer service sites and we’re sending a lot more conversations through this automated systems that can ping directly into our real-time systems, whether it’s about eligibility, claims status, things like that, supporting the provider service and customer service sites. Sid, maybe on the second question transition costs.

Yes. Sure. Thanks, Michael. Appreciate the question. Really with respect to the runoff expenses, there is some modest expenses performing runoff services in 2023. We wouldn’t expect them to occur in 2024 and we really wouldn’t comment beyond that.

Got it. Thank you. And if I could squeeze one more in, if I’m not mistaken, I think Florida’s one of the most capital in central states. I think the statutory cap requirements are something like 25% for the first five years, but I believe Oscar first enter Florida back in 2019. So presumably you’d be nearing the end of that, so you might get a decent chunk with cash back. I was wondering is that true? And if so, what would the timeline be on receiving that cash and would your statutory capital requirements drop to 10% or 15% thereafter? Thank you.

Well, Michael, again, thank you for that. It’s a great question. Yes. Your read of the statutory regulations is consistent with ours and those startup seasoning requirements would effectively run through the end of this year. Beyond that, I mean we think as Mario said, we have a lot of potential for the company growing organically becoming more capital efficient in some of our structures. And so we’d of course evaluate that, but I think you’re absolutely right to call out that, that we would see that as an upside potentially.

Our next question will come from the line of Jonathan Yong with Credit Suisse. Please go ahead.

Hey, thanks for taking my question. I just want to hit on redeterminations and how you’re thinking about the risk pool of the members that you may end up recaption. Do you have an assumption of how many members you think that you will actually gain from redeterminations and kind of how are you thinking about their MLR coming on to your books later in the year? Thanks.

Yes, Jonathan, maybe I’ll take the first part, Sid, if you want to add anything feel free. So two levers there of course. One is premium growth, the other one is medical costs. Overall on both of these, we have made assumptions around redeterminations in the estimates in pricing and also in the guidance for 2023. I would not call the material to either premiums – neither premiums nor medical loss ratio. Generally, I would say in anything that increases the ACA market size is a great thing. We’ll have side effects in making the market even more stable and attractive and so on. So I think long-term this is clearly a great thing. When it comes to growth, we expect like everybody else obviously needs to start in April. It is still not quite clear over what timeframe they will come in. The states have not given clear guidance. Some states will go population based, others time based. When we look at when those members rolled into the Medicaid roles, actually quite linear, I would say over each month of the year. So we won’t see potentially any kind of bulk coming in any particular month there, but Texas has said they think it’s going to happen in six months to nine months and Florida said it’s going to happen in 12 months. So quite differently in terms of what we could expect in different states there. In Florida as Sid said, we don’t expect to participate in this in the first six months of the year because the membership and limitation for brains in place until then. And so when we then have participates on the medical loss ratio sides, we share what others have seemed to pick up on the market, which is that the acuity these numbers will likely be higher than the risks that’s already in the ACA. And clearly, members who come in special enrollments as we know have the headwind of partially risk adjustments. But they come with as well. As we talk about in the past, and we’ve reaffirmed this again throughout the 2022 results, members who get in special enrollments, you’ll come with that sort of MLR penalty then do look like pretty much everybody else in the year after that. So again, long-term great for the markets, short-term with MLR headwinds, but I’ll close out by saying both on the growth sides and on the MLR sides quite likely – quite immaterial to the projections for 2023 for us.

Okay. Great. And then just on some of the automation that you were talking about in order to improve your operating efficiency, would that require any further investments on that would be needed for 2023 or does your current capital planning account for all that and there’s no need for extra investments? Thanks.

No extra investments, really our current capital planning is based on us essentially following the plan we laid out and everything Sid talked about in terms of base case cash plan InsureCo profitability 23, total profitability 24 is all very consistent with us. And so we really expect in fact to be at the tail end of a whole bunch of multi-year investments. For example, the claim system we’ve been building internally it’s really kind of the last sort of component still being fine tunes essentially at the end of the investment cycle there. And that to us is very exciting because that system is the one that’s already answering. We have some questions on eligibility and claims and stuff like that and various provider facing and member facing service lines and look more automation. I think we can get in all of these aspects.

