GoHealth, Inc.

Good morning and welcome to the Go Health Third Quarter 2023 Earnings Conference Call. My name is Michelle and I'll be your operator for today's call. At this time, all participants are in a listen-only mode. Following the prepared remarks, we will conduct a question and answer session. As a reminder, this conference is being recorded. I'll now turn the call over to John Shea, Vice President of Investor Relations. John, you may begin.

Thank you and good morning, everyone. Welcome to Go Health's third quarter 2023 quarterly results call. Joining me today are Vijay Kote, Chief Executive Officer, and Jason Shulls, Chief Financial Officer. Today's conference call contains forward-looking statements based on our current expectations. Numerous none and unknown risks and uncertainties may cause actual results to differ materially from those anticipated or projected in these statements. Many of the factors that will determine future results are beyond the company's ability to control or predict. You should not place undue reliance on any forward-looking statements, and the company undertakes no obligation to update or revise any of these statements, whether due to new information, future events, or otherwise. Earlier today, we issued a press release containing our results for the third quarter of 2023. We have posted the release on the Go Health website under the Investor Relations tab. In the press release, we have listed a number of risk factors that you should consider in conjunction with our forward-looking statements. We encourage you to consider the other risk factors described in our Form 10-K and Form 10-Q reports filed with the Securities and Exchange Commission for additional information. During this call, we will be discussing certain non-GAAP financial measures. These measures are reconciled to the most directly comparable GAAP financial measure, and the reconciliations are set forth in the press release. You may also refer to the investor relations presentation posted to the investor relations section of our website for reconciliations of non-GAAP measures to the most comparable GAAP measures discussed during this earnings call. I will now turn the call over to GoHealth CEO Vijay Kote.

