Humana's Q4 Earnings Call Recap: Membership Growth and Strategy Insights

It is Wednesday, February 11th at 9 a.m. health technards local time. And we are recording an emergency pod 'cause Himana wrapped up their earnings call this morning. Kevin, what were you here? I thought we heard a pretty good story. Obviously the headline that everybody was waiting to hear was growth of a made membership. Came in at 1 million new members in AEP up 20%, I'm up being up 25% on the year. Markets actually reacting pretty well to the news. I mean, that is a lot of growth as we've talked about at length. There's a lot of questions in the industry on how he man is gonna digest that growth in 2026. And now into 2027 with advanced notice, they equated themselves really well. I thought on this call. I mean, I don't know that with that level of growth that you could be doing any better. I think there's, you know, other universes where stock is not doing nearly as well. And I thought that it was a large part due to how they told the story of growth. Like it's pretty convincing in some ways that they might have actually figured out how to crack the nut in a way that other payers have not. Based off some of the numbers that they shared. So on the whole, I thought they did really well. It's trading down 2% right now. It just under 180 bucks a share. Certainly if you go back and look over time, like that's a consistent drop. It was up at what, 260 in late January. So advanced rate notice already took a big hit out of the stock price. But I'm all I thought it was, I thought it was a good, helpful earnings call that gave confidence generally speaking that this might actually work out. What about you? Yeah, so the headline number was 25%. And that was driven by new sales and improved retention. Works out to additional 1.3 million members. And yeah, that's a lot. And so when we'd been doing our back of the envelope math, we had been saying if CMS's prediction that the market is flat, the MA market is flat, year over year comes true. There's based on everything we've heard from other payers. There's 1.3 million members going somewhere. And so we got some, we got an indicator of that this morning. It's like, well, they landed at Humana. And the other piece of the story that we'll get to you later is the center well, their provider group and the Medicaid platform, which is part of the story that needs to be true and what they were telling. But yeah, I left the call. I would say more optimistic for Humana than I felt before the call when I just saw the numbers at 6 a.m. this morning. Yeah, for sure. Some of the data points they shared that I thought were particularly interesting on growth and why they were excited, happy about it to your plate, retention was up 5% year over year. Always good to retain. Members in this strategy that going down to 70% of new sales were competitive plans, which they noted on average have better economics and then also noted, well, there's this question of competitive plans are exiting the market. Is that actually bad risk that they're shifting to you? Humana noted that only 12% of members from plan exits went to Hibana, which is less than their market share. Obviously, the Medicaid-advanced market, pollution being, they didn't get disproportionate. Share of those plan exit numbers. Interestingly, that data point is slightly different than how they frame the other data points. All the other data points are, this is what are new sales, like 70% of our new sales was X. This was 12% of plan exits was X. I don't know how to square those two numbers necessarily in terms of what that overall impact is versus other members that these plans shed because 70% of them are from competitive plans. And so there's a disconnect to me in those two numbers of like, so you've got United, you've got others saying, hey, we happily shed this membership to get to profitability to margin. And then you've got Manna saying, we took 70% of our new sales from those plans and we're actually good too. And it's like, I don't know how to square those two things. - Yeah. - It's hard to, if you think, okay, there's maybe 1.9 or 2 million people who were part of plan exits. Some percentage of them, you get a special enrollment period for MediGap if your plan exits. And so some of them probably went back to traditional Medicare. I 10% of that or 12% of that, you know, that's like almost 250,000 people. - Yeah. - But overall, as we wait for the February enrollment file, which should be dropping any day now, it seems like a pretty good story. So I think that there are three big questions that this brings up. And I think the first one is, what does this mean for humanity, excuse me, humana's strategy, what does it mean for humanity? - Humanity, that's the first step. - But also for humana's strategy, vis-a-vis the other MA plans in the market, especially the big ones who you already heard report. And I'd be curious to hear your reaction to that. - I, you know, he meant that they're invested if you go back and look at their slides, they have their EPS wrote between 2025 to 2028, right? And they didn't put numbers on it, but they had 2025, 2026 goes down, 2027 is almost flat. 2028 is the year where humana feels like it's gonna start to hit, it's stride again. And we heard him one analyst question like, okay, so 2025 EPS was what, 17 in change. 