eHealth, Inc.

Hello, everyone. Thank you for joining us and welcome to the Q2 2026 eHealth, Inc. Earnings Conference Call. After today's prepared remarks, we will host a question and answer session. If you would like to ask a question, please press star 1 to raise your hand. To withdraw your question, press star 1 again. I will now hand the conference over to Eli Newbrun-Mintz, Senior Manager of Investor Relations. Eli, please go ahead.

Good afternoon and thank you all for joining us. On the call today, Derrick Duke, eHealth's Chief Executive Officer, and John Dolan, Chief Financial Officer, will discuss our second quarter 2026 financial results. Following these prepared remarks, we will open the line for a Q&A session with industry analysts. As a reminder, this call is being recorded and webcast from the investor relations section of our website. A replay of the call will be available on our website later today. Today's press release, our historical financial news releases, and our filings with the SEC are also available on our investor relations site. We will be making forward looking statements on this call about certain matters that are based upon management's current beliefs and expectations relating to future events impacting the company and our future financial or operating performance. Forward-looking statements on this call represent eHealth's views as of today, and actual results could differ materially. We undertake no obligation to publicly address or update any forward-looking statements except as required by law. The forward-looking statements we will be making during this call are subject to a number of uncertainties and risks, including but not limited to those described in today's press release, and in our most recent annual report on Form 10-K and our subsequent filings with the SEC. We will also be discussing certain non-GAAP financial measures on this call. Management's definitions of these non-GAAP measures and reconciliation to the most directly comparable GAAP financial measures are included in today's press release. With that, I will turn the call over to Derrick Duke.