Thank you, John, and thank you all for joining us today. I'm pleased to report another strong quarter for GoHealth, with revenue and adjusted EBITDA in line with guidance. Our quarterly results showcase a 12% year-over-year revenue growth, excluding look-back adjustments and non-encompassed BPO services, while our full-year guidance points at a substantial improvement in cash flow from operations and a rapid increase towards profitability as compared to last year. During the third quarter, together with our external agency partners, we helped over 161,000 Medicare consumers assess their current coverage, review potential Medicare options, and enroll in a plan. Go Health's core value proposition to consumers is providing a trustworthy shopping experience that allows them to select the Medicare Advantage plan that meets their unique needs. Our marketplace model is distinct from traditional brokers in several ways. At Go Health, we put the consumer at the center of all we do. This has resulted in a passionate belief that we must remain unbiased in the servicing of our consumers. We accomplish this with our Encompass platform, offering a personalized, no-pressure shopping experience where consumers can feel comfortable and confident throughout the entire process. The eBroker industry has long believed that growth is directly tied to the acquisition of more agents and thus more leads. However, this traditional approach often leads to dis-economies of scale, where the cost of adding more agents and leads drives up customer acquisition costs due to lower quality agents and lower quality leads. We believe technology can drive economies of scale and meaningfully elevate the consumer experience by matching them with the right plan for their needs. Encompass, our proprietary operating technology and data science platform, allows us to streamline shopping, simplifying the cumbersome and confusing experience of healthcare purchasing, while allowing our agents to focus on what's most important, showing empathy and care for our Medicare consumers. By leveraging our machine learning platform, we can better serve these consumers and deliver better outcomes for our business. Even with personalization, Encompass provides a standardized workflow that facilitates a uniform consumer experience while enhancing quality and improving cost efficiency. Business flowing through the Encompass workflow, most significantly reflected in the non-agency revenue line, is generally pre-funded and de-risked from policy lifetime values, and therefore should be considered as cash revenue. Non-agency revenue is increased by over 161% year-over-year from $12.9 million in Q3 2022 to $33.5 million in Q3 2023. The Encompass model generates more predictable in-period cash revenue and cash EBITDA. Consistent with our expectations, we have seen increased consumer shopping behavior amongst the Medicare consumers seeking our services. Benefit and health plan changes, such as increasing or decreasing co-pays, moving drugs on and off formularies, regional shifts in provider networks, and expansion or contraction of service areas result in shopping. In addition, material shifts in the Centers for Medicare and Medicaid Services' Medicare Advantage Star Rating, good or bad, generate more shopping. CMS recently announced 2024 Medicare Advantage Star Ratings, and amongst the top 15 health plans by enrollment, about half improved or had stable ratings year over year, while the other half saw their ratings decline. When environmental factors align with the ever-changing personal circumstances of the Medicare consumer, it's no surprise that there is increased shopping. We believe Go Health has been ahead of the curve in terms of identifying shopping behavior and building tools to support it. Our investment in technology is an important differentiation for GoHealth and our consumers. Our proprietary PlanFit tool utilizes a machine learning algorithm built on data from approximately 28 million consumer interactions over multiple years, plus star ratings, and GoHealth independently observed retention characteristics. Our PlanFit tool helps our agents quickly select a recommended plan based on the consumer's individual needs to drive a more likely match for both immediate and short-term consumer priorities. Last quarter, we spoke about our new PlanFit Checkup offering, designed to create a personalized, pressure-free, high-quality shopping experience. We assess consumer needs via the PlanFit Checkup, regardless of whether they have been a Go Health caller for years or a first-time caller. We've seen three consumer outcomes for PlanFit Checkup. In the first outcome, we recommend a new plan to help them save money, increase benefits, or better cover their new needs, and re-enroll them. In the second outcome, we make a recommendation, but the consumer chooses to stay in their current plan. In the third outcome, we find that the consumer is in the best plan for their current needs and reassure them no new enrollment takes place. GoHealth agents who complete the PlanFit checkup are compensated regardless of whether the assessment results in an enrollment. If after a plan fit checkup, our agent informs the consumer they are already on the right plan to suit their personalized needs and no new enrollment takes place, we compensate our agent for investing their time to build trust with the Medicare consumer. In Q3, during our controlled launch, we completed almost 5,000 plan fit checkups and are proud to be doing what is needed in the industry, building trusted, long-term relationships with consumers. We expect the number of completed PlanFit checkups to increase over time as the program is now deployed across our entire Go Health agent base. Our agents are responding positively to PlanFit checkups as we further align agent interests with consumers and continue to build long-term trusted relationships with consumers by putting them at the center of all we do. Our standardized and compass model directs our focus to the lifetime value of a consumer and their relationship with GoHealth, as opposed to the lifetime value of a transactional policy at a given point in time. In addition, we are excited to share that we have made significant progress in both our unified agent experience and Customer 360 technology initiatives, and we'll share more over the coming quarter. Both are aimed at driving improved efficiency for our agents while also preparing us to succeed in a future where consumers are empowered to enroll in and manage their Medicare on their own terms, whether telephonically, digitally, or some combination of the two. Building off the foundation of our robust data set within Customer 360, we have invested a significant amount of time into understanding and testing our learnings of the Medicare consumers. Based on the work we have been doing in earnest over the last year, we have found there are very specific segments of the population that find value in the way we have historically gone to market and the value proposition we have provided. We have also learned there are larger segments of the market that are looking for personalization, not only in the benefit and plan matching process, but also in how they interact with us and our proprietary technology. Based on this insight, We've begun efforts to adapt our engagement model to meet more consumers wherever they're most comfortable, to ultimately deliver them peace of mind in their Medicare coverage decisions. Our unique end-to-end solution is strategically designed to prioritize plan satisfaction and long-term retention, ensuring the most favorable outcomes for Medicare consumers, while aligning with the objectives of our health plan partners who share our vision and values. To that end, the U.S. Senate Finance Committee, along with other consortiums of legislators, have met and commented on Medicare Advantage marketing practices and enrollment tactics. And we are pleased that they are focused on the same core topic we are, protecting Medicare consumers and ensuring an unbiased, personalized shopping experience. In addition, earlier this week, CMS issued the calendar year 2025 proposed rule for Medicare Advantage and Part D. Those early and additional clarifications and definitions will be necessary to draw any conclusions on the implications. It is important to highlight key facts on GO Health's operating model. First, in our model centered on the Encompass workflow, our licensed agents are compensated for a quality plan fit checkup regardless of whether a new enrollment takes place. Second, information on our commercial arrangements with health plans are not shared with our licensed frontline agents. Third, our license agents do not get compensated differently based on which health plan or product they recommend for the consumer. Finally, as part of the Encompass workflow, after our unbiased Tier 2 shopping agent recommends a plan, our Tier 3 agent reviews the recommendation again with the consumer, discusses the trade-off, and reconfirms it is the right choice for them before they ultimately complete the application. We are confident with this process we can ensure through our technology, training, compensation model, and real-time quality assurance that our focus is doing what's right for the consumer. As we embark on the next phase of our growth journey, I take great pride in the fact that GoHealth is serving a large and important group of consumers by helping them navigate a challenging healthcare decision, harnessing the potential of our advanced technology tools for a better experience and delivering strong financial I'll now turn it over to Jason to discuss our financials in more detail. Thanks, Vijay.