Thanks.

Your next question comes from the line of Gary Taylor with Cowen. Please go ahead.

Hi, good evening. Couple questions. First one I just wanted to start with if you could tell us, I mean, where do you see enrollment landing at 1Q and year-end? I didn’t see any enrollment guidance in the release.

Yes, Sid.

Yes, I think we obviously haven’t explicitly called that out in the guidance. I think with respect to membership, I think we have highlighted that we expect membership to be roughly stable year-on-year. We are importantly to point you to this, we are projecting lower overall SEP members, as a portion of the overall book. And as a reminder, that will result in lower member months year-on-year, but as a positive tailwind to the MLR, I think Mario commented nicely on Medicaid redeterminations. So the net-net of all of that as it flows through to premiums is, we’ll have slightly different member month dynamics than we’ve seen and that’s what’s really driving the Direct and Assumed Premiums down modestly year-over-year.

But should we think – should we be thinking that the business has some normal attrition from the first quarter through the year, would redetermination sort of backfill that and enrollments more stable? Does that make sense?

Yes. I mean if you think of the business there, there is some normal course churn in the book, which is effectively lapses offset by initiations. One of the key points we’re just calling out here is we’d expect new initiations in year to be lower than they would’ve been historically because SCP will be a smaller proportion of the book this year.

Yes, we generally see that whatever market share trends, we have an open enrollments flow through the special enrollment as well, and that’s how we set up the guides.

And then my second one was just go into risk adjustment. I agree. I think to be honest, doubling your enrollment premium year-over-year and bringing MLR down here on a basis point is actually really great performance to be proud of for sure. If when we do that, final settlement of the risk adjustment next June, what you’ve accrued there proves to be sound. And I know you’d suggested just a little more conservatism and the figure you’ve booked in the 4Qs. I just wanted to give you a chance just to address where you think you’re at for year-end and how that will settle up in June.

Yes. Well, I mean I think Gary, your highlighting key point obviously the final date will be out in June and we’ll be able to make final judgments at that point. I think given the dynamics in the marketplace, we just thought it would be prudent to be cautious. I think in particular in the second half of the year, you saw certain carrier exits in certain markets, including in Florida. And so given that we thought it would be prudent to overlay some judgment to be a little more cautious on risk adjustment than we might have been in years prior. But we always are open and flagging that that’s a risk. And so we think we’ve been thoughtful about it.

One more quick if I could, what was 2022 InsureCo EBITDA under the definition you’re using going forward?

Yes. I think at this point, just for accounting purposes, we haven’t disclosed that, but as we think about financial disclosures going forward, I think we’ll think about what could be helpful to analysts and investors there and come back to you. I think you had a good line of sight into the holding company, so what I would tell you is if you’re trying to come up with that estimation, think about the holding company costs are and you’re effectively reverse engineering that out.

Yes. All right. Thank you.

Your next question comes from the line of Kevin Fischbeck with Bank of America. Please go ahead.

Great. Thanks. I just wanted to make sure I understood what you were trying to say about investment income. It sounds like that’s a bigger tailwind than you thought it was going to be. Is that – are you saying that that’s part of how you’re getting to breakeven this year? Or like even excluding that you would’ve been comfortable with the breakeven dynamic or is that always part of the calculus, it’s just something you think the Street didn’t catch onto?