Good afternoon and thank you for joining us today. Our second quarter results reflect the deliberate choices we made going into 2026. We entered the year with a strategy centered on three priorities. Building our lifetime advisory model, materially improving our cash flow profile, and making targeted investments in long-term growth opportunities such as ICHRA. Second quarter revenue was $33.6 million. Gap net loss was $23.6 million. and adjusted EBITDA was a negative $21.8 million. Operating cash flow for the first six months was $30.8 million. Overall, these results were in line to slightly above our expectations. More importantly, we remain on track to achieve our key financial objectives for the year, including our cost savings targets and significant operating cash flow improvement compared to 2025. For the first six months of the year, non-GAAP operating expenses declined by $42 million compared to the prior year. We are creating a leaner operating model while preserving our key strategic capabilities and pursuing initiatives that we believe will drive long term shareholder value. We continue to project annual variable cost savings of more than $60 million and fixed cost savings of approximately $30 million. Before discussing our operational progress, I'd like to spend a few minutes on the broader market environment. Despite recent disruption, the long-term opportunity in Medicare Advantage remains compelling. Medicare Advantage enrollment has now reached more than 35.5 million beneficiaries. While growth is moderated compared to prior years as carriers focus more heavily on profitability, The underlying demographic drivers supporting the market remain firmly intact. We continue to see strong demand from seniors with beneficiaries who are just turning 65, selecting Medicare Advantage at disproportionately high rates. Longer term, the Congressional Budget Office projects MA penetration to increase from approximately 55% today to 63% by 2034. After more than two years of disruption, we believe the industry is now gradually moving towards greater stability. We have begun discussions with our carrier partners ahead of the upcoming annual enrollment period, and several of those conversations corroborate this view. In June, CMS finalized the maximum broker commission increase at 4.5% for plan year 2027. However, Carrier approaches are likely to vary by geography, product type, and specific strategic priorities. We expect to gain greater visibility into carrier plans during the third quarter as AEP preparations accelerate. One thing has become increasingly clear throughout this period of industry change. The market is rewarding high-quality, attention-oriented distribution models. That trend aligns exceptionally well with our strategy. Within the telebroker channel, we continue to see consolidation and rationalization as participants adjust to a new operating environment. Against that backdrop, we believe the value eHealth provides to both consumers and carriers is as important as it has ever been. For beneficiaries, we serve as a trusted advisor with access to extensive plan inventory, which is especially critical during periods of elevated change. For carriers, we help deliver highly targeted member acquisition strategies and what we believe are among the highest quality enrollments within our distribution channel, supporting both member experience and carrier margin objectives. One of the most important milestones of the second quarter was the launch of our lifetime advisory model. The lifetime advisory approach shifts our relationship with members beyond a one-time enrollment interaction to a model of ongoing engagement throughout the year. Our advisors are equipped to help beneficiaries evaluate plan changes, address gaps in coverage, navigate healthcare decisions, and identify additional products that may improve financial security. Beyond elevating consumer experience, we believe this creates significant opportunities to increase member value through ancillary product cross-selling. As expected, second quarter enrollments and revenue declined year over year. Under the new model, we are concentrating our marketing spend in the first and especially fourth quarters when we see the greatest return on our investment. In the second and third quarters, we are focusing our advisors on engaging with their existing members. We have made meaningful progress in the initial months following the Lifetime Advisory Model launch. Operationally, we have deployed advisor training programs, coaching initiatives, and new advisor tools that provide a centralized view of a member, enable personalized communications, and generate data-driven recommendations for effective member engagement. On the product side, we launched final expense in Q2 and laid the foundation for additional ancillary product offerings. Importantly, we have seen early validation of the core assumptions underpinning the strategy. First, consumers are responding positively to relationship-based engagement. And second, cross-selling opportunities appear significant. We are shifting the KPIs for measuring the success of this model in the same direction. towards more holistic member-driven metrics. It starts with member retention. The core objective of the model is to deepen our relationship with members and remain engaged throughout the year. We believe improving retention over time will be one of our most important measures of success. We also plan to track ancillary product cross-sell rates and member-based lifetime value across multiple products. Early indicators have been encouraging. The second quarter ancillary cross-sell rates doubling compared to a year ago. This represents the number of advisor-assisted ancillary product applications submitted by customers age 65 and older in relation to the number of advisor-assisted applications for major medical Medicare products, including Medicare Advantage and Medicare Supplement plans. While we will continue to measure and report policy-based lifetime value under ASC 606, our internal focus is increasingly shifting towards member-driven metrics that better reflect the broader value of long-term relationships. As the lifetime advisory model matures, we also expect unit margins to improve, driven in part by referrals becoming a larger contributor to total enrollments. And because advisors are central to the success of this strategy, advisor retention and productivity will be important indicators that we track closely. Another area where we continue to make progress is artificial intelligence. Our approach to AI is straightforward. We believe technology can improve efficiency, scalability, and customer experience while still recognizing the critical role licensed insurance professionals play in providing personalized guidance and peace of mind for consumers. Today, AI is already supporting several of our customer-facing functions, including after-hours interactions, call screen, and certain customer service inquiries. For the upcoming AEP, we plan for AI-enabled call screening to replace the majority of manual screening processes. We are also exploring opportunities to expand our AI deployments into more complex customer service inquiries. Beyond consumer engagement, AI plays an important role across our back office functions. We have expanded its use within product management, software development, and UX design. These capabilities helped us accelerate development of technology supporting the lifetime advisory model in about half the time we would have needed in the past. Another important application involves carrier plan content ingestion, historically one of our most data and labor-intensive activities. Through AI-enabled automation, we believe we can reduce manual efforts substantially while improving accuracy. Looking ahead, we see numerous opportunities across customer-facing workflows, advisor enablement, and internal operations. Collectively, we believe our AI initiatives have the potential to enhance scalability, improve service levels, and reduce costs over time. In addition to Medicare, the second pillar of our three-year strategy is achieving measured profitable growth within the under-65 consumer market. ICRA is a key component of that effort. A long-term trend toward ICRA adoption continues to strengthen as employers seek more flexible and cost-effective healthcare solutions. Industry forecasts suggest ICRA could cover approximately 5 million lives by 2029. Our strategy is to build a scalable platform that connects employers, employees, brokers, and benefit administrators through a seamless experience. While ICRA is not expected to be a significant contributor to our 2026 financial results, with revenue forecasted to remain below $5 million this year, our focus today is on establishing the foundation for future growth. That means developing our pipeline, expanding strategic partnerships, strengthening broker relationships, and continuing to refine our operating model. We believe the market opportunity is attractive, and we are pursuing it with the same disciplined, capital efficient approach that we are applying across the broader organization. To conclude, our priorities for 2026 remain unchanged. Build and scale the lifetime advisory model to deepen member relationships, improve retention, and increase long-term member value. Second, continue improving our cash flow profile with a goal of achieving break-even or better operating cash flow at the midpoint of our guidance. Third, advance diversification initiatives, including ancillary products and ICRA. Looking ahead. We continue to expect a return to sustainable revenue growth on a streamlined cost foundation beginning in 2027. We believe that growth will be driven by three primary factors. The transition from acquisition-based economics or recurring relationship economics, growth within ICRA, and selective expansion of our carrier-dedicated business, Amplify. We are encouraged by signs of improving stability across the Medicare Advantage ecosystem. While work remains, carrier sentiment and industry fundamentals appear increasingly constructive compared to where they stood a year ago. As we enter the second half of the year, preparations for AEP are underway. We plan to meet with carrier partners, scale our demand generation engine, and begin the operational work necessary to support another successful enrollment season. We believe we are well positioned to execute against our goals. Thank you for your continued support. I'll now turn the call over to our CFO, John Dolan.