I'm pleased to discuss our Q3 2023 financial results. Our Q3 performance met our expectations with revenue growth and improved profitability compared to Q3 of last year. As a reminder, we fully exited the non-encompassed BPO services business in Q2 of this year. Beginning this quarter, all revenue is related to our core business. Our third quarter revenue was $132 million demonstrating growth compared to $118.3 million when excluding look-back adjustments and non-encompassed BPO services in the third quarter of last year. We are pleased with this growth, which was driven by over 161,000 submissions representing a 31% increase year-over-year. Third quarter adjusted EBITDA improved nearly 20% year-over-year with negative $11.5 million as compared to negative $14.3 million in Q3 2022. In Q3, we generated $6.5 million in cash from operations, with approximately $72 million received in October shortly after the quarter ended, as a few of our health plan partners were slower processing invoices, which were expected in Q3. Adjusting for this timing, our Q3 cash from operations would have been approximately $79 million for the quarter. We remain on track for our full year's expected cash from operations of $75 million to $115 million. As illustrated in our quarterly results presentation, our trailing 12-month cash flow from operations as of Q3 2023 is a negative $3.2 million. However, adjusted for the $72 million payment timing, our trailing 12 months would have been approximately $69 million. Consistent with our performance in the first half of the year, we continue to see strong momentum with our unit economics. Our unwavering commitment to driving high-quality enrollment and leveraging our proprietary tools and technology has yielded remarkable operational efficiencies. As discussed in prior quarters, beginning in Q1 of 2023, we have been booking a higher constraint on our agency revenue as compared to 2022. This is primarily due to our expectation that shopping will continue to increase. This changing constraint is a significant contributor to the year-over-year decline of 15% in sales per submission. We are pleased by the efficiency improvements gained through our Encompass model. In Q3, our cost per submission improved 14% year over year. This rate of improvement is lower than previous quarters, as Q3 2022 already includes some of the efficiencies gained by the actions we took to restructure the business. It's also important to remember that Q3 is the least efficient quarter of the year, with lower volumes and investments made in advance of AEP. These investments include testing marketing strategies, introducing technology enhancements, and the ramping up of new agents. Given our in-line third quarter results, we are maintaining our full year guidance. We expect total net revenue, excluding non-encompassed BPO services, between $800 million and $850 million. Our expected adjusted EBITDA range, excluding non-encompassed BPO services, is $120 million to $140 million. And as I previously mentioned, we expect cash flow from operations of $75 million to $150 million for the year. Our reaffirmation of guidance is a testament to our extensive preparation, strong performance, and confidence in the future. Our expectations for total revenue, adjusted EBITDA, and cash flow from operations reflect our dedication to sustained growth and the delivery of value to our shareholders. The shift to our Encompass model, increasing non-agency revenue, and driving further operational efficiencies fuels our enthusiasm for quarters ahead, and we eagerly anticipate building on this momentum.

I'll now turn it over to BJ for closing remarks. Thank you, Jason. As we wrap up this quarterly results call, I want to underscore some key takeaways. We are harnessing technology to empower our agents and offer consumers a pressure-free shopping experience through our personalized plan fit checkups. As we navigate the current annual enrollment period, our investments in technology, commitment to efficiency, and focus on long-term retention all set us on a promising path. Finally, I want to thank our dedicated team for their hard work during this transformative time our shareholders for the continued trust and support, and our consumers for the opportunity to serve and provide peace of mind in their healthcare decisions. We look forward to the exciting journey ahead and opportunities it brings to enhance the lives of Medicare consumers while driving value and growth for Go Health. Operator, we're now ready to open the floor for questions.

