I'm Jennifer Gilligan, Centene's Senior Vice President of Finance and Investor Relations. Welcome to Centene's 2024 Investor Day. We would like to thank the investor community for graciously embracing our format change to virtual and for the kindness and empathy you've shown. Now, some easy reading. Various remarks we make today regarding future expectations, plans, and prospects constitute forward-looking statements under U.S. securities law. Actual results may differ materially from those indicated by these statements as a result of various important factors and risks, including those discussed in the slide you see in front of you, as well as risk factors contained in our most recent annual report and other SEC filings. Centene disclaims any obligation to update this forward-looking financial information in the future. Additionally, during this presentation, we'll discuss certain non-GAAP financial measures.
A reconciliation of these measures to the most directly comparable GAAP financial measures can be found in today's slide presentation, which is available on our website at centene.com. Today, our Investor Day Community Spotlight shines brightly on Feeding America. Centene proudly partners with Feeding America, a dedicated nonprofit striving to enhance access to nutritious food and foster economic security. Feeding America advocates for policies that simplify food access through an extensive network of partner food banks, pantries, and community organizations. Using the QR code on your screen, we invite you to join Centene in support of Feeding America and the important work they do across the nation. We've abbreviated today's program to acknowledge the tediousness of sitting for several hours in front of a screen, and we look forward to providing a more traditional Investor Day program next time we are all together in person.
So, with that in mind, here is what you can expect from today. First, we will provide some prepared remarks. Sarah London, our CEO, will walk through the unique opportunities we see for Centene and why our asset base is uniquely positioned to capture them. Jon Dinesman, our Head of External Affairs, will then cover key topics shaping the political landscape. And finally, Drew Asher, our CFO, will provide a detailed look at our financial guidance for 2024 and 2025. Following these remarks, we will return here to the auditorium where Sarah, Drew, and a few others from our leadership team will host live Q&A. Covering sell-side analysts will have an opportunity to ask their questions on the webcast. Others can submit questions through the chat function on your screen, and we will do our best to get to some of those as well. Now, let's hear from Sarah.
Thanks, Jen, and thanks, everyone, for joining us today. It would be an understatement to say we are operating in unprecedented times. 2024 has been a long, complicated, and now tragic year for the industry. I'd like to start today with a moment of silence for Brian Thompson. Healthcare is a big industry, but a small community. Today, we stand with Brian's family, his countless friends, and with our colleagues at UnitedHealthcare in remembering a good man and father, a great leader, a thoughtful competitor, and a friend. Thank you. I also want to start today by thanking the thousands of people within CenTeam and our many community partners who are dedicated to making healthcare better for millions of Americans, including populations that are too often underserved.
This is hard work, and yet I see this team every day on the front lines and behind the scenes, deeply embedded in our communities, going above and beyond to address barriers to care and find solutions. I am grateful for your service to our members and your unwavering commitment to our mission. As we prepared for today, it was tempting to take you through a list of all that Centene has delivered on our three-year value creation journey, reminding you about 11 divestitures, more than $7 billion in share repurchases, more than $800 million in SG&A savings, a monumental PBM conversion, an historic redeterminations process, explosive growth in Marketplace, and meaningful Stars progress. But instead, I think it's time to call the ball on the value creation program and tell you that we did what we said we're going to do, and we're not done.
It's also important to point out that despite industry-wide business disruption, Centene remains on track to deliver more earnings in 2024 than we committed to a year ago. So today, I'd like to ask you to focus where Centene is focused: forward, on the incredible opportunities we see ahead. To that end, I'm looking forward to spending our time together this morning, turning the page and sharing with you the ways in which our hard work over the last three years has created a resilient, diversified platform uniquely positioned to deliver earnings growth, capture exciting new market opportunities, and change the healthcare experience for our members. Let's start with the basics. Stability in earnings power in the face of unprecedented headwinds provides Centene with a solid jump-off point for 2025 and beyond.
As you've likely seen by now, we've issued 2025 adjusted EPS guidance of greater than $7.25, representing more than 6% year-over-year growth compared to this year's current outlook. We are using today as an opportunity to set the floor for 2025 guidance, inclusive of an expectation for a 3%-4% Medicaid composite rate adjustment. Drew will provide more detail on our financial outlook and the embedded earnings power of the business later this morning. In addition to 2025 guidance, we want to provide you with a simple framework for thinking about the road ahead. The political landscape, potential policy changes, and an evolving healthcare ecosystem can create noise, making it difficult to hear the signal that will tell you how strong the fundamentals of this business really are. Centene's path forward is as simple as one, two, three.
One CenTeam, two significant disruption opportunities that are poised to drive growth for three core businesses packed with embedded earnings power. After a tremendous amount of work in the last three years to focus the organization, fortify our infrastructure, integrate and automate our operating model, and build out our talent bench, the new Centene is stronger, better, and faster than before, and we are just getting started, armed with a chassis that can accommodate forceful future growth as we continue to optimize the business. The most important part of that chassis is our team. The single thing that gives me the most confidence in our ability to capitalize on the embedded earnings power and growth opportunities in our business is our CenTeam.
Over the last three years, we have added next-generation leadership talent, some of whom will be with us for Q&A today, and through an intentional focus on building a One CenTeam culture, we have elevated and unleashed the power of 60,000 individuals who uniquely understand how to serve our members, and to a person, are here with the goal of transforming the health of the communities we serve, one person at a time. But in the words of LeVar Burton, you don't have to take my word for it.
Whole health, to me, is about how we incorporate a person's entire sense of self and well-being into their healthcare journey. It's not only the physical health concerns that they face, which are often just a visible part of their well-being, but also some of those more invisible pieces like behavioral and emotional health, social health, which is focused in particular on some of those non-medical barriers that often have the greatest impact on our health, so things like housing instability or food insecurity. Social care coordination is about embedding that social aspect of health into everything we do in every place that we encounter the members so that we can best support them.