Thank you, Derrick. Good afternoon, everyone. Our second quarter results reflect the launch of our lifetime advisory operating model and the benefit of the cost reduction initiatives we implemented earlier this year. Consistent with our strategic priorities, we reduced lead generation spending outside of the key enrollment periods and focused our advisors on member engagement. We also continued making targeted investments in the under 65 opportunity, particularly within ICHRA. These actions result in lower Medicare enrollment volume during the second and third quarters. They are aligned with our longer term objectives, improving return on marketing spend and increasing member lifetime value through stronger retention and ancillary product cross-selling. Importantly, we believe we are still on track to achieve our financial objectives for the year, including significant improvement in operating cash flow compared to 2025. Turning now to our second quarter results, please note that unless otherwise specified, all comparisons are on a year-over-year basis. Second quarter revenue was $33.6 million, down 45%. Total commission revenue was $29.8 million, including $7.6 million of net adjustment or tail revenue, which represents the ongoing value generated from previously acquired members. This compares to $17.8 million in tail revenue a year ago. Non-commissioned revenue was $3.8 million, down 38% from the prior year period. The decline was primarily driven by lower sponsorship revenue as carriers continued to prioritize margin recovery over enrollment growth. This was consistent with our expectations and reflects a broader trend we see across the Medicare landscape. As industry growth normalizes over time, sponsorship revenue could become a meaningful source of upside. Medicare segment revenue is $31.8 million, down 45%, primarily reflecting lower Medicare Advantage approved member volume and lower tail revenue. Medicare submissions declined 44%, during the quarter in line with our expectations. Moving to Medicare profitability and operating metrics. Within our Medicare segment, variable marketing and advertising expense declined 58%, reflecting our lower enrollment volume targets. And Medicare customer care and enrollment expense declined 21%. On a per approved member basis, total acquisition cost per MA equivalent approved member increased 16% during the quarter. Underneath that figure, customer care and enrollment costs per MA-equivalent approved member increased 42%, while variable marketing costs per MA-equivalent approved member declined 23%. We have significantly reduced marketing spend outside of the primary enrollment seasons while retaining our core advisor workforce. During the second and third quarters, those advisors are increasingly focused on member engagement activities and can rapidly pivot to inbound calls once AEP begins. Variable marketing costs and customer care and enrollment costs per member have moved in opposite directions in line with expectations. Second quarter lifetime value, or LTV, for Medicare Advantage declined 1%. Medicare Supplement LTV increased 16%. Medicare Part D LTV increased 52% compared to a year ago. It's important to remember that our unit economics remain largely policy-level metrics. They do not yet fully capture the value being created through higher ancillary product penetration, referrals, and broader member engagement. The increased ancillary product cross-sell rates are expected to become especially impactful as we return to growth and scale. In addition to increasing overall lifetime value, ancillary products generally produce a more favorable cash flow profile. because a significant portion of the ancillary commission revenue is received earlier in the member life cycle relative to a Medicare Advantage sale. Medicare's segment gross profit was $6 million compared to $19.1 million in the prior year period, reflecting primarily lower enrollment volume and tail revenue. The second quarter is also an important quarter from an actuarial perspective because it provides greater feasibility into the retention performance of the Medicare cohort enrolled during the most recent AEP. Based on our latest review, retention trends are in line with the AEP cohort enrolled in the prior year and ahead of the cohort enrolled two years ago. We continue to monitor retention closely, given the significant benefit changes and product adjustments implemented by carriers across the industry over the last two years. Our proven approach to booking initial revenue allowed us to continue recognizing positive adjustment revenue again this quarter for a cumulative tail revenue of $284 million since 2018. Turning to the employer and individual segments, revenue in the segment was $1.8 million compared to $2.7 million. As we continue reducing investment in our traditional direct-to-consumer under 65 business, We expect that decline to eventually be offset and over time exceeded by growth in our emerging ACRA platform. As Derrick highlighted earlier, our focus this year remains on building the employer relationships, partner ecosystem, and operational capabilities necessary to support scalable growth in the years ahead. Segment growth loss was 0.8 million compared to a loss of approximately 0.3 million. Turning to overall profitability metrics, second quarter GAAP net loss was $23.6 million compared to $17.4 million, while adjusted EBITDA loss was $21.8 million compared to $14.1 million. Non-GAAP operating expenses declined 25% to $58.6 million, reflecting broad-based reductions across both fixed and variable cost categories. Non-GAAP marketing and advertising expense declined 45%, including a 56% reduction in variable marketing costs. Non-GAAP customer care and enrollment expense declined 20%. On the fixed cost side, non-GAAP general and administrative expense declined 26% while non-GAAP technology and content expense remained relatively stable as we continued to support key strategic initiatives. Second quarter operating cash flow was negative 5 million compared to negative 41.2 million representing a substantial year-over-year improvement. We currently expect year-over-year operating cash flow improvement in each of the remaining two quarters of the year. We ended the quarter with $101 million of cash, cash equivalents, and short-term marketable securities, remaining comfortable with our liquidity position to support both operating requirements and strategic investments. We ended the quarter with $1 billion of commission receivables, including both current and long-term balances. That compares to $917 million as of June 30, 2025, representing an increase of 10%. As we look ahead, we are encouraged by the progress we have made under our new strategy. We have successfully launched the lifetime advisory model and are seeing encouraging early indicators around member engagement and ancillary product adoption. We remain on track to achieve our financial objectives for 2026, including meaningful cash flow improvement in our fixed and variable cost savings targets. Based on our execution year to date and with the annual enrollment period still ahead of us, we are maintaining our 2026 guidance ranges for revenue, GAAP net income, adjusted EBITDA, and operating cash flow. We are updating our outlook for 2026 net adjustment revenue, which is now expected to be in the range to $20 million to reflect the second quarter 2026 net adjustment revenue we recognized. Perhaps most importantly, we believe we are building the operating and financial foundation necessary to return the business to sustainable growth beginning in 2027. In the third quarter, we plan to reduce our marketing spend to an even greater degree year over year compared to the 45% reduction in the second quarter. As a result, we also expect a greater year-over-year decline in third quarter enrollment volume and revenue. We plan to deploy the majority of our marketing budget for the year in the fourth quarter across our highest performing direct channels. With that, operator, please open the line for Q&A.