Thank you. If you'd like to ask a question, please press star 11. If your question hasn't answered and you'd like to remove yourself from the queue, please press star 11 again. One moment while we compile the Q&A roster. Thank you. Our first question comes from Sandeep Soria with Delaware Street Capital. Your line is open.

Hi, Vijay and Jason.

Can you guys hear me okay? Can you guys hear me okay?

Yes, we can hear you.

Okay, great. My first question is this. Can you guys discuss your debt maturities and your strategy around managing debt over the next one to three years and then i have a couple other follow-ups sir please stand by your call will resume momentarily sorry about that our line got cut off there and we just came back so if you wouldn't mind repeating the question i'd appreciate it sure can you guys hear me now yes you can thank you okay great great um so i have a couple questions uh the first is um Can you discuss your debt maturities and your strategy around managing debt over the next one to three years?

Yeah, this is Jason. Happy to, and thanks for the question. So, yeah, our term debt comes due in September 2025 and our revolver in September 2024. Our plan is in early 2024 to go ahead and refinance both of those. and part of that improve our overall interest rate as well.

Okay, great. And then I tried to keep my questions in some reasonable order, but they're a little all over the place, so sorry. But okay, when I think about general revenue, you basically have two buckets, and I appreciate your your comments on the call, you have the agency or commission revenue where some percentage is collected up front and some over time. And then you have the non-agency, call it non-commission revenue, which is collected closer to proximity of recognition. Is that the right way to think about that? Or am I missing something?

No, I think you're thinking about that correctly.

And the partner marketing and other services, which bucket does that fall into?

That would more similarly resemble the non-agency from my cash collection standpoint.

Okay, got it. And then within that context, how do I think about both of those buckets kind of growing over time? And I know the business has been transitioning to kind of Uncompass and then some non-commissioned revenue as well. So, but I'm trying to think, and maybe the answer is like longer term, maybe the business stabilizes in these revenue buckets for the next, over the next 12 to 18 months, but longer term, how do I, how should I think about growth of each one of those revenue line items?

Yeah, I think let's talk about kind of this, sorry, this is Vijay. As you think about it, what I would say is you're going to see more of a shift on a percentage basis towards the non-agency. As you see non-agency shift over, you'll see those marketing dollars in that line shrink as a percentage of the total distribution because that's more linked to our agency line. Though, as Jason said, it has the same cash dynamics of non-agency, but it's linked to agency. So if you see agency go down as a percentage of total sales, right, or volume, you will see that shift take place. But as we said earlier this year and we continue to operate with, we're going to have more and more of our total operating workflow moved through the encompass platform. And you'll have more of a shift towards that non-agency line over time. Got it.

Okay. Thanks. And then, uh, so just so I understand it, when I think about third quarter cashflow, there was 120 over $120 million improvement on a trailing 12 month basis. Is that, is that the right takeaway? Yeah, that's correct. And then when you adjust for the, health plan partner payments, the improvement was closer to $200 million. Is that the right way to think about it?

That's right. So on a reported basis, you got it exactly right. And then what we had was $72 million that came in in October that was expected in September. And so, yes, you're thinking about it exactly right. You would make that additive to the $120 million.

Got it. First of all, congratulations. That's not an easy swing in improving cash flow over a 12-month period. That's very impressive, especially given your revenue base. So congratulations for that. I don't want that to go unnoticed. When you guys think about guidance, though, for operating cash flow of 75 to 150 million, how do we think about the sustainability of that cash flow over the next few years? And then can you also tie that? The second part of the question is, how do we think about CapEx? over the next few years as well.

Yeah, I think what we are seeing is that barring any really interesting investments that you'd see within any given year, you're going to see some consistently stabilization and growth of that operating cash flow. We're pretty confident about that as we think about our growth rates. If you even kind of just look at the overall market growth of kind of 5% to 8%, that's if everything just grew in line and we only grew in line with the marketplace. As we had in our prepared comments, I described the fact that we've done a lot of work in our segmentation to identify there are a whole bunch of populations out there whose needs aren't being met of how to shop and shop effectively with an unbiased resource. And so we are investing in building tools to address that marketplace and bring additional opportunities for growth on top of what the market's doing in total. And so as you think about that, and you think about my previous comments about more shift towards non-agency versus agency, you can see that we expect this to be stable and growing as time goes on.