Well, I think I’d reiterate a couple of points. As we think about our core underwriting profit, we’re targeting combined ratio less than a 100. So at the core, that’s what we really want to use as the metric to measure the business. We were making a second subtle point is obviously externally analyst investors try and do pure comparisons of ultimately gross margins, net margins and how that compares to peers. Our investment income over the years, given are being a startup has been effectively been de minimis while our competitors have effectively had 3% investment yields. So now the interest rates have in some ways normalized, you’re now going to be able to include investment income in your model for Oscar, similar to what you would use at other competitors. And we’ve given you a little bit of an indication. We think that’ll be about 3.5% this year in our base case, anywhere from 3% to 4%. And so that’s obviously structurally with the ability to extend duration and look more like other – what I would call normal insurance companies, I think that is a great kind of normalizer for us now when we look at our results versus other people in this guidance.

All right. Great. And then I guess you guys mentioned a $20 million size for the exchanges over time. That’s a still a pretty big growth rate from where we are this year. But this year membership is flat when the industry grew quite well because of all the actions you mentioned earlier. Are we done with those actions? Should we start to think about you guys growing in line or faster than the industry or to make that transition to the final profitability? Are there still things we should think about that say, yes, you won’t grow quite as fast as the industry for another year or two?

Hey Kevin, so you thought say once we have a long-term goal for growth and we’re not moving away from that. So I mean I think that there is a lot of growth power stored up in the company. That would’ve even come through more in last of enrollment, have you not taken some of the actions we talked about. I think the overall market will have the savings we talked about as well, and I really do think that that’s our long-term growth target would mean – we would outgrow the markets and that’s – that’ll continue to be our goal. And we are already in the process of thinking through and actually working through and things like service area expansions for next year. So we’ll – we’re back in the playbook essentially of figuring out where we can best grow with the best unit costs with the best responsible sustainable margin profile because we’re not going to go back to prior years of margin profiles we can sustain in. That’s for sure. And as Sid talked about, we also still have a good amount of regulatory reserve capital against, which we can grow in the various places we’re in. And so that certainly feels like something we’re going to tackle for next year. On top of that, in terms of the other thing I’ve mentioned is that’s in I would not excludes continue to work on portfolios sculpting. If they are areas we are in where it’s not working, where we don’t see ourselves filling sustainable business, then we’ll continue to look at those, give those a hard look and see if we want to continue to be in those. But of course, that’s a high bar because generally I think we’ve now really builts and very good local model of growth, happy members, happy brokers and providers who work with us closely.

Our next question will come from the line of Josh Raskin with Nephron Research. Please go ahead.

Hi, thanks. Good evening. Appreciate taking the question. Midpoint of MLR guidance of 83, call it down 230-ish basis points year-over-year. How much of that is reflective of pricing actions that you took and how much of that is medical management techniques to improve relative to overall trend? And I kind of asked that question in light of needing to sort of turn off or cap the membership in Florida, just to make sure there’s no sort of mismatch there.

Yes. I think, Josh, nice to hear from you. I’ll take that one. I don’t think there’s any mismatch there to use your words. I mean, obviously, I think Mario highlighted, rate increases in the high single digits, which we view in excess of trend very disciplined, I would say, pricing across our markets is – was certainly a key element of the business plan. We were trading off frankly, profitability for growth this year, which was the biggest consideration. And I think secondly, I think there’s real dollars embedded in the MLR savings such as the PBM contract I mentioned. We’re renegotiating along with that rate increase above trend. That is really pushing us to where we want to be on the MLR side.

Got you. Got you. And then it looks like guidance implies about $195 million of corporate costs or sort of parent level overhead. What was that number in 2022 and how should we be thinking about that sort of after 2023?

Yes. I think the first point, this answer won’t surprise to you is down. Surely, as we look at that I think that we’re very focused on expense management when you begin to start decomposing us versus peers. I think if you look at Oscar now relative to competitors, I think folks have to acknowledge the really meaningful progress we’ve made on MLR, and that’s why I appreciate some of the comments and questions today. Clearly, what you’ve heard from Mario and myself and certainly the rest of the management team with Scott and Alessa, and we are absolutely focused on that cost line, and I think you should expect us to continue to get better operating leverage out of our cost base as you model the company forward.