We will now begin the question and answer session. If you would like to ask a question, please press star 1 to raise your hand. To withdraw your question, Press star 1 again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from the line of George Hill with Deutsche Bank. Your line is open. Please go ahead.

Hi, this is Maxie on for George. Thanks for taking the question. Could you talk about your expectations for the MA Broker Commission environment for 2027? Are you anticipating any meaningful changes in carrier commission strategies and potentially a further increase in non-commissionable plans? Thank you.

Thanks, Maxie. It's good to hear from you. Thanks for joining the call. Let me make sure I heard the question appropriately. As it relates to agent commissions from carriers in the upcoming AAP, I think, as you know, CMS printed the maximum rate, I think, which was roughly 4.5%. But not unlike a year ago, our expectation is that each carrier will deploy a different strategy. and that likely commission rates will differ by plan type, geography type as carriers finalize their plans for when, where and how they want to grow their Medicare Advantage book. As it relates to non-commissionable revenue, I think that was the second part of your question. As we discussed, I think, in Q1, we still don't see any material change in non-commissionable revenue opportunities as we prepare for AEP, but clearly our conversations with carriers are ongoing, and we're evaluating those opportunities. And then I think maybe another question that you asked was about non-commissionable plans. Again, we don't expect a material change year over year. We certainly still think carriers will potentially deploy that as a way to manage growth, again, specifically in plan type and geography type. But as we've said in prior calls, size and scale matter as we navigate this This market, both for our carrier partners as well as for our members. And so we're comfortable with our, you know, with our planned supply that we'll be able to navigate that well.