At MHS, we strive to ensure that our members' needs are able to be met in the moment that they're identified. We call this the no-wrong-door approach because that ensures that members never interact with someone in our organization that is not able to get them to the right place to meet the social care needs that they're identifying. We have a social drivers of health team that implements those programs, and those programs address food, housing, transportation, education, and workforce. And then if we find that the members' needs are complex or require additional support, then we have a regional partner that is able to meet members in the communities where they live, work, and play.
I became a community health worker in 2019, and a lot of it was based off of my lived experience. I truly wish that the connections and resources that I'm able to provide members now is what I had at that time. I wasn't truly looking for clinical support. It was more of the social support, which is why I went into becoming a community health worker. My role now is to build out programs. Buckeye Healthy Homes is to help members who are diagnosed with asthma. So we want to make sure that our members that are diagnosed with asthma are able to have the interventions and resources to be able to reduce those in-home triggers and to reduce their emergency room utilization.
I think personally of a very close loved one who took years to get access to the benefits and the care that he needed and that he deserved. And so when I do this work, I think about him, and I think about how hard that process was for him to navigate and how far he's come. And I think it's the same for anyone at Centene. It's about building trust in these relationships with our members so that we can truly be of service.
This work is deeply personal to me. I was raised in a family that experiences generational poverty, and I have been the beneficiary of many organizations that address social drivers of health. I think members benefit because I'm able to understand where they're coming from, and so today, I have a career that I self-selected into and absolutely love.
There may not be a cell in your models for this, but you know as well as I do that people are the X factor in any business, and my confidence in this CenTeam and what we can accomplish has never been higher. It is because of the talent, expertise, and commitment of this organization aligned around a single, simple mission that we have been able to deliver results despite unprecedented headwinds and build valuable momentum to tackle the opportunities ahead. Which leads us to number two. We are often asked, what are investors missing about your story? Beyond powerful fundamentals, more on that to come shortly, the answer is that we have two exciting growth opportunities that sit right on top of our core platform of Medicaid, Medicare, and Marketplace. These are Duals and ICHRA. Let's start with Duals.
We often tell you that our business mix is not only unique, but also well-positioned for growth, and the Duals opportunity is a shining example of powerful growth potential that sits right at the nexus of our core businesses, providing Centene with a serious competitive advantage. Dual eligible refers to members who are eligible for both Medicare and Medicaid. In the current healthcare ecosystem, these beneficiaries can be unmanaged, partially managed, have their benefits managed by multiple carriers, or in what is increasingly seen as the ideal state, these members have both Medicare and Medicaid benefits coordinated and managed through one entity. Efforts to create alignment for Dual eligibles refers to the coordination of benefits across both programs, improving the quality of care and smoothing the experience for members.
With more than 750,000 unaligned Duals in our Medicare and Medicaid businesses currently, we see significant opportunity to advance care management, improve member engagement and experience, and generate cost savings through Duals alignment. This is why we have been refining our Medicare footprint to overlap more closely with our Medicaid presence. It is also why we are even more confident today about our intentional focus on low-income complex populations than we were when we laid out our strategic plan in 2022. In April, CMS demonstrated additional support for alignment by finalizing a rule that is aimed toward increasing the percentage of D-SNP enrollees who receive Medicare and Medicaid services from the same organization. As the rule stands today, it limits new enrollment in certain D-SNPs to individuals who are also enrolled in an affiliated Medicaid MCO beginning in 2027.
Beginning in 2030, individuals must only enroll in a Medicare D-SNP plan sponsored by the same carrier as their Medicaid MCO. In plain English, if you are a Dual in 2030 and these rules remain in place, the insurer who provides your Medicaid benefits will also support you in the Medicare program. What provides Centene with an advantage in this market? Footprint, focus, and far-reaching relationships across our markets. With the largest Medicaid footprint in the nation, we have proven infrastructure ready to serve more members than any other player. This infrastructure includes Medicaid-centric networks with community health centers as long-standing partners and with a network of community-based service providers that are integral to caring for the Duals population. We are the only managed care organization with a dedicated focus on low-income, high-acuity members.
With this focus comes deep expertise in the evolving needs of often underserved communities across the geographies we live and work in. And finally, we have deep, far-reaching relationships that enable us to understand and help inform the conversation as our state partners determine their approach to this complex, often fragile population. There are more than 12 million dually eligible beneficiaries nationwide, and approximately 10 million, or 80% of those Dual eligibles, live in states where Centene currently serves the Medicaid population. In other words, as the largest managed Medicaid organization in the country, we already have the unparalleled proximity. We have the right capabilities in the most markets, and we will continue to place enterprise-level focus on the Duals opportunity to drive long-term growth. Now let's turn to ICHRA. ICHRA stands for Individual Coverage Health Reimbursement Arrangements.
ICHRA plans allow employers to offer a tax-free stipend to employees in lieu of health insurance. With the stipend, employees can shop on the individual marketplace and choose the insurance plan that works best for them. Think of it as the health benefits version of moving from a pension to a 401(k). We see meaningful opportunity for ICHRA and further dislocation of group insurance for a number of reasons, starting with the fact that many employees today don't want the same options their parents had. As baby boomers move more fully into Medicare coverage, the commercial market is increasingly made up of consumers who expect transparency, customization, choice, and convenience in everything they do. They inherently recognize that healthcare isn't a group decision. It's a personal one, and they want in on the process. We believe this market will break the same place it did for 401(k)s.
Just ask your CFO. Employers today are facing 7%-9% increases in costs from providers and pharmaceuticals. With a never-ending pipeline of high-cost drugs, that math is only going to get harder. And then there's the volatility. It's not a difficult exercise to find the employer who has responsibly budgeted for high single-digit increases and experienced a double-digit impact. We see individual market products like ICHRA as the solution to balance the modern employee who no longer values a one-size-fits-some approach to healthcare with the realities of rising healthcare costs for employers. Using an ICHRA allows employees to tap into a more competitive health plan marketplace and a larger risk pool, creating stronger potential for lower, more stable premiums while finding products that are more flexible, more portable, and better fit their needs.