And then CapEx?

Oh, sorry. On the CapEx side, as we alluded to in our prepared comments, and we've spoken about it over the course of the last year, we are making more and more investments in technology as time goes on. uh as it relates to that segmentation work we have found there's a lot about our technology and tools that we want to enhance to reach those different populations in a unique way so i wouldn't be surprised if you saw some step function adjustments and how we think about capex over time but they'll always be very pointed at driving near-term growth got it

So should I think about it as a percentage of revenue or should I think about the current at the end of this year, the CapEx level should grow in line with market growth or revenue growth?

Yeah, I think you look at what we spent this year and then put some incremental growth on that versus tying it directly to a revenue number.

Okay, great. Thanks. I'll get back to you. Sorry about that. Thank you. Oh, great. Thank you, Nate.

Thank you. Our next question comes from Jim Sidoti with Sidoti and Company. Your line is open.

Hi, good morning, and thanks for taking the questions. First, I'm sorry if I missed it, but did you break out the revenue spread agency versus non-agency?

Yes, it's in our reported numbers. We can give you those, but yes, we do break it out. There's a specific line item for non-agency and agency. And for the quarter, Jason, you want to give the number?

Yeah, so for the quarter, we had a total revenue of $131 million, and the agency was $97.8 million of that total.

All right. And, you know, just a big picture view, it seems like you've done a lot since you've been there to right-size the business, improve software to kind of make these improvements. Are there any near-term initiatives that you need to complete to continue to make progress, or now is it a matter of just increasing volume?

Yeah, I think it's a great question, Jim, and I appreciate you asking it. There's a lot of opportunity, as I said, about addressing new populations. So if we wanted to just address the same population that we've been very good and efficient at addressing thus far, there's not a lot of enhancement necessary to do that. And as you think about our preparedness for this AEP, everything we wanted to deliver, we did deliver for that purpose and are rolling forward with it. As we look forward at other opportunities, we will, as we alluded to Sandeep's question earlier, make strategic investments in our technology and other elements to be able to address future growth and differential growth opportunities for the company. So I'm hopeful that's responsive to your question. But yes, I think there are going to be enhancements, but not for the current core population we target. But as we expand that serviceable market, we will absolutely be making more enhancements and investments.

Right. And I know it's pretty recent, some of the new regulations on Medicare plans, but just initial thoughts. Do you think that's good, bad, kind of neutral to prospects for GoHealth?

No, I appreciate the question. And as we look at it, first and foremost, I think what we are absolutely excited about, as I said earlier, is that we are fully aligned with all efforts and initiatives by any related parties, government or otherwise, to help support protecting the Medicare consumer and enabling them to make a good, personalized, unbiased decision. So we're very supportive of that endeavor. We also do recognize that there's opportunity within the industry to eliminate bad actors and make sure that those behaviors are regulated. That said, not everybody in the industry is a bad actor. And a lot of parties, like ourselves, are focused on doing the right thing. And still today, over 70% of all Medicare Advantage enrollment is supported by independent brokers in some way, shape, or form. And so we absolutely want to make sure that We're supporting all that work, that we have regulations that are put in place to enable those who are doing the right thing to continue doing the right thing. There's consistent enforcement of those things. And as we think about that, there's no doubt that when we look at the incentives across the industry, we want to align all incentives with that of the consumer and their well-being. And what we're excited about is the things we've already proactively done this year, before any conversations about a number of these items that are addressed in the current proposed rules, we have already gotten ahead of, including compensating our agents for just doing the right thing, and making sure that there is some on the scale, per se, about selecting different health plans. So one thing is for sure, As we think about all of those key underlying factors, there's a lot of detail still left to be said about the specific regulations. We don't know how they'll be interpreted. We know that those interpretations and definitions will be clarified over time, as they always are year over year. And we're confident that the regulators and parties like ourselves will all come to the right conclusions about where we need to end up. But it is very early in the interpretation and discussion of those regulations.

All right, thank you.

Thank you. Our next question comes from Greg Arndt with Noble Capital. Your line is open.