2026, they came out at about nine bucks a share. They noted that's conservative setting up them well, I would think to exceed that expectation. And then the last analyst was like, hey, what gives this feels lower than we expected for 2026? What changed between December when you did a Master presentation and today? And the answer was nothing really, it's just more conservatism for us in 2026. To me, it is, the narrative that humana's going with right now that feels like it is a little bit of a zicking while everybody else is zagging is, we believe in the lifetime value of these members. We believe we have constructed our plan portfolio profitably. So they say that a couple of times in the earnings call, right? And this has been a talk track that they've had historically that they have been making product changes for years now where they think the entire plan portfolio is generally speaking profitable. They don't have lost leading plans. And that's an interesting part of their narrative. And it's what feels different than other MA plans. I heard this a little bit and one of the question and answer an analyst asked about how much of the membership moved from competitive plans into your PPO plans and what's your membership mix between PPO and HMO? And humana said, we're not going to share that number, but we feel good about profitability for plans on the whole. Which kind of begs the question, the industry has moved away from PPO plans in the last few years because they're generally more unprofitable. They're harder to manage costs on, yada yada yada. They moved HMO plans because it's a more profitable plan design. Humana is taken a slightly different approach, it seems, with what they think they can manage profitably and what membership looks like. And they are trying to, well, I don't know that they were trying to grab this much membership. Like clearly it came in above expectations. But nonetheless, they seem to think that they can manage this membership profitably even the new membership, right? It was interesting to hear them up front talk about, new membership is going to be a feat of the enterprise, not to individual MA margins specifically, but to the enterprise on the whole. So including some of the center well assets, they get to margin positive. But the new membership actually looks the same as the existing membership from a margin profile because the new membership benefits from being 70% in stars plans. The existing membership is, they were expecting, I think, around 20%, 25% in four star plans. They should say, excuse me. So that benefits the new membership margin, while MLR is higher on new membership and lower on existing membership. And so it nets out in the wash to be slightly negative this year. But then they're like, hey, we're doubling our margin this year aside from the stars issue. And we're going to keep on that path. And it's like, that's a pretty reasonable story. Obviously it runs counter to the story. We've heard the last couple of years, any experience we've seen with other plans. And I think that invites the skepticism here. But as they tell the story, if I didn't know what happened in the industry last few years, I'd be like, OK, I, you know, sounds good. I don't know. What do you think about strategy and how it relates? Yeah, I think that it's a-- I mean, it makes sense as a strategy. And if you're looking for a non-consensus bet, this was sure at, right? I mean, this is really the thing to do. I do-- so much of it's going to come down to execution. And I think that, you know, listening in this morning, it's easy to get bought in. And then you think back to what Humana has looked like over the last couple of years. And it's been a story of missed opportunity. for execution, especially around stars. And then, and that's the hardest piece of the puzzle, I think, to know how that's going to work vis-a-vis the other plans, because stars is a competitive game, and you're playing against other people who also have an incentive to work really hard on stars. Yep. It's interesting that playing on stars, like to your point on operational execution and combining it with stars. The whole name of the game is predictability consistency for the market, right? Like we know what we're doing, we can predict this membership. We've got our hands around what's happening in 2026. It is interesting on that point to go back to their planning, their investor day conversation in that, in that EPS curve, I mentioned, and seeing them on that EPS curve, I'm looking at the slide right now, slide 115 from their investor presentation. 