And because employers can define their contribution levels, they can better predict costs from one year to the next. Let me give you an example. In Franklin County, Ohio, CFOs and business owners could transition from $772 a month in small group premiums for an average 27-year-old employee to $308 for a silver plan in the individual market. That's about a 40% reduction in premium, and their employees get flexibility in choice of benefits and carriers with a competitive choice of providers. Because ICHRAs are part of the same risk pool as the ACA, this market will evolve directly from today's individual marketplace. The same marketplace where Centene's Ambetter is the far and away leader and has been for over a decade. We expect large-scale ICHRA adoption will be a journey of several years, as disrupting entrenched programs often is.
Considering the small group health insurance market covers 62 million Americans and the full commercial group market covers 170 million, we see a healthy, addressable market over the long term. Our efforts to move this market are well underway. This open enrollment, we launched ICHRA plans in six states. These plans mimic small group offerings, providing the comprehensive coverage that members are used to from their benefits. Earlier this month, we announced a strategic partnership with Thatch, an online ICHRA platform, Allstate Health, and QuickBooks. This collaboration introduces more than 500,000 QuickBooks employer groups to ICHRA and Ambetter Health's pre-tax, off-exchange health plans. Our leadership and expertise in the ACA and individual market is unmatched. Our right to win in this space is clear, and aggressively pursuing this line of business is an easy choice.
Unlike some of our competitors, we face no internal conflict around group coverage. We believe in our individual plans, our network, our member experience, and our pricing, and since we've consistently had the top plans in the marketplace, we know other people believe in us too. In 2014, our Ambetter product launched in a nascent market, growing from 75,000 members in eight states to 4.5 million members in 29 states as of Q3 2024. We are market makers, and we are looking forward to doing it again. It felt important to highlight these two disruptive opportunities. First, because they are logical, organic, and compelling extensions of our core business, meaning we already have the products, services, and CenTeam who can support them. Second, because we have already proven they are real.
With our recent D-SNP wins in Michigan and Ohio, a Medicare book that is almost 40% Dual eligible members, and 750,000 unaligned duals across our Medicare and Medicaid portfolios overall today, the reality is we are already serving this population today at scale. On the ICHRA side, we have more than 33,000 off-exchange members today, and at least 20% of those are ICHRA members. But 100% of the 33,000 went shopping for compelling individual healthcare coverage that is affordable and portable, and they chose us. And third, because these opportunities aren't even in our long-term algorithm. They are increasingly real and increasingly compelling growth opportunities for Centene.
So whether you think of them as downside protection or upside to a 12%-15% long-term EPS CAGR, you are missing something if you don't see how a leading Medicaid franchise plus a Duals-focused Medicare business uniquely positions Centene to serve the Dual eligible population. And a number one Marketplace platform puts us in pole position to make the ICHRA market our own. Which brings us to number three, our core lines of business. Let's talk about the new Centene and our core footprint today. We remain the leader in Medicaid managed care, supporting more than 13 million Medicaid recipients in 30 states.
Medicaid is expected to represent 55% of our premium and service revenue in 2025 and consists of lower complexity lives within the program known as TANF, or Temporary Assistance for Needy Families, as well as complex lives across several programs, including Aged, Blind, and Disabled ( ABD), Long-Term Services and Supports ( LTSS), and Foster Care. As many of you know, the Medicaid market has experienced a period of intense disruption over the last 18 months, thanks to a nationwide redeterminations process of never-before-seen size and scale. As a result, we turn into 2025 with an equally unprecedented opportunity to harvest embedded earnings in our Medicaid book through rate recapture. After 40 years of managing Medicaid programs, Centene has this work down to a science. We built a data infrastructure that gives us the earliest possible view of how acuity and utilization dynamics in our populations are changing.
We saw acuity shift in the second quarter and were the first in the industry to call out rate dislocation in May. Similarly, in early September, we warned of further population shifts and the impact of the rejoiner premium gap. While seeing problems first isn't always fun, first to read means first to react, giving us the advantage of months and months of groundwork in our state discussions relative to what the data is saying. By leveraging this core competency over the last three quarters, we have been able to catalyze, yes, you guessed it, an unprecedented level of responsiveness from our state partners, with a back-half 2024 composite rate around 5% and solid movement on rates for the one-month cycle. We have not yet reached sufficiency across our portfolio, and there are states where we absolutely still have work to do.
That said, we are seeing important momentum and are confident that we can continue to support rate movement through active, data-driven engagement with our state partners. Ultimately, Medicaid rates will match acuity, and you should expect to see us make significant progress recapturing Medicaid margin as we move through 2025. The other exciting opportunity ahead for Medicaid is the organic growth available for this franchise. While roughly 80% of Medicaid membership is currently covered by managed care, 40% of overall Medicaid spend is still being managed in a fee-for-service model by states. Much of this covers complex programs like ABD and LTSS, which come with higher PMPM premiums and require an integrated whole health member support model that Centene has pioneered. These complex populations contribute to a TAM for Medicaid of 1.2 trillion through 2030.
Layer on the 5% organic CAGR we've seen in Medicaid overall for decades, and it should be clear why, even as the market leader, we see plenty of room to run. After a flurry of RFP activity in the last two years, Centene has locked down almost 60% of our member base until 2030 and won net new opportunities representing $1.5 billion in new revenue. This is a result of our industry-leading business development, our competitive advantage as an incumbent, and our uniquely local, integrated approach to transforming the health of the communities we serve. It is also why we are confident we can harvest compelling organic growth to power our Medicaid franchise. On to Medicare. Our Medicare segment is expected to generate about $22.5 billion in premium revenue in 2024 and is expected to grow to approximately $30 billion in 2025.