Good morning, everybody. Thanks for taking my call. I really appreciate it. A very nice quarter in advance of the flurry of activity expected in Q4. A question about pricing changes. In terms of we expect the consumer to pay more regardless of what they do because prices in Part D is going up to some extent. But fortunately, they have more choices that appears going forward as well, which helps you in terms of getting more shopping eyeballs. The question I have is, why does increased pricing affect your commission rates? And then as a second part to my question, you referenced constraints. How much do the constraints put a brake on your revenue recognition? And will that change over time?

Greg, let me hit your first question, and then I'll let Jason address the constraint item. As it relates to pricing, given most of the population that seeks our services are targeting zero premium products in the Medicare Advantage space, it's less about the pricing of the product specifically. It's more about their own challenges with their own pocketbooks. right, the availability of capital, disposable capital, and what they are willing and able to spend on copays and other things along the way. And it is important to have a mechanism for using advanced proprietary technology to be able to enable a licensed agent to take that information, understand the specific unique needs of the consumer, and then put them through the different tradeoffs of what different benefits are available for what they are able to pay for their coverage and very specifically aligned to what they need and will likely need in the coming future for those benefits. I think that's a really important piece of the puzzle is just ensuring that we're cognizant of the fact that, you know, the free and available cash for the consumer is getting compressed or challenged at times. And it's important for us to be able to factor that into the analysis of what plan and product we make available to them. And as carriers introduce more and more plans every year, it is more important for them to do that checkup so that we can help them assess if there's some better ways to maybe even support their income and their needs as opposed to what they had previously selected. Is that responsive to your question on pricing and the sensitivity within the market that we serve?

Yes. Thank you. I appreciate that indeed. Even if you're a zero premium, though, there's probably going to be a bump up for some consumers. I don't think anybody's going to pay a whole lot less. Does that have any change or impact on your commission that you generate per submission?

Sorry, I did miss that in my first response, so I appreciate you bringing it back up. No, the net impact of changing a plan type, et cetera, that does not change the general reimbursement structures. The benefit design is independent of how we're compensated.

Okay, thank you very much. And then about the constraints issue. Thank you.

Yeah. No, happy to. So this is Jason. There's a couple of components here I think that are worthwhile to talk about. Number one, you know, we have actuarial models that go ahead and produce our LTV and are related to that. There are, you know, various assumptions that are built into it. On top of that, you know, and we're appropriately, you know, balanced in our estimation and build in the appropriate conservatism there. The second thing is we have constraints based on both our internal and our external channels, and those are individual constraints that are different for each component. The short answer I would get to how to think about this is if you look at our prepared presentation on our investor Relations site, if you look at Q3, we have about a 15% RPS decline year-over-year. And as I mentioned in our preparer remarks, the large component of that decline is related to the changing constraint year-over-year. And so 15% would be an overstatement of the constraint, but it's within that range.

Oh, great. That's a great answer. Thank you. I appreciate it, indeed. Just a quick follow-up, though, just so I understand this correctly. Will this constraint number change if it's based on actuarial considerations? I would assume it would, but tell me if I'm wrong.

We evaluate every quarter. You know, we would only change the things if we see something materially differ in the actual performance. And the quarters that are most relevant are, you know, coming out of AEP. and then also OEP, so Q4 and Q1.

Yeah, I think it's important to highlight in that process that as we assess those LTVs and the constraint, part of it is what you're seeing in the actual data retrospectively and also the application of management discretion. of understanding what we're anticipating to come. And those are not going to be seen in the numbers yet. And part of the constraint is trying to see that right before the data is telling you it. So for instance, all our references to increase shopping behaviors, et cetera, are more, or they're applied to the math more through the constraint of prospective expectations as opposed to what you're seeing in the actual data itself.

Terrific. Thank you for the explanation. I really appreciate it. Thanks, Greg.

Thank you. Our next question is a follow up from Sandeep Soria with Delaware Street Capital. Your line is open.

Hi, thanks for allowing me to ask another follow up question. So can you talk about your comments about the plan fit checkups you said you did? I think you said you did 5000. I lost track of that and the different and the breakdown of the potential responses. Can you just go over that? And then my question was, what is the What do you guys find is the outcome, the proportion of the different outcomes? Is it usually a third, a third, a third between the three? Or do you find that the majority of time, one of the outcomes is what happens?