Got it. Thanks a lot. And you just talked about deeper cuts in marketing spend in Q3. As you prepare for the upcoming AP, could you talk about how you're thinking about the level and mix of marketing spend relative to last year?

Yeah, thanks. I'll start, and then I'll let John and or Michelle add. So again, we've been very deliberate in our marketing demand generation spend over the last few years as we have navigated away from affiliate spend and those channels more into our branded marketing channels. And there's an important reason why we've done that, and it's linked directly to the quality of Medicare Advantage enrollments The retention of members that are acquired through those branded channels. We continue to see positive outcomes. As John mentioned, our most recent cohort in the first quarter of this year, the retention looks very similar to last year where we had similar mixes of branded and affiliate marketing spend. But again, we're continuing to see improvement over years where there was a higher percentage of spin into the affiliate channels. And so that's how we're continuing to think about the marketing mix heading into Q4. And again, we're deploying those dollars in the highest, you know, LTV to CAC ratio periods.

I'm actually John Dolan. I just want to add one thing. So obviously in the third quarter, we'll be in the second quarter of our new lifetime advisory model. So in order to create space for our advisors, obviously we're going to bring down marketing spend, which will give them the capacity to work in that advisory model. And so with that lower spend, we'll see some lower commission revenue during that quarter.

Your next question comes from the line of George Sutton with Craig Hollam. Your line is open. Please go ahead.

Hey, guys. Logan on for George. Thanks for taking the question. So, Derrick, as you guys launched the lifetime advisory model here, I'm curious what you think is realistic in terms of attach rates over time, and when do you really start to measure your success on that front? I mean, how long do you think it should take for the motion to mature?

Yeah, Logan, great to hear from you. That's a really good question. So again, as we reported in the script, we're really pleased with sort of this first quarter and the cross-sell rate that we've experienced in Q2 of this year versus Q2 of a year ago. You know, I do think, you know, it's realistic to expect that cross-sell rates will vary by quarter. And, you know, as it relates to How we think about measuring it as it relates to maybe declaring victory, if that's the right way to think about it. I personally like to get through a full cycle, sort of through a full year, through four full quarters, just to see and understand how members respond, how our advisors engage in those types of conversations. Over time, I don't think it's unrealistic to expect a cross-sell rate in a mature model. And it's hard to, at this point, just one quarter in, to define how long that we think it takes to get to full maturity. But I don't think it's unrealistic in the Medicare space to assume a cross-sell rate of 0.5. So that's the way I personally think about sort of a mature model. in the Medicare Advantage space. But we're excited to continue deploying the model and learning both how our advisors and how our members respond.

Understood. So one other for me, I mean, last year plan terminations were quite high, especially relative to previous years. I'm curious how you see plan terminations shaping up this year. And on top of that, with the smaller team, the focus on branded channels, How targeted are you able to be in terms of knowing those areas where you're going to have shoppers and conversion might be pretty good?

Yeah, again, really good questions. I'll take the first part and then I'll let Michelle take the second part of that question. You know, so as it relates to, you know, plan terminations versus a year ago, I would say, again, it's really early in the cycle. I think we have more to learn as we continue having conversations with our carrier partners. But I am encouraged by some of the early conversations with carriers. And again, it's not the same across the board, so to speak. So in some of our conversations, we're hearing our carrier partners seeing stability in their portfolios. And I think that's being reflected as we see our carrier partners that are public at least report their Q1 and Q2 earnings. We're seeing margin improvement inside of their Medicare Advantage phase. So we're encouraged that there are places and pockets where it appears as though some stability is returning to the market. But we also know that with some carriers, there's some expectations that have been set that planned terminations will be similar year over year to slightly higher. I think that's really more of a reflection maybe of just You know, market share gain in any one AEP. And again, as the market sort of settles down and carriers, you know, navigate and manage their full portfolio. Michelle?

Sure. Hi, Logan. It's Michelle. Nice to chat with you. I'll answer a bit of the marketing piece as well as just termed members in general. So I might think about it in two different components. You know very well, we've now had multiple years of success with our brand and our marketing channel performance. And it does perform very well in these years of high plan disruption. We know that we have this very broad carrier mix, and we can assist consumers, right, in a very unbiased way in helping them navigate through those changes. And so, We know the strength of that branded messaging and the channels that we leverage to deploy that, always guided by our LTV to CAC and strong returns. And so that will help in sort of the broad marketplace channel and broad consumers that are switching, shopping, and needing help. Also, though, we even are very acutely aware and surgically keyed in on our own numbers. that are impacted, especially by current plans, right? We really need to make sure that we are reaching them. And we do that through our advisors will help through that, right? That email calls and making sure that we are proactively reaching out, making sure that they are aware that they are on a planet no longer and how can we help them navigate through that change.