2026 assumes 25% of Medicare Advantage members enforce our plans. They're now at 45%, because 70% of new sales came in enforce our plans. That's a boon for profitability in 2026, certainly, but is also indicative of, that's an entirely unexpected event, right? Or it's upside that they weren't sharing with the market and their 2026 plan. But to me, it's indicative of this question of how much is this actually is planned and they're executing against a plan and they know exactly what they're doing versus we're flying by the seat of our pants and we're going to get a new data point when we have key one earnings springtime and see what's happening. Yeah, and we'll never know how much of this growth was intentional versus getting off sides in some of their markets and we just won't ever know. But I think that that is another thing that you could question around the operations and execution point. The other question that you and I were chatting about in the immediate aftermath of the call was around what, you know, the long shadow of the advanced rate notice for 2027. Jim brought it up a couple times on the call analysts had a lot of questions about it. That's for 2027. I'm curious what you're seeing the interaction of all of this growth running into 2027 with a potential headwind from an advanced rate notice of nine basis points. So there are two things that I think are staying in this. The main is related specifically to mana strategy to is the negotiation that may or may not be occurring between plans and CMS kind of in this interim period between advance and final. The least convincing answer I heard on humana's earnings call today was the question about 2027 the rate notice and you're hearing all of your competitors say we're going to price for margin and we're going to be okay with where membership nets out because we've got to get back to margin. And the analyst asked how what is your position on that because humana kind of glossed over the details and said we're going to respond to it. We're going to do what we need to do. But like when your strategy is we're going to retain all of this membership because we need to benefit from the lifetime value and that lifetime value equation is what is so important and we need that in 2028 that is a bit incongruent with we're going to we're going to optimize for profitability right like you would you would you would do two different things in a world where rates are constrained dependent on what you are prioritizing. And humana's answer to that was kind of a we're going to do both like we need to retain our membership. That is our priority. But also margin is our priority and it's like I get why both of those things are priorities when push comes to shove you might have to pick one. And if the rest of the industry pulls back on benefits in 2027 what does humana do? Does it prioritize retaining member and not pull back as much and risk getting more members in from those other plans? Is that a good thing because in 2028 they then get to benefit from that. I mean there's a whole host of questions in terms of what all of this means for their 2027 benefit design that have to be fascinating if you're if you're in humana's teams right now and this was kind of the question like when are you going to get data on 2026 and can you price that into 2027 so that you make sure that you're you're progressing towards your margin targets. Like that is got to be really really challenging exercise for humana actuaries at the moment. To me that is interesting part one I'll do part two quickly then I'd be curious your thoughts on them. Part two is if I'm CMS leadership and I am listening to CVS and Manas earnings calls the past two days. Humana essentially said hey like our long term story is fine regardless of the advanced notice we're happy with advanced notice we think that it doesn't reflect margin or trend in the industry and we think it should that is going to be a bad thing for seniors they understand that the administration is trying to balance fiscal sustainability with a very popular program but it's not reflective of the reality of trend CVS had a very similar narrative of it's not reflective of trend interestingly humanity they mentioned in analyst asked and I think they asked you knight of this to the other day does this disproportionately impact you the changes to risk adjustment and humanity was like well no it impacts everybody kind of the same which if you listen to what CMS has been saying by trying to level the playing field if you've got humanity saying everybody gets impacted by this it's interesting to think about the implications of that for competition when this is effectively a rate cut for the industry and what that does smaller players. Going back to CMS in this negotiation if I'm hearing this and I'm hearing humanity and CVS say hey this is an issue but our long term margin targets are still intact like we're going to be okay through this Wall Street don't worry about that I'm sitting there going well why is this such a big deal like your margins are intact I'm sorry that you lost 100 billion dollars in market cap public companies like that's not great but we've also got a budget crisis in this country and we are trying to be responsible stewards of taxpayer dollars like I think it lends some credibility to that argument on the CMS side of the world and I don't know what to like I don't know what to do with that Trump's the broader negotiation because I think it's an issue when the plans are saying hey like we're still going to be good in 2027 now they're