It's no secret that our Medicare franchise has been under construction. Remember, we were rebuilding a Medicare business before that became cool. Our commitment to this business was based on the view that a strong, high-quality WellCare platform would have a compelling long-term share gain opportunity in a Medicare Advantage market that is growing at a 7% CAGR and still has a 55% penetration opportunity into a total 2030 Medicare TAM of $1.6 trillion. We also decided to invest in this turnaround based on our view that Medicare and Medicaid would become more integrated in service of Dual eligible members, a hypothesis that has since proven true, and we have done the work to position ourselves for growth in the Duals market, as you just heard. Meanwhile, our Medicare turnaround is working.
Over the last few years, we have taken significant steps to create a Medicare franchise that is purpose-built for the future. First, amidst an unfavorable rate environment, we prioritized a return to profitability and leveraged the moment to better align our Medicare presence with our Medicaid operations. The result is a membership base focused on lower-income, clinically complex members who represent the fastest-growing subsegment of the Medicare Advantage market. This narrowed presence has enabled us to streamline operations with enhanced market density, a simplified contract structure, and network synergies between our Medicaid and Medicare businesses. Second, we've done a lot of work to fix our Stars program. We systematically redesigned our enterprise approach to quality, starting with administrative and operational domains and then moving on to our sales, onboarding, and customer service capabilities.
At the same time, we made a multi-year investment in people, process, data, and technology to support HEDIS and CAHPS results. Today, we are pleased to announce that following a successful appeal, we now have 55% of members in 3.5 Star plans or better, up from 23% last year and 46% reported in October. The overall result provides over $200 million of incremental bid economics we can invest in benefits for our target population and allows us to take a meaningful step in margin expansion in our Medicare segment for the 2026 bid cycle. Finally, we have demonstrated strong management of the segment in 2024 despite industry volatility. We continue to track in line with our expectations in Medicare Advantage, creating a stable jumping-off point as we turn into 2025.
Our PDP business has also performed well in 2024, seamlessly absorbing the impact of the Inflation Reduction Act and so far expertly navigating a second wave of IRA changes for 2025. Our target is to reach break-even in Medicare Advantage by 2027. Rates will be an important input to this trajectory, as will our STARS results. But we don't need to bet on Stars because we have other key levers that will help drive margin improvement. The first is SG&A, where we believe we can take 200 basis points out of the business through platform consolidation, operational efficiency, and optimization of our sales and marketing strategies. The second is through efficiency and innovation in our clinical initiatives, including through expanded value-based care relationships. Bottom line, as we turn into 2025 and look at the path from here to 2030, we are excited about our Medicare segment.
It will contribute to earnings growth in the short term in the form of margin expansion, and we believe it will provide both core growth and market share gain in duals longer term. Finally, Marketplace. What used to be a number three business for Centene has now reached the big leagues with more than 4.5 million members as of Q3 and over $30 billion in revenue projected for 2025. You can see from the slide the incredible growth we have experienced in this business, differentiating ourselves from our competitors through experience and service. We have also delivered strong, consistent margins and continue to target pre-tax margins of 5%-7.5% for Marketplace in 2025. Our footprint makes Centene the industry leader in the individual market, and we are excited by the sprawling opportunity set that we see for this market longer term.
All that said, we would be remiss if we did not discuss eAPTCs. enhanced Advanced Premium Tax Credits, also called eAPTCs, were extended in 2022 as part of the Inflation Reduction Act and lowered the direct cost of premiums for millions of Americans. The availability of the enhanced eAPTCs catalyzed growth in the Marketplace, and today, more than 20 million Americans rely on the Marketplace for access to affordable healthcare coverage. While the majority of Marketplace subsidies are permanent, the enhanced eAPTC portion requires a funding reboot at the end of 2025. As we think about scenario planning around this funding, we thought we would walk you through three potential outcomes to help you model. The simplest for our members and our business is a full extension of enhanced eAPTC funding as it stands today.
The cost of a 10-year extension, according to the CBO, is $335 billion, roughly the equivalent of one year of Trump tax cut funding. A second scenario would be the extension of the enhanced eAPTCs with some cost-saving modification. As an example, the program could be extended with the subsidy capped at 400% of the federal poverty level. Currently, the subsidies are not capped and are available at some level of funding to any eligible individual purchasing insurance on the Marketplace. As it relates to Centene, a mid-single-digit percentage of our Marketplace membership currently lives above 400% of the FPL, implying a mid-single-digit unmitigated impact. However, we would expect to be able to ultimately limit membership loss to a very low single-digit percentage with product adjustments.
Finally, if the enhanced eAPTCs are eliminated entirely, a scenario we view as less than likely given the widely understood bipartisan support for affordable healthcare coverage at the state level, we estimate that unmitigated 20%-30% of our Marketplace membership would be at risk for disenrollment during that initial transition year of 2026. For many states, the impact of eliminating the enhanced eAPTCs would be significant, and for Republican states who have not yet expanded Medicaid, it would be outsized. Across the country, the individual Marketplace, with the support of the enhanced eAPTCs, has become the coverage vehicle for low-income citizens. Consider the following. In Florida, there are 4.1 million people enrolled in individual Marketplace insurance plans. 98% of them rely on tax credits to make that insurance affordable.
In Louisiana, where the median household income is just over $45,000 per year and 97% of members enrolled in the Marketplace receive a subsidy, removing the subsidy for families at 300% of the FPL could increase their net premiums by almost 900%. Finally, consider a 50-year-old full-time restaurant server in South Carolina who makes $30,000 a year and doesn't have health insurance from her job. Currently, she pays $50 a month toward health insurance on the individual Marketplace. If the tax credits expired, her costs would more than triple. Failing to extend the eAPTCs is tantamount to raising taxes on hardworking, low-income Americans across the country and limiting their access to healthcare, which we all know is a critical factor underpinning job stability and economic mobility.