No, I love that you brought it up because we're really proud of what the PlanFit Checkup is doing for consumers. The way, just to highlight it, the PlanFit Checkup is a systematic, technology-driven, standard, uniform experience for the consumer. So we have live agents that will ask key questions of the consumer that will be fed into the PlanFit tool that is demographically where they live, what are their eligibility statuses, which we're verifying and integrating into the tool. Then we apply the physicians or clinicians they utilize, the drugs or prescription medications that they're using and need, and then their prioritization of other key benefits via dental vision, hearing, OTC, or otherwise. And then through that process, then, we will assess that against their current plans as well. And we will present to the consumer whether the plan they're on, according to our proprietary algorithms, is a better rated plan versus those that are otherwise available or they're eligible for in the marketplace. And again, our scoring also takes into account the quality scores, star scores, and some of our own proprietary information on retention year over year. And then, and as you alluded to, there are three likely outcomes. you see one is we find out that they're on the best plan right and there's nothing to be done and we recommend that to them and I'll talk to you about what our agents get compensated on secondarily but they're on the best plan already there's nothing to be done we tell them that daily with peace of mind and we do nothing we just tell them call us again next time when you're ready to do a plan to check up again when plant benefits change or your circumstances change the second scenario is we make a Well, I'd say the second bucket is really going to be broken down into two other outcomes. One is we find that they are not on the right of the best plan available in the marketplace, and we present them some alternative plans that are better for them. And then the consumer may just say, you know what? I see the difference. It's not significant enough, or I just feel more comfortable staying with my current plan. We say, okay, great. That's your personal choice. We completely support that. If you ever want to reconsider that or think about other options, you call us back. And we're happy to help you. And again, no enrollment would take place in that circumstance. And then finally, it's in that scenario where, again, we presented all the different plans. The plan they're on isn't rated as one of the top plans available according to our algorithm. And then our agent presents one of those other plans. And they say, you know what? I'd love for you to help me enroll in that plan. When that happens, we then transfer to our tier three, our resolve agents. And those agents then re-verify that it's the right choice for them according to all that same scoring methodology. And then they take that application. So if you think about the distribution between that whole, again, we did 5,000 plan fit checkups in AEP. It is, I'm sorry, in Q3. And we're early in AEP, so I don't really have great stats to provide you just at this time. But I would say that the key is getting the consumer to get through the entire process. because it's not always about the distribution in each one of those dispositions. It's more important that we provided a high-quality experience and planted seeds or really kind of helped develop the relationship with the consumer so we're building that long-term relationship with GoHealth. So I think that's a big piece of how we think about distribution. But what I'll tell you, in all three of those scenarios, when a good plant-fit checkup takes place, Regardless of what the disposition is, our agent is getting paid. They earn money in all three of those dispositions because they did their job. They build trust with the consumer. And I think that's the most important piece of the bundle as well.

Can I follow up on that in terms of agent payment? So does that mean they get like a base salary? And then how do we think about bonus productivity? Is that like... Like, walk me through, when you say that they're paid regardless and they can maintain their independence, walk me through how to think about that from a kind of a base pay and a bonus that's driven by productivity basis.

Yeah, no, that's a very good question. We haven't given all the specific particulars of our compensation, so I'll kind of give you directionally. You know, our agents are generally paid on an hourly basis. and then they are given different quality and variable or variable quality and production components to their lot of their compensation and so based upon the volume of good plan fit checkups they do they will be compensated each time they do a good plan fit checkup and so that is you should think about there is a material portion of their compensation which is hourly and And then there is a decent component of their compensation that is variable tied to quality metrics. But when you think about the good plan fit checkup, that's not in the hourly wage. That is incrementally compensated on a variable basis when they complete each one of those.

Great. Thank you. Appreciate it.

Thanks, indeed.

Thank you. There are no further questions at this time. I'd like to turn the call over to Vijay Kote for closing remarks.

Thank you, Michelle. As we progress in our transformation, our team is optimistic about the future and our commitment to excellence continues to be the cornerstone of our endeavors. We look forward to connecting with you at upcoming conferences and speaking opportunities. And until then, thank you for your continued support.

Thank you for your participation. This does include the program. You may now disconnect. Everyone, have a great day.