Oscar Health, Inc.

Good afternoon. My name is Josh and I will be your conference operator today. At this time, I would like to welcome everyone to Oscar Health's 2022 third quarter conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, please press star followed by the number one on your telephone keypad. If you would like to withdraw your question, again, press star one. We ask that you please limit yourself to one question and one follow up. Thank you. 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, Josh, and good afternoon, everyone. Thank you for joining us for our third quarter 2022 earnings call, where we'll discuss our performance to date, our path to profitability, and the recently announced management transition. Mario Schlosser, Oscar's co-founder and chief executive officer, and Scott Blackley, Oscar's chief financial officer and soon-to-be chief transformation officer, will host this afternoon's call, which can also be accessed through our investor relations website at ir.highoscar.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 at ir.highoscar.com. 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 June 30, 2022, filed with the SEC, and our other filings with the SEC, including our quarterly report on Form 10-Q for the quarter period ended September 30, 2022, 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 third quarter 2022 press release, which is available on the company's investor relations website. With that, I would like to turn the call over to our CEO and co-founder, Mario Schlosser.

Thank you, Karina, and good evening, everyone. Thanks again for joining us today. I will provide updates on several topics, including our financial results for the quarter, our outlook on open enrollments and recent market dynamics, our strategy for a profitable insurance business in 2023, and more detail on the leadership updates that we shared earlier today. We will start with a look at the quarter. We see strong evidence of the continuing progress in our business. We increased membership and direct policy premiums dramatically year over year. At the same time, we have seen meaningful improvements in our medical loss ratio and administrative expense ratios year to date. Those improvements are particularly noteworthy against the backdrop of our strong membership growth. So overall, we're executing our plan. We are seeing the benefits of scale and of our infrastructure, and we have confidence about the future. We will discuss our full year 2022 outlook later in the call. As we look into open enrollments and as we think about our perspective on our positioning for 2023, we are, first of all, excited about the ACA market. The long-term sustainability of the marketplace is to us evidenced by what looks to be record high new membership and the return of many traditional players for this open romance. We at Asko have lived through years where the markets were unstable and even against very complex backdrops, we've been grinding out improved performance. And we don't grow tired of saying this, but the individualized ACA market looks to us much more like the future of a competitive US health care system than any other health insurance market. So it is smart to be really good at it. We see the recent competitive developments as in a positive, as there are more opportunities for the players that remain. And that being said, recent competitor exits demonstrate just how hard it is to navigate the ACA without having a profitable insurance business and without owning a modern day infrastructure. Oscar is, of course, paying attention to these lessons. Now I'd like to share some insight on how we are thinking about 2023 performance. In our individual business, we built our pricing to deliver margin expansion while covering higher cost trends and the impacts of Medicaid redeterminations. 2022, year-to-date medical costs are trending slightly below budgets, and utilization is largely flat year-over-year. Thus, we have additional confidence in the assumptions we put into pricing for 2023. As we told you last quarter, our approach to 2023 has long been focused on profitability over growth. We are targeting effective membership at the conclusion of open enrollments to be around 1 million members, plus or minus 10%. That being said, this is a particularly challenging year to forecast given the recent market exits. And so in this context, we have built an operating and a capital plan that is designed to allow us to deliver a profitable insurance company in 2023 and to minimize apparent cash outflows. That plan includes significant improvements in medical loss ratio driven by pricing for margin expansion and plans total cost of care improvements driven by our technology and strong operational execution. We also expect to drive down our total company adjusted administrative expense ratio through variable cost improvements and fixed cost savings. In pursuing profitability, we continue to focus on how we leverage our technology and our strengths to get us there. Let me give you a few examples. In this past quarter, the team deployed a number of infrastructure enhancements to drive further automation. We refactored our customer service experience so that our members who have the most complex needs are automatically routed to a highly-trained care guide, where members with less complex issues, like how to pay their bill, are routed to automated options. And we continue to see our product resonating with those who choose us, with our Net Promoter Score reaching 45 in the third quarter of this year, which is an all-time high. We also updated our policies to reduce readmissions, through better clinical incentive alignments within our network. We enhanced our prior authorization and claims matching logic to increase our authentication rates. We also continue to work with our major vendors to find in-year efficiencies. And with our increased scale, we expect vendor contracts to be a source of additional savings in years to come. All of this contributes to the progress we have made driving down MLR and our admin ratios. even with the massive membership growth we saw this year. As we look towards closing out 2022 and the execution steps we have in flight for 2023, we are confident about these opportunities for continuing to drive dramatically improved results next year. And these improvements also will give us additional leverage as we look to the future of our Plus Oscar business. As we said, we expect that we'll have a profitable insurance business next year with a combined ratio below 100%. We are also excited to share that we are now targeting total company profitability in 2024, a year earlier than previously expected, as we continue to drive cost savings across the business. And with that, I will turn the call over to Scott to walk us through the financials.