Moreover, in rural counties where the Marketplace has become integral to the healthcare infrastructure, the impact to rural providers of what will become uncompensated care could be catastrophic. So yes, we fully acknowledge the market concern around eAPTCs. We believe everyone should be concerned about the impact changes here would have on low-income Americans. We look forward to working with this administration to design a solution that will give small business owners, individuals, and families access to affordable, high-quality, customized, and portable coverage regardless of income level. Stepping back, this is a complicated industry, but for us, it's a simple recipe. We have one team that has done the work to streamline and strengthen our business, has built an operating model worthy of Centene's size and scale, and remains laser-focused on our mission, delivering high-quality outcomes and innovative solutions on behalf of our members and state partners.
We are already in motion capturing organic growth from two powerful market disruption opportunities, Duals and ICHRA, that sit directly at the intersection of our core businesses and core competencies. And we have three lines of business that make up a unique and powerful platform packed with embedded earnings power and positioned today with the strategy, team, and track record to deliver. One, two, three. Here we go.
Thank you, Sarah, and good morning. After every election, whether it be state or federal, pundits, investors, political novices, and even newly electeds rush to define what the outcome means, who the real winners are, what kind of mandate they have, and what policies will pass as a result. Too often, this rush means that past experiences and performance are forgotten, and instead, political soundbites get treated as facts. So I'd like to take a step back and talk about past experience.
We know the country is deeply divided, and we know that each party is host of factions that disagree, sometimes vehemently, on policy issues. This dichotomy between party platforms and the intra-party disagreements make major reform difficult. But we also know that regardless of which political party has power in statehouses, Congress, and the administration, Centene has grown and thrived as a partner to our government stakeholders. With that backdrop, my goal today is to give you greater insight into how we see the political and policy landscape and what it means in terms of tailwinds and headwinds for Centene and for our three core lines of business: Medicaid, Marketplace, and Medicare, including PDP. Centene has always and will continue to always pursue good healthcare policy to ensure our members receive high-quality, affordable, and accessible care, which means working with all state and federal officials across all party lines.
Before I walk through where we believe the healthcare landscape may shift, first, we must look at how this election changed Congress. Republicans took the Senate and have a 53-47 majority. This majority is one seat larger than Trump's first term, and we expect Senate Republicans this time to be more aligned with Trump, especially when it comes to immigration and the Trump tax cuts. That said, the margin in the House is much closer. The 220-215 House Republican majority is far smaller than the 241-194 Republican majority President-elect Trump had at the beginning of his first term. This is one of the closest margins in nearly 100 years, making this environment challenging for Speaker Johnson. The Speaker's margin for error is functionally nonexistent, given that President-elect Trump has tapped three House members for positions within his administration.
This 217-215 majority is expected to last until at least April, when we expect a special election in Florida to replace the seats for Congressman Mike Waltz, who is tapped to be President Trump's national security advisor, and Matt Gaetz, who resigned from office. It is unclear when a special election will be called in New York, but we do not expect Governor Hochul to be in any rush to set a date to replace Congresswoman Stefanik, who Trump selected for ambassador to the United Nations. Thus, for a significant portion of the first year of President Trump's administration, Republicans will have at most only a two-vote majority. Republicans are not a monolith.
Their politics range from never-Trumper constituencies to moderates to those who have long been Trump supporters, and their risk tolerance ranges from those passionate about a particular issue to those that are in 50-50 districts in which hard votes could cost representatives reelection in 2026. This small Senate margin and razor-thin House margin means the incoming administration will likely face significant challenges securing major reforms. This was clearly seen when Republicans failed in their 2017 repeal and replace effort when they held 241 seats. That was 42 more votes than they have today. Although major reform may be challenging, it's important to also acknowledge the significant, potentially long-term effects of this election on how we think about voter demographics and party alignment. President-elect Trump is one of the most impactful political figures of our lifetime.
He has fundamentally shifted the Republican Party to one that is more populist, rural, and blue-collar. He broadened his appeal this past election, making solid gains with males regardless of race or economic status. When it comes to healthcare, the Republican MAGA coalition of voters are more dependent on government subsidies for affordability than ever before, so much so that over the past few years, we have seen a shift in the popularity of Medicaid. Medicaid expansion has never been defeated as a ballot initiative, including in ruby-red states like Missouri, Nebraska, Oklahoma, and Utah. North Carolina even passed Medicaid expansion when both houses of its legislature had veto-proof Republican supermajorities. Now, Georgia and Florida have Republican legislators pushing for Medicaid expansion, and in Mississippi, expansion efforts are currently being led by the Speaker of the House.
Medicaid has never been more popular, nor has it ever had more bipartisan support than it does today. That said, we also know that to retain this popularity, the program needs to be both high-quality and efficient with its use of taxpayer dollars. We expect the Trump administration and Congress to look at ways to create savings within Medicaid. Centene looks forward to working with the Trump administration on this goal. One of the value-adds Centene has brought to the states is bending the cost curve, and we do have every intention of doing more of this at the federal level. The Trump administration has a vested interest in ensuring government efficiencies, as seen through the expected creation of the Department of Government Efficiency, better known as DOGE. Quite frankly, governors and state legislators have long been taking on the goals of DOGE and with great success.
States can't run deficits and therefore must be efficient with their dollars. The reform efforts taken at the state level have not decimated Medicaid programs. On the contrary, instead, by leveraging a managed care platform, states have improved health outcomes, driven efficiency, and reined in costs, assisting states to develop a sustainable, efficient Medicaid program which meets their local goals in a way that is tailored to the local healthcare infrastructure and culture, has always been our bread and butter, especially in an environment where we anticipate states having more flexibility to design and implement innovative programs. We do expect a higher degree of policy skepticism around Medicaid, but we're confident in the case we can make at both the federal and state level for the value of managed care.
Centene has a long history of successfully working with state officials and our federal partners when budgets are constrained or at a surplus. As Washington looks to cut costs and garner savings, policies under consideration will likely include block grants and per capita caps. These aren't new concepts, but they have been historically hard sells politically. With such a slim margin in the House, the way forward for these alternate funding mechanisms will be incredibly difficult. If they do see success during the Trump administration, the Medicaid program must be funded appropriately, and steps must be taken to drive cost savings and efficiency at the state level. Medicaid managed care provides the chassis for doing so, and Centene has proven over the years to be an able partner. Moving to the Marketplace, we've seen strong Republican support at the state level for the individual market.