obviously going to pull back on benefits to to make that happen which seems like it might be a political issue but I don't know what's your take on all that negotiating that I think. I do think if I was working for a humana government relations I would say look we're penciling and I just looked it up it's a 92.75 percent for benefits ratio and you know plus or minus 25 basis points and our operating costs consolidated it includes center well 10 percent and so I don't know again like depending on how you you do the accounting they're losing to 0 to 3 percent on their insurance business right now and that's not sustainable. Now what they're the bet that they're making and if I was CMS I would reply to that and say well why are you growing so much maybe you should just answer the phone when we see Chris shop you. But yeah I mean part of the humana story here is saying like yeah we're going to we're going to manage this influx it'll be better next year we'll add back in the stars hope that rates come in where they they will and in the meantime we're banking on interest income and center well to keep us in the black and that is a precarious spot to be in the take I think it's like a new once conversation if you're an M.A. plan working the government affairs like work on CMS on this but it is I think not popular but fair to say that the insurance companies are getting hammered right now the margins are excuse me very thin and a nine basis point growth rate from 26 to 27 is probably not going to be adequate for margin recovery for the modal plan net of stars. Yeah for sure. It's fascinating to think about this in the context of we were talking in the community yesterday about Elizabeth Warren and Josh Holly's bill trying to break up big for profit healthcare and separate out insurers versus care delivery versus pbums and it's like okay play out what happens with humanity. Humana like as an organization they would they would absolutely not be able to sustain losing margin on just the insurance business if you separate it out so guess what would happen you would have humanity have to pull back on benefits raise prices etc and I don't think that's a great outcome here to your point like insurance business has been really really hard to operate. They, in part, have built these complicated structures to both the benefit, the end consumer from their perspective and also to figure out how to manage the healthcare dollar. And that's what he meant is trying to do here, right? They are trying to better serve members, create higher lifetime value for themselves, but also by creating a better experience for their members. They increase retention by 5% this year. That's pretty incredible, right? Not nothing. Yeah, I'd be kind of curious to hear if you're, you know, thinking about the political economy of this. It's like the government with a nine basis point improvement that's contemplated the advance. It's basically asking MA plans to make benefits much less rich because, you know, Humana, during this call, Jim was talking right to the investors who are saying, "I know you're worried and the thing that we're focused on is margin." And we can't do anything about, I mean, you didn't say this, but he's implied. We can't do anything about margin going into 2026. Our insurance margin is going to be bad, but the lifetime value, the story that we're telling there is that this is going to be a creative to the business and to the enterprise. And so the thing that CMS seems to be asking a company like Humana is, "Make benefits less rich. Manage care better." Go to the hospitals and tell them, you know, another thing that got brought up quite a bit on this call was negotiations with providers. And it's funny because Tenet is reporting right now as we speak. And they did 39% margin, even the adjusted EBITDA margins in their ambulatory surgery centers. Good for them. Good for them. And 15% in the hospital and the inpatient. And that to me is like that's where the fuck is going, right? That's what CMS is seeming to be asking is that we're not going to be able to do this with Medicare rates. And so we're telling Medicaid and Medicare and private payers they need to go and solve the cost problem. Yeah. I mean, it is definitely interesting to think about how it flows through in the political implications of that. I mean, if at the end of the day, this is the federal government saying, "Hey, we can't afford to spend as much as we are in healthcare as a country. And we're going through a hard period trying to figure out how we're doing that. And we made cuts to Medicaid that were hard. But as you've heard us say on multiple occasions, he actually thinks Trump is saving Medicaid because putting it on a better directory. It's still increasing in terms of cost, just not at the rate it was. You could also see them saying, "Hey, like we need to put Medicare on a better trajectory over the long term. This is what we're doing here." And then yes, like you've got to flow down for that. If you set it on this new trajectory and plans are like, "Hey, CMS, like we're out of business. We've heard CMS say they still want competition. They still want to support the