And I can’t believe we made it to this, probably towards the end of the call without utilization question on the existing quarter. MLR came in a little bit better than we were looking for. I don’t know if there were any, I heard the development prior period reserve development relating to the current year. But anything other – anything else you would point out in terms of MLR trend for the quarter?

Nothing in particular for the quarter. I think as we look at the year that the inpatient professional utilization, as I mentioned, came in better than expected. RX savings was came in for the year higher than we had anticipated in price for. So there’s been a lot of focus on our total cost of care around PBM and drug spend, which is why we’ve highlighted this other element of our renegotiating PBM contract, which we think is a nice tailwind for our results as we go forward.

Our next question will cut from the line of Nathan Rich with Goldman Sachs. Please go ahead.

Great, thanks for the questions. Maybe first just building on the MLR comments from the last question. I’d just be curious to get your view longer term where you think MLR needs to be to kind of reach the profitability path that you laid out for the business. And I guess as you look to potentially return to growth, would you kind of expect to keep MLR either in the range of the 10 or continue to improve it while also growing membership?

Yes, I think as we sit here today, first off, I think we’re proud of all the progress that we’ve made with respect to MLR really as we look forward we would want to be targeting in below 80s. What are the implications for the business? Certainly that means as we look at 2024, there’s still more work to do on pricing for some margin expansion. And then again, our total cost of care savings program, I think has generated real benefits as we work with our actuaries. And so a big chunk of the resources and kind of human capital company is really focused there on all the components of better medical cost management. Now, sometimes that bit may sound unsexy to you, but it’s the meat and potatoes blocking and tackling of running a managed care company. And I think the team is entirely focused on that and that’s why we’re confident we think we can get there.

Yes, I think that – it’s just – we’ve been this market now for the longest really of almost anybody else in this market, and it’s quite clear that’s purely leading with price. When you don’t have the unit cost, you don’t have the management and so on does not work. We’re not going to go back to those days, certainly from a pricing perspective, and don’t think the market will either, by the way. So for us, this is a matter of in which markets can we build networks and providers who will over time share risk with us. We can build the modes around longer retention, longer 10-year members who will want to be with those providers. And in those markets, I think we have a huge amount of growth potential still. And so therefore, MLR wise low-80s and not going back to the previous days of trying to somehow win on the price side there.

Great. And I just wanted to ask a quick follow-up if I could, I think following up on Gary’s questions on the risk adjustment payable. I guess, with the slower growth that you – within the business this year, I guess, would you expect to be in a receivable position for the current year? And I guess, when do you kind of feel like you’d get better visibility on that?

Well, we wouldn’t anticipate being in a receivable position, but we would assume that the payable would be coming down modestly as we look forward. And risk adjustment is a pretty big focus area for us, given the nature of our membership and demographics are pretty similar, I mean, to point you to an important comment that may have been lost in our prepare remarks, which is this is really the first time that Oscar has had this level of stability in its membership. And so we know the membership population, we have strong data on that population. And so we actually think that’s beneficial from the perspective reducing volatility.

Yes. And maybe as another piece of data there. Our silver mix is larger, this in the– as Sid mentioned, it’s sort of in the 60s, right? And that’s by itself likely means that we’re just not going to be a receiver from the pool, but a payer into the pool, because it’s still a little bit different than other market participants there. And we’ve been moving it to the right direction. We’ve priced some great – I think plans and other metal tiers as well that work well. But that means we likely have lower claims for than others, but higher RA payouts and are comfortable with that as long as you manage the RA well in which I think we at this point do.

Thank you.

Our final question will come from the line of Stephen Baxter with Wells Fargo. Please go ahead.