The Marketplace now covers over 20 million Americans. Of those 20 million Americans, 10 million reside in Texas, Georgia, Florida, Mississippi, Tennessee, and South Carolina alone. As we've had conversations over the past year, Republican governors and state legislators are overwhelmingly supportive of the enhanced Advanced Premium Tax Credits, which are better known as eAPTCs, that have been a significant factor in the individual market's growth and stability. However, eAPTCs are set to expire at the end of 2025 and do not yet enjoy the same support from Republicans at the federal level, at least in their current form. We fully expect some modifications to the eAPTC structure. However, given the projected millions of people who would likely become uninsured should the tax credits fully expire, we believe that Congress and the Trump administration will maintain some portion of it and look forward to the opportunity to work with them.
eAPTCs are a perfect example where politics and policy collide. The individual market, thanks to the eAPTCs, has finally stabilized. It is now a critical component and support of accessible rural healthcare. In rural areas, due to the added complexities of delivering care, premiums are on average about 10% higher. The eAPTCs help to ensure not just continued accessibility, but affordability for rural Americans. Without eAPTCs, it also becomes more likely that the remaining 10 states that have not expanded Medicaid will not only continue to feel pressure to do so, but will also see an increase in their uninsured population. Republicans in Washington are going to have to grapple with some challenging optics before eliminating eAPTCs. First, getting rid of a tax credit is a tax increase, and this would hit lower and middle-class working Americans.
Secondly, eliminating the eAPTCs destabilizes choice and care in rural America, reversing hard-won progress. Providers are also expected to incur challenges. Market instability could add financial pressures on providers, increase the likelihood of uncompensated care, and have a heightened impact in rural areas where clinics, hospitals, and providers are already facing pressures. Third, with the unintended side effect of putting pressure on states to expand Medicaid, eliminating eAPTCs could wind up growing entitlement spending and increasing costs to both states and the federal government. And finally, the uninsured rate will not only rise, but many who lose coverage will be Republican constituents and Trump supporters.
The Urban Institute just concluded a study where it found that elimination of the eAPTCs would increase the uninsured rate in Mississippi by 43%, in Tennessee by 39%, and South Carolina, Louisiana, and Georgia by over 32% each, while the uninsured rate would only increase by less than 3% in states like Massachusetts and New York. These optics, along with our discussions with various government partners, are why we're skeptical that eAPTCs will be eliminated entirely. We remain confident that the Trump administration and Congress will look at ways to improve the healthcare delivery system for the poor and working poor, and Centene is well-positioned to be that health solutions partner in Washington and in the states. Our CEO, Sarah London, prides herself on being a data geek.
Her passion for data has even rubbed off on me, so I'd like to provide you a couple of data points that you may find of interest. Under the eight years of the Obama administration, Centene revenue grew $34 billion. In the four Biden years, Centene revenue grew by $26 billion. And under the four years of the Trump administration, Centene's revenue grew by almost $60 billion. That's right. Centene's revenue grew more under the four years of President Trump than it did in the 12 years combined under Presidents Obama and Biden. When President Obama was first elected and had a Democratic Congress, the ACA became the law of the land. Initially, the belief was that the ACA was a Medicaid expansion program. The courts then allowed states to choose if they wanted to expand Medicaid, and to date, 41 states, including DC, have done so.
In regards to the Marketplace, there was a lot of skepticism around whether it would be successful, and indeed, there was volatility initially. That fledgling Marketplace is now stable, entrenched, and covers over 20 million Americans, providing high-quality, affordable care in all 50 states. With the individual market stabilized, we believe the incoming administration has the opportunity to stabilize and improve yet another area of our healthcare ecosystem, the small group market through ICHRA. ICHRA was first introduced during the Trump administration, but didn't gain significant traction, likely due to pandemic dynamics.
With an addressable market of initially the small group, then mid-size, and ultimately large group market, which sums to around 170 million Americans, we believe President-elect Trump and a Republican Congress will have an interest in leveraging ICHRA to address challenges in the small group market, and we look forward to working with the president and new Congress to achieve this goal. When it comes to Medicare under the Trump administration, Medicare Advantage is very likely to be on even stronger footing. We are hopeful the incoming administration and Congress establish more favorable rate support for the program and pursue policies that bolster its growth. We also see an increased state role in choice and design of duals plans, along with continued integration requirements. Given Centene's expertise in Medicaid and complex populations, no company is better positioned to serve Dual eligibles.
We also anticipate the Trump administration will continue to make enhancements to the MA Star Ratings program and look forward to partnering on improvements based on our industry expertise with complex populations. Regarding PDP, Centene continues to operate as the largest standalone PDP provider, prioritizing plans that offer low premiums, deductibles, and cost sharing. This aligns with our commitment to affordability for seniors and individuals with fixed incomes, especially those that are more medically complex. We anticipate a continued push for flexibility that enhances innovation and focus driving down drug costs for seniors. Our focus will remain on aligning with policies that strengthen and sustain the Medicare program, underscoring our dedication to safeguarding access, affordability, and most importantly, quality of care for all beneficiaries.
As you can tell, I am bullish on the tremendous opportunities Centene will continue to have when it comes to serving the low-income and medically complex populations we're focused on and remain confident in our commitment to our government programs. With nearly the closest majority in 100 years in the House, it is unlikely we see major healthcare reform, but rather continued opportunity for us to work in a bipartisan manner. We do not anticipate newly electeds to enact policy reform that would negatively impact their constituents. That includes the total elimination of eAPTCs.