market." So if you're a CMS leader, what do you have to do next? You've got to go down, you've got to go down three, right? If payers can't sustain themselves with a little bit of play, we're not talking about massive 39% margins here. We're talking about like, eke it out, 2% 3% margins. Like that is what humanity is trying to get back to in its individual and a business, right? Three to 4% margin range. Like, we're not talking at even 40%. Okay, so go downhill from that. Where are the key cost drivers and that? You've got to be looking at farmland and hospitals. To your point, not tenants, earnings. And I'll be curious to see how far this conversation makes it because the risk, as always, is the insurance companies pull back on senior benefits around election time and people do not like that. Yeah. I don't know. I wouldn't like it either. That is, I think, the many ways people talk about Medicare, Advantage being one of the most successful public-private partnerships. And what it does is transfer so much of the accountability from the government to a humana and a United Health Care and says like, we don't really want a ration care, but your investors will make you ration care because they will stop giving you money. If you don't, and I'm looking at this MBR of 92.75 and saying like, it is just very hard. Even if the most disciplined, I think the insurance plan with the most, the lowest SGA ratio is Molina. And that's in the high sixes. There's just like, I don't know if I said that well. Yeah. Mixed up. Yeah. But not comparative. But like, there's just like even the most beautifully run MAPlan is going to have trouble doing care management when medical benefits are coming in at 92.75. So yeah. And you've got brokers to pay on top of that. Like you've got all of these other things. A lot of mouth to happen anyways. Yeah. Okay. Point number three that came out of this. And this was a quick one and then let's, I think we kind of move on to the bull in their case. But CMS said, hey, we think the MA market, so when plans put together their estimates, they were expecting the MA market to contract a little bit. And CMS, when they released the announcement last fall said, we actually think it's going to be flat, you or a per year. And that's been driving the math that you and I have been doing where we take all of the announcements for growth or contraction. And that's how we got to 1.3 million left for Humana and the blues. And so I'm curious based on this announcement, do you think we are contracting flat or growing MA a little bit this year? I'm more interested in hearing your answer to that question. But my, like my quick gut read is, I wonder if it is in fact growing ever so slightly. And that, I mean, we talked about predicting Humana at 1.3 based off all the math that you are doing. And I think you should walk through that. I, to me, there is a question now of hearing Humana talk about how they're talking about their new membership coming in and how the market's reacting to that. And the fact of the other big players have shed their unprofitable ownership and how the market is reacted positively to that. There's a gap between it, like it feels like there is a group of members missing, which is the unprofitable lives, right? And I don't know how big that group is, but it feels like we have not accounted yet for a number in that, which would indicate that the market is growing slightly, right? That's my conclusion from it. What's your take? I'm going to sharpen my pencil on this a little bit more and try to divine what Jim was talking about when he said we took 12% of the net exports from, so I'm going to sort of put a pencil or put a pen in that and get back to you. But I think that this points to a likely modest growth in NA. And the reason for that is that 1.3 million figure, we were, we were promising that on the same, humana plus regional nonprofits. Regional nonprofits in NA is an interesting thing because they should almost never grow. Given an MA, given a regional nonprofits, MA, business and their finances, there's very, there's very few instances where you would say like, yes, you should be adding lots of membership. But they do anyway. And I think, you know, I think you could probably pencil and pay 100 or 400,000 for regional nonprofits in local blues. There's been a ton of M&A in the, the local and regional nonprofits base. I'm sure someone is saying excited about growth and has a story for their board. And so yeah, I think we're looking at, we're looking at continued MA growth year over year, albeit pretty modest. Yep. So if that all is true, it's another really interesting data point in my mind for this CMS final notice negotiation that's happening with the industry, which is if you take that data point, you take the fact that regional plans are already hamstrung financially across Medicare and Medicaid. And we've already seen some plans shutting down, being acquired, et cetera, because they can't sustain their margin. And you accept Humana's point at face, which is the rate reductions are not disproportionately impacting larger players, like they were seemingly intended to do to level the playing field around risk adjustment. What that would implicate or the implication of that, if CMS isn't indeed trying to drive competition in the market and wants regional plans, smaller plans to coexist alongside with she'd been at the. united. 2027 is going to be a real issue. Like we're going to have a whole bunch of regional plans really struggling to digest some potential new membership. Their existing membership, it's going to cause more financial pressure on them and cause more chaos in the market versus versus less stability, predictability, more competition. So I think that's going to be really interesting that name. Yeah, it'll be interesting to watch. And again, we'll have a better sense for all of this when the February, uh, and a enrollment file drops. So looking forward to that should be any day now. Let's wrap up and just talk a little bit about the bull in bear case. I guess you would say for humana. And I want to do that both in 2026 and also in the long run. And so 2026. Kevin, give me your your your bull case for for humana. And then what about for the longer run? So I think if I were articulating it, um, market right now has priced in all of the downside and all of the risk and there's a lot of skepticism. This is not investment advice. Don't nothing is ever investment based off of this. But I mean, humana is trading it what 180 bucks a share. Like it is it is, uh, trading in a low already, um, there's a lot of skepticism around whether or not humanity could adjust this membership. And on the bull side, everything they're indicating is solid data points that they have done this quite well actually, right? The new membership, how they're coming in the retention of existing membership. They're not taking plan exits, 30% of the sales are bounce back members. They're acquiring them via higher lifetime value channels, better sales channels than they typically have. All of that is the right things to be saying. They seemingly are investing in getting to know these members earlier in the year, which should give them better data. They talk about being friendly to their VBC providers and having good relationships there. All of that is indicative in my mind of outperforming what they have acknowledged as a conservative target given the market dynamics this year. So it's not hard to see a scenario play out where they've actually got their hands around this. They have intentionally settled a target right now. The market has priced all of that in and is worried and they're going to start to be. So 2026 that starts to tell the narrative. And then they are positioning themselves and they did this on Ernie's call multiple times for 2028 is really where we hit our stride. But acquiring this new membership now and moving them along gets us there. And the stars number for this new membership, getting 70% in four star plans already versus the baseline of 25% for the business. So the blend is 45% like that actually puts them seemingly in a good spot. And they're working on operational expense and have opportunities there. They talked about how they're reallocating some of their corporate structure and whatnot so that the capital reserve requirements are actually that much higher. They've found enough dollars by streamlining to offset the requirements for new premium. Like I actually think that's a pretty compelling case in my mind if you believe that they are going next to you on it, right? Yeah. How about you for bull? Yeah. So I put together a quick financial model here and the insurance margin like they if they beat their insurance margin. Right now they're saying flat to slightly improbable. If they come in even 50 basis points favorable, that would be an additional $775 million in insurance income. And that I think really changes the story. And so if you look at their guidance, they are their $9 earning per share target is all at the low end of their guidance. And so at the midpoint, they're looking at like 10 and 50. And at the high point of their guidance, looking at 12 bucks a share. And so I think that yeah, I think like the in year 2026, you could see between the retention and the bounce backs better MLR than expected. Maybe there is some, you know, it's a little bit of the Empire Strikes Back where the coding wars start to tilt back towards towards pairs. And yeah, I think it's a totally believable story. And then Centerwell performs a little bit. And like you are like you're sitting very pretty if you're humanity going into 2027. And if you have a good start year, then it's like a it goes from humanity being sort of the punchline to humanity being the story to watch. For sure. I mean, this is the like it was always this humano leadership is either going to come out looking brilliant out of 2026 or they're going to lose their jobs. And to your point, like maybe they've actually threatened the needle here and they actually they they have it right that they're going to acquire these members and they're going to get the lifetime value right and they've priced their plan as I'm right. And off you go. Yeah. Bear case. Yeah, I think there's just very little margin for error on the strategy. So Centerwell needs to