Hey, thanks. Had a couple of questions about the broader exchange market I was hoping to get some insight into. So obviously you guys are not growing your membership this year or very intentional decision. The market as a whole, especially, key states like Florida are seeing really significant strong growth again in 2023. I guess, first we’d like to get a sense of how you guys think about potential changes or maybe improvement to the risk pool and whether anything like that has been considered in the MLR outlook you provided today. And secondly let’s just get your perspective on maybe Florida as a whole, like, it looks like the growth there has gotten to the point that I think around 13% or 14% of the state population has signed up for the exchanges. And at the national level, I think that’s more like a 4% or 5% number. So just love to get a sense of what you think is happening in Florida and whether that potentially could be more like what other states look like over time. Thanks.

Yes, Steve, great question. So the – on the growth side generally, I think, we – Florida, let me start with actually the Florida side of things. So Florida is a very simple answer. It is the population in the state I think is conducive to being in the ACA, right? We have, at this point, I think about 40% of our welcome kits that go out, go out in Spanish, so a fair bit of immigration population and so on that that’s, we want to go into the ACA, but even the bigger driver is a very, very active broker base. And so Florida is almost unique in that regard. I mean, some of the same brokers and general agents we work with – have been working with very closely for the past couple of years have now made their way to Georgia and other states as well. But those brokers have been incredibly effective at finding folks who should get coverage. And I think the latest statistics are that’s something like, actually, I’m going to put through this now. But some large percentage of uninsured people in the U.S. could get effectively still free healthcare in the ACA. And so that I think is a population that you have not seen sign up in other states where people – where they haven’t been told that by a broker that they could get that. And those folks are in the markets in Florida. I think that’s happening in the states there. Going forward, in all of the ways you point out still plenty of growth. I mentioned this briefly before, we continue to see interesting dynamics in the individual coverage HRA space. It’s again, kind of some of the Florida brokers and general agents who are saying, hey, I’m able to turn companies over into defined contribution type health plans, which is individualizing in the ACA. And to us, that could be a whole another growth wave that we’re very excited about going forward.

Thanks. I think could you just touch on maybe how you guys are thinking about the risk pool dynamics as the market continues to grow in 2023 kind of put in the redetermination piece aside.

Yes, sorry, I forgot about that one. So generally what you see in the ACA is that if you’ve had more growth, it tended to bring down the average risk score. Now there is clearly risk score trends in the market, meaning every year all insurance companies tend to get better at collecting risk scores and recapture rates and things like that, right? So you sort of always have written that in that race of making sure you don’t fall behind the year. And we’re very aware of that. But generally, the risk pool has comes down if – when the pool expands. And I would think that that’s would again, have happened coming into this year. We did not make big assumptions around this. And so partly because we didn’t want to be too, again, exposed in terms of whatever happens in SEP. And I could see a situation where SEP members coming in drive the pool up, but then the more recent growth has driven it down. So that’s kind of our overall about the same. But as I mentioned before, and I’ll just briefly say it again, from a metal mix perspective and also from an average age perspective actually, we have about the same population as before. And so to us that generally means there isn’t anything there that we will be somehow too concerned with getting the risk pool will run us versus the overall markets. But obviously these are all the things we’re watching and there’s the same weekly report coming out. We’re always sitting there and cheering when it comes in the way we expect. And I’m looking forward to the next time that will happen.

Okay, thanks. And then just one super quick follow-up, hopefully. Just on the PBM contract, like, it sounded like you are renegotiating or it already has been done, I just am trying to clarify whether we should think about there’s an impact beyond 2023 that we should be considering or is the impact fully captured in the 2023 guide that you provided? Thanks.

Yes, thank you, Steve, it’s great question. And it’s – I think we’ve always talked about this about the benefits of the increased scale. And so, yes, we are in the final, final steps of renegotiating that PBM contract and it’s structured in a fashion that will provide us benefits in 2023 and beyond. So think of it as multiyear.

Yes. I think for us this was a good example of – we’ve reached a certain level of scale now that enables us to take these kind of steps that maybe at lower scale wouldn’t have been the case. And that’s something we intend to also press on going forward.

We have no further questions at this time. Ladies and gentlemen, that will conclude today’s meeting. Thank you all for joining. You may now disconnect.