As a company that has done Medicaid 30 different ways in 30 different states, embraced the Marketplace product at a time when other insurers shied away, and just completed the largest PBM conversion the industry has ever seen, Centene has proven time and time again that success is predicated on embracing change and not fighting for the status quo. Centene thrives in an environment of state flexibility due to our local approach to healthcare delivery and partnership. It has given us the credibility to work with both Republicans and Democrats in Washington and in the states as their health solutions partner, and it is why the Centene success story continues. And now, I will hand it over to Drew.
Thank you, Jon, and thanks to all of you for your flexibility in switching over to a virtual investor day. Before we cover the future, I think it would be instructive to quickly review what has been accomplished by this team over the last three years. You'll recall we got the keys to the company in Q1 of 2022. Since then, there's been some cleanup, a turnaround, and hopefully a once-in-a-lifetime public health emergency, but there's been a lot of progress. In 2021, we had $118 billion of premium and service revenue. In 2024, we expect around $144 billion. That's a cool $26 billion of growth, remarkable during a period of divestitures and redetermination headwinds, and as we'll cover in a minute, we have another $11 billion coming on top of that for 2025, and though not at our long-term target, an approximate 10% adjusted EPS CAGR during this challenging three-year period isn't bad.
What's really exciting, though, is the embedded earnings on our revenue growth that we'll cover in a minute. To round out the rest of the discussion of the past, we accomplished a few other things since early 2022, like divesting 11 non-core businesses at a strong aggregate valuation, taking out about 100 million shares, or 17% of our share count, doubling Marketplace membership, getting upgraded to investment grade now with two out of the three rating agencies, the beginning of a Stars turnaround, and successful execution on the industry's largest PBM conversion ever. Now let's focus for a minute just on 2024. We started the year with adjusted EPS guidance at greater than $6.70. During the year, we were able to increase guidance by a dime to greater than $6.80. And sitting here today, we are still good for greater than $6.80.
Admittedly, 2024 is an extreme version of a diversified portfolio, though I'd say the COVID-era Medicaid redeterminations are an extreme outlier in a lifetime of managed care. The bottom line is our diversified portfolio is expected to deliver at least $0.10 more than we originally promised in 2024. While I just covered things you largely already knew, hopefully the reminder is helpful when you're looking at us at 8x earnings and thinking about what team to bet on for the future. Now let's move to why you joined us today, the future. Starting with the first ingredient you need to drive earnings growth, revenue growth. We are expecting 7.6% growth at the midpoints, $11 billion of additional premium revenue compared to 2024, for a 2025 guidance midpoint of $155 billion of premium and service revenue.
We expect $1 billion of premium revenue growth in Marketplace, net of the outsized risk adjustment revenue we reported in Q2 of 2024. We expect to grow Medicaid premium revenue $5 billion, driven more so by rates than membership growth, minus the last $2.5 billion of redetermination annualization impact. As we've talked about for the last few quarters, the impact of the Inflation Reduction Act is helping to drive premium growth in our PDP business. But that's not the only driver. We also expect to grow membership to above 7 million members. We expect our PDP business to be around $14.5 billion of premium revenue in 2025 at a pre-tax margin in the area of 1%. So this provides earnings power for 2026 and beyond, as we'll cover in a few minutes.
With what appears to be a successful annual enrollment period, our Medicare Advantage business is expected to land towards the higher end of our previous forecast range, with 2025 in the zone of $15.5 billion in premium revenue. This corresponds to a forecast of about 20% membership reduction as planned, and no change in our estimated premium deficiency reserve to be recorded in Q4 of 2024 of approximately $125 million, as previously disclosed. You'll be glad to hear we plan on retiring the acronym PDR from our vernacular as we turn the calendar to 2025. Moving to HBR. This is a display of the impact that the HBR movement in a few of our lines of business has on the consolidated 2025 HBR.
As we covered on the last couple of earnings calls, we expect the Medicaid HBR to be a tailwind in 2025 as we improve the matching of rates and acuity. Between draft and final rates, we have visibility into rates that cover about half of the Medicaid member months of 2025. Medicaid is expected to positively move the consolidated HBR about 60 basis points in 2025. While we expect to be well into our target margin range for Marketplace in 2025, we had outperformance in 2024 that we wouldn't expect to recur, including the $600 million of 2023 risk adjustment we referenced on the Q2 and Q3 calls. That increases the consolidated 2025 HBR approximately 40 basis points. Then on the PDP business, think of the 50 basis points depicted here as mathematics, driven by the programmatic change in 2025 from the Inflation Reduction Act.
Importantly, the resulting pre-tax margin in PDP isn't expected to change meaningfully from 2024 to 2025. Because we are taking over the underwriting of a much larger part of the reinsurance phase of PDP, think of both pharmacy expense and the corresponding pharmacy premium going up in tandem with just a little more incremental SG&A. So the HBR goes up, the SG&A percentage goes down, and the forecasted margin percentage is relatively consistent from 2024 to 2025. Our yield on PDP is expected to go from the zone of $60 in 2024 to around $160 in 2025, hence the mechanical increase in the HBR. In other words, don't sweat the HBR increase on this slide from PDP, since it has to be viewed in the context of the program changes. HBR changes other than these three lines of business net out.
As you can see, our 2025 consolidated HBR guidance is a range of 88.4%-89.0%, with a midpoint of 88.7% compared to the 2024 current guidance midpoint of 88.4%. To help you understand the 2025 progression of earnings in HBR, we expect about 60%-65% of adjusted EPS in the first half of 2025 versus the second half. While we don't provide quarterly guidance, we are providing commentary about HBR directional movement throughout the year. For instance, all else equal, we would expect the commercial HBR to move up throughout the year as deductibles are satisfied.
Medicaid to move downward second half versus first half as rate increases take hold, and the Medicare segment is much more impacted by PDP in 2025, such that Q1 is expected to be the lowest HBR of the year for the Medicare segment, largely because of member cost sharing incurred in the front half of the year as a result of the benefit plan design changes under the IRA. In other 2025 key guidance elements, we are forecasting an SG&A range of 8.1%-8.7%, which is about 20 basis points down at the midpoint from 2024, reflecting a blend of changing mix of business and ongoing initiatives to manage SG&A. It's important to note that Medicaid, with the lowest SG&A rate of all of our businesses, is down to approximately 55% of our consolidated premium and service revenue in 2025.