perform. They need to actually break even on their insurance business. The challenge for insurance companies over the last couple of years is they've missed their MBR guidance. They've come in hotter than expected medical trend has been higher and stuff's been more expensive. And the reason for that isn't hard to find again, talking going back to tenant 40% margins in their ambulatory. It's like, yeah, if someone's if someone's making a killing there, then it's going to be harder for you to to put that together. And so I think that the what strikes me as a plausible scenario is a miss in 2026 just because this is like a tough needle to thread, but they set themselves up really well for 2027. Just because this year they have to execute on center well, they have to hit break even there could be some surprises in there. Medical trend is hard to anticipate. It the being in the care delivery business is a tough business to be in and sometimes you you know, you get hit with some surprises. And so you can imagine a scenario where 2026 is going really poorly. They make a change in management and the change in management inherits a really nice scenario for the long run. Yeah, I it's an interesting perspective on it. I like I yeah, you can you can see these there and it's playing out for time, right? Like look at CBS, which had a very similar get had its issues in this price product and saying new data free comes in slightly just strategy and tweaks it away from insurance to the overall enterprise pharmacy story retail story, et cetera. And you're actually well positioned to then beat and exceed and have a nice runway coming out of the the challenge United's earlier an industry, but similar kind of getting back to execution going forward from there. Yeah, I I it's it's not hard to take the the bear side of like 2026 isn't going to go well, they don't have their arms yet around this membership. As that comes in this new membership is going to be less profitable than they expect and it's going to cause challenges throughout the business. On top of that like we didn't spend a ton of time talking about the pharmacy business and it's a little bit of a head scratcher for me like where I mean they talk about the fact that new members are not profitable in in the insurance business, but it overall it's going to be a creative to the enterprise. And I look at that and I'm like VBC primary care wow center well seeming they've been doing it well like third year of V28 implementation seems challenged. I don't know what profit margin they're getting from new members in that book of business in 2026. I would be surprised if it's profitable given every j curve on every VBC business is not. And then you've got the pharmacy business where you've got like a malina saying they're exiting part D in 2026 right 2026 right because of the challenges in that market. And I'm just like I that clearly wasn't the focus of this call because of how much of the focus was on membership, but I don't know Martin. So okay 2026 doesn't go as planned you have profitability issues causes challenges and I think that's the thrust of the bear case. Even if you make it through 2026 advance notice and a final notice now presents a challenge in 2027, which is hey if they have to get if they have to continue improving margin, which means they have to shed membership to as they pull back on benefits does that undermine the long term growth case of hey the LTV is what really matters here and we're focused on retaining our membership. So to me that's both like the there's a near term bear case that's sent around what's going to happen with this new membership in 2026 then there's a longer term bear case of the entire play is on retention of members and stability of benefits over time and a market that is potentially going to have to reset as CMS changes into approach. I do think whereas like coming into this, I was probably 80, 20 or 90, 10 on bear case playing out and this going poorly. I think this earnings call was a really positive step for them. Like I am, I am certainly headed more towards the bull case. I'm not at 50, 50. But it is closer to, I mean, I'm what, 60, 40, 70, 30 versus 90, 10. So it was a step in the right direction for them today. Yeah. To me, it all, not at all, but a lot of this comes down to Star's performance too. Star's is going to be so indicative of how they're managing stuff internally and Star's is hard. It's hard because it's, you know, their quality measures, it's hard because it's a game that you play against all of the other plans in the market and you're graded on a curve. And so you can work as hard as possible on, on Star's and do your very best and you can still get out competed by someone else. So yeah, I mean, we're going to start to get some interesting data points for Humana between the final notice, the final and the sun rates. And then we'll have a better sense for the puts and takes on their membership movement when we get the enrollment file. And then I think Star's is really going to be the next event to watch outside of their earnings calls. Mm-hmm. For sure. It's going to be fun. All right. Thanks, Kevin. See you tomorrow. Bye.