Okay. Thanks, Jesse.

Your next question comes from the line of Jonathan Young with UBS. Your line is open. Please go ahead.

Hey, thanks for taking the question. I'm just kind of building on the term plan commentary. I guess at least one of the larger public carriers has talked about retaining a fair amount of their term plan members. of that retention that they're aiming for falls to you directly. Is there a way to kind of parse of that in terms of how that would fall to you in terms of additional commission over and above what you would normally get within the bands of the CMS commissions, obviously? Or do they give you additional advertising? Is there just any color around that?

Yeah, Jonathan, thanks for the question. Clearly, not sure exactly which carrier or partner that you're referring to. But, you know, as we, I mean, clearly in our own book, we have member retention data. We understand, you know, what our membership balance looks like walking into AEP. And we have a concerted effort to reach out specifically to members where we believe, either we know that plans are going to terminate or where we believe they're at risk of terminating. And so we have an effort within our sales organization to retain as many of those members possible. But I don't think we have, at least at this point, an indication of what that opportunity looks like yet for us. Again, we'll learn more as we lean into carrier conversations in Q3 as it relates to AEP preparations.

Okay, and then just given this is kind of a midterm election period, is there any consideration for how advertising spend may kind of spike up or what have you in the fourth quarter and how you may be planning around that? Thanks.

Yeah, Jonathan, thanks. I'll let Michelle take that question.

Yeah, thanks, Jonathan. Appreciate the question. I could go back to even, you know, two years ago when we had the full election. I would say that you see a huge spike in race, or at least the way that we buy media, we are able to mitigate that. And so what you see is maybe different performance on types of content and media. So think news stations may have higher levels of engagement. And so we will make sure that we lean in as we're seeing the strong performance there.

Your next question comes from the line of Ben Hendricks with RBC Capital Markets. Your line is open. Please go ahead.

Hi, this is Michael Murray on for Ben. Thanks for taking my question. I just wanted to discuss cash flow. I appreciate that you're expecting operating cash flow break even at the midpoint of your guidance in 2026. But if you expect to return to growth next year, How should we be thinking about the puts and takes cash flow in 2027? Thanks.

Yeah, thanks, Michael. I'll let John pick it up.

Yeah, so, hi, Michael. How are you? Thanks for the question. So, yeah, our midpoint of our guidance for 2026 of our operating cash flow is slightly positive. Last quarter, we put out our long-range plan and some guidance there on where we think Thank you all for joining us. for tracking to generate positive operating cash flow in 2027.

Yeah, Michael, maybe I'll just add a little bit. You know, if you think about the core tenets of the lifetime advisory model and what we believe it will help us achieve, you know, it really starts with, you know, member engagement that leads to higher retention. And so, you know, higher retention inside of a portfolio of MA business leads to higher cash flow. On top of that, increasing ancillary product offerings that meet needs of consumers. But again, what we're endeavoring to do here is to broaden the product portfolio so that we give our advisors the opportunity to meet whatever need potentially that a Medicare Advantage member may have based on the plans that they choose. So higher ancillary cross-sell rates lead to higher cash flow as well, And on top of that, the timing of the cash flow related to ancillary products is much more favorable than MA plans. So we get more of the cash up front. So that leads to a higher cash flow profile in future years. And then the last thing I would just say is we, again, endeavor on the ICRA expansion. That product profile and that cash flow profile of that type of business is also favorable relative to Medicare Advantage business. So it's really all of those things in the future as we continue to expand our capabilities and our product offerings that will allow us to continue to build on the meaningful progress that we're making this year in our operating cash flow profile.

Okay, that's helpful. And then just a follow-up on AI. I wanted to see how... These initiatives are helping you increase your efficiency, reduce costs, and how you're thinking about potential operating leverage driven by AI. Thanks.

Yeah, great question. So I'll just point to two things. I think we mentioned it in the script. Number one, on the front end are AI screeners. So just as a reminder, I think about roughly this time a year ago, the company had piloted AI screeners and the initial feedback that we got from our members and our consumers was really positive. So it was deployed at scale during AEP a year ago to where I think by the end of AEP, our AI screeners were answering roughly 80 to 85% of the incoming phone calls. Our plan this year is that those screeners will answer 100% of the calls. And so where in prior periods we've employed human FTEs to be screeners of calls, we've been able to reduce that expense and use our AI screeners to achieve that outcome. And then again, I would say what we observed in our past AEP is that for calls that were answered by our AI screeners, that once they were transferred to an advisor, that the call times were lower than a human screener call that had been transferred and our conversion rates were higher. Now, I feel compelled to say almost like an investment manager, past performance doesn't indicate future performance. But we are optimistic that what we've learned in that process that we'll continue to see the benefits of the AI screener capabilities that we have. So that's sort of an example on the front end of engaging with consumers. In the back end, again, we mentioned this in the script, that one of the very time-consuming and cost, you know, high cost initiatives we have on an annual basis is when we're receiving updates from our carrier partners on plans, plans, plan designs, you know, you know, benefit changes, networks, all the things that just go into maintaining that information across our ecosystem historically has been a very Thank you for joining us. to ingest all of that material from our carrier partners. So again, reduced fixed cost savings from a headcount perspective. We'll be able to ingest the material much quicker, and we believe at a much higher rate of quality. And so that's reflected in our full year fixed cost reduction in our plan.

All right. Thank you.

Your next question comes from the line of George Hill with Deutsche Bank. Your line is open. Please go ahead.

Hey, guys. I think you got the actual George this time. Me and Maxie didn't coordinate well on which of us was going to get on the call, so I apologize for that. My quick question, I kind of have like, I'll call it two, two and a half quick questions. Number one, is it too early to talk about or have thoughts on whether we should expect an elevated churn year in MA this year like we saw last year? or will we need to see Plan Finder come out to see that? And number two, which I think is my more important question is, can you talk about kind of thoughts and any progress or discussions that might be being had as it relates to the converts from the balance sheet and the ability to clean up the balance sheet? Thanks.

Great. George, thanks. It's great to hear from you and great to get your questions. So as it relates to elevated churn, again, I would just remind You and others, the way we've described sort of the disruption in the marketplace is we've described it as one event that we fought and believed, you know, a year plus ago that would occur over multi years. And that's exactly what we've seen play out. And so, again, we know from some of our carrier partners that have publicly stated that they expect similar to slightly elevated plan terms than they experienced in the prior year. We've heard from other carrier partners that they don't expect the same level of churn. So I would just say I think it's too early for us to sort of make a call on sort of the totality of the market. But again, we're encouraged at least that we're hearing from some of our carrier partners that they believe that stability is returning. and again, as I mentioned earlier in a question, I think that's reflected in Q1, Q2 earnings announcements from our carrier partners and how they're reporting improved margin as it relates to their MA book of business. As it relates to HIG, Again, we're continuing to have conversations with our preferred partner. As a reminder, the April of 27 day that is getting closer is not a debt maturity day. Again, I would remind you and others that at the end of the year, when we announced our ComVest financing, the board announced the formation of a strategy committee which HIG is actively participating in and so we're continuing again to have those conversations and you know the goal of the conversations is to get finally you know optimally to a to a resolution that benefits all stakeholders and so nothing New material to report on that other than to just say that we're continuing in that effort with HIG.

Appreciate the call. Thank you.

There are no further questions at this time. I will now turn the call back to Derrick Duke for closing remarks.

Thank you all for joining us today and thank you for your questions. Before we wrap up, I just want to reinforce how we're thinking about 2026. This is a bridge year for eHealth as we transition to our new lifetime advisory operating model, a model that starts with deepening member relationships and leads to improved retention and increased member lifetime value that we create across the full range of products and services that we deliver. And as that model matures and as we continue expanding in the under 65 market, particularly through ICHRA, we believe that we're building a business with a stronger cash flow profile and a more durable earnings power over time. That's the foundation behind the three-year targets we shared last quarter, including a return to revenue growth in 2027 and meaningful expansion in EBITDA margins. I also want to thank our employees for their hard work and for continuing to bring our one-team mindset to life every day. We appreciate your continued interest in e-health, and we look forward to updating you on our progress next quarter. Thank you.

Thank you for attending. You may now disconnect.