We expect average net Medicaid rate increases of 3%-4% for rates that first take effect during 2025. Investment income guidance in the zone of $1.6 billion in 2025 reflects continued Fed rate cuts partially offset by a growing asset base from revenue growth, and we will certainly benefit in 2025 from the annualization of 2024's share repurchases, and we have approximately $2 billion of repurchases assumed in guidance for late 2025, which has a modest positive contribution to 2025 adjusted EPS. What does all of this add up to? Initial 2025 adjusted diluted EPS guidance of greater than $7.25. You can see 2025 guidance elements summarized here, including our first year with a diluted share count starting with a 4.
Note also an adjusted effective tax rate of 22%-23%, which is down a little from 2024, primarily driven by a state tax benefit expected to be realized in Q4 of 2025. Now on to my two favorite slides. First, the answer to a question that many of you have asked us, as Sarah also referenced, the question, what do you think investors are missing? One answer is similar to how financial people look at models on a net present value basis, especially when evaluating businesses that aren't earning their full potential. If you're looking to invest in Centene, I believe you have to think of the present value of the future earnings streams for each business. You can't just slap a multiple on $7.25 because within that 2025 guidance, one, the Medicaid HBR is temporarily high because of the temporary rate acuity mismatch coming out of COVID-era redeterminations.
This is on the rebound. Two, Medicare is losing money. This is also on the rebound. Three, our PDP business now at over $14 billion of premium revenue is in our 2025 guidance at a 1% margin. We should be able to push that up over the next few years. And four, our Marketplace business, which had a banner year in 2024, is in our 2025 guidance within our target pre-tax margin range of 5%-7.5%, a range we believe is sustainable in the long run, especially the more the individual market becomes the home for employees of small and mid-sized employers. This table is our view of the embedded earnings of Centene. Our goal is to get Medicaid back to a run rate of 90% HBR, which is exactly what we reported in 2023.
We reported 89.6% in 2022, and both Centene and WellCare averaged mid to high 89s for the five-year pre-pandemic period, 2015 to 2019. The return to about 90% would produce a $1.60-$2 of EPS compared to what is reflected in 2025 guidance. We would expect the majority of this to be earned in 2026 with any remainder from annualization in 2027. You heard earlier from Sarah that we are targeting break-even in Medicare Advantage for 2027. So that would be $0.40-$0.60 better than our 2025 guidance reflects, assuming 2025 revenue is preserved. We expect this would be achieved partially in 2026, then fully in 2027. While we are focused first on break-even, if we could drive a 3%-4% pre-tax margin over the successive few years, that would produce another $0.70-$0.90.
While Stars is a big lever, we aren't betting it all on Stars as there are ample opportunities in maturing clinical execution and improving SG&A to get to break-even and beyond. We spoke about PDP earlier and are starting with what we think is a prudent baseline of 1% pre-tax margin in 2025 guidance and would expect to drive that pre-tax margin to at least 3% over the following few years. For balance and for pessimists, we are presenting an estimate if enhanced eAPTCs expired with no substitute. As you heard from Jon, we believe lawmakers from both sides of the aisle see the value of those individual market subsidies, which help create affordability and economic mobility in urban and especially rural areas. Our top eight states, which represent approximately 70% of our Marketplace membership, are Florida, Texas, Georgia, Tennessee, South Carolina, Mississippi, Arkansas, and Missouri.
You can see a theme of red in the Southeastern Conference with those states with strong Republican governor and legislative support, and there are many scenarios of partial subsidy retention, whether it be capping at federal poverty levels or creating other access points for individuals and families who want and need access to healthcare. That is why the two words "up to" are important when viewing the up to $1 of adjusted EPS risk related to eAPTCs. We have already met with and are beginning to reach agreement with state customers on a process whereby the industry would file two sets of rates in the summer of 2025 if eAPTCs aren't resolved by them. That way, the industry could price for the 2026 risk pool shift in one scenario and for continued eAPTCs in the scenario that they are renewed.
We will also be meeting with the NAIC shortly to gain support on this important filing mechanic. This situation is not unprecedented. We dealt with this in 2022, where we had explicit pricing loads for the non-renewal scenario and resulting risk pool shift that could be pulled out when the eAPTCs got renewed in late summer of 2022. Overall, we think the scenarios reflected by this slide have a pretty attractive risk-reward profile as a whole, with outsized margin expansion opportunities in the 2026-2027 time period, once again compared to our 2025 guidance. Finally, our long-term growth algorithm that we initiated at Investor Day 2022 still holds true today. This is a look to the long term, beyond the focus and fortify era for Centene, a time period when divestitures and redetermination impacts are behind us and Medicare is on the rebound.
And when we return to steady growth by seizing the opportunities in the growth areas of managed care government programs. When top line is combined with bottom line and capital deployment in the long run, we believe we can grow adjusted EPS on a CAGR basis, 12-15%, compared to the jump off of greater than $7.25 in 2025. How will we do that? By growing revenue 7-8%, plus getting on average 1-2% margin expansion and deploying capital for an additional 4-5%. These categories are somewhat fungible in any given year. For instance, we would expect a higher contribution from Medicare margin expansion and a lower contribution from Medicare revenue growth in the earlier years of our long-term period. Centene is clearly a combination margin expansion and growth opportunity.
The embedded earnings opportunities are undeniable, and we sit squarely in the growth part of managed care government programs without a significant employer group business to defend. We should be able to push the individual market to pick apart the employer group business over the next decade. As Sarah articulated, our three core businesses, Medicaid, Medicare, and Marketplace, have very attractive growth opportunities. And we are ideally positioned with two disruptive opportunities: Duals alignment, where our Medicaid footprint provides a distