Joe Zubretsky: On the — I believe your first question was on the enhanced subsidies for Marketplace. I understand it — it’s hard to say. — bear in mind, they do go away unless legislation is passed to extend them. That’s — sometimes that’s misunderstood. They are going away because the subsidy enhancement was temporary. and a less legislation is passed to extend them they will. Now I can go through all types of political scenarios and legislative scenarios. There’s lots of people who think that, that can easily be given up for an extension of the Trump tax cuts. I’m not going to make any political conclusions here, but it’s probably a 50-50 push on how that gets done and if it gets done. We did not grow significantly when those enhanced subsidies came in because our members, keep in mind, we leverage our Medicaid footprint.
We go after highly subsidized, low-income members and we didn’t benefit a lot by the enhanced subsidies as most of our membership was already very, very highly subsidized. So, from our perspective, we’re not looking at it as a huge issue for us in terms of membership loss. And that’s the way I would answer the first part of your question. The second part had to do with which ruling. I want to make sure I understood your question.
Gary Taylor: The managed care, the Medicaid managed care access finance quality accrual that was out earlier this week.
Joe Zubretsky: Not significant. We’re still analyzing it. We’re obviously aware of it. We’re analyzing it. lots of different features to it, many of which incept over very extended periods of time. So, there’s nothing to immediately react to. But nothing in that guideline changes of the long-term trajectory of the business. As I’ve said many times, I often asked, is there any political legislative or judicial environmental issue that causes you major concern on the viability of the businesses you’re in. And the answer is no. The way the election comes out, whether Congress is split, whether things can get done vis-a-vis the 60 votes in the Senate needed to do something fundamental, the reconciliation process, et cetera. We don’t — we think the legislative and political scenarios are pretty neutral for the sustainability of the businesses we’re in.
Mark Keim: Gary, the one thing I would point out is certainly when they streamline Medicaid and chip eligibility and all the procedural items that folks have to go through to maintain or get eligibility, it just makes it easier for the appropriate coverage to go to the right people, and we think that’s obviously a good tailwind for our business.
Operator: The next question comes from George Hill, Deutsche Bank.
George Hill : I’m sorry about that. Joe, just a high-level question. One of your peers this week talked about a normalized individual MA margin of 3% or better. I know that your book of business is a little bit different. But I was just wondering if you guys would be willing to kind of speak to what you think the normalized margin profile of individual MA is and kind of how you think that varies between the D-SNP book and the individual book. And I know that you guys have a heavily subsidized population. So, the book is a little bit different, but I appreciate any color.
Joe Zubretsky: Yes. Well, our target for our Medicare business is mid-single-digit pretax. I wasn’t sure whether you’re referring to pretax or after tax, our NCR range for the products we’re in is 87% to 88%. As we said, we hope to get — not hope. We’re projecting to get right down to 87% here over the next couple of years. So, we still target mid-single-digit pretax margins in this business. We like the D-SNP business not only can produce excellent profits, but monetizing our Medicaid footprint for dual eligible population here over time is going to be a significant growth category for us. So, we’re perfectly positioned, but at least we’re well, well positioned to take advantage of the growth in the dirigible population here, and we still target mid-single-digit pretax margins, MCRs in the 87% to 88% range.
Mark Keim: George, the only thing I’d add is it’s really hard to compare a Molina book of business to some of our big competitors in Medicare. Remember, we skew really heavily to the dual eligibles. So, we’ve got an awful lot of our book in the high teens to $2,000 PMPMs, which are high acuity. If you’re very good at managing medical costs — there’s a big opportunity on those high-dollar members to get to the margins that Joe talked about, even in the presence of some headwinds. So, I think it’s really hard to make that comparison to others.
George Hill: [indiscernible], but I appreciate the color.
Operator: And the next question comes from Scott Fidel with Stephens.
Scott Fidel : Two questions. The first one, just if you’ve gotten the scoring results yet from Florida and have been able to start to develop the factual points that may be the basis of your appeal in Florida is definitely interested in your thoughts on that? And then just second, on the HICS side, just if you want to refresh us at this point after seeing results so far, what you’re expecting for full year MLR and pretax margin offer 2024 for the HICS business. Thanks.
Joe Zubretsky: On these protest processes, I think I’ve said about all I really should say about them. They are legal processes, and we have to see how they unfold. But of course, through various requests, I’m sure everybody’s got the information they need to document their findings and to put their case forward. So that’s all I’ll say about it. Your last question was about market to marketplace. As I said, we, last year, having good visibility into the business, having priced up, we were producing pretax margins in low double-digit total 10%, 11%. We decided consciously to invest 3 in some places, 400 basis points of that margin into growth, which is why membership grew 30% and revenues grew 20%. So, we’re well positioned to continue to produce our target MCR range, which is 78% to 80%.
And this year, we expect to finish the year at the low end of that range. which would produce a high single-digit pretax margin. It’s right where we want to be. And as somebody suggested earlier, a very now stable position, half the membership being renewal membership, 70% of it being silver, a nice platform off of which to grow measurably and modestly.
Scott Fidel: Okay. Got it. So, reaffirming the initial guidance you gave us for the exchange MLR margin?
Operator: And the next question comes from Andrew Mok with Barclays.
Andrew Mok : I think I heard you say that you’re prudent in your reserves due to change. Was there any favorable PYD in the quarter? And if so, did you reestablish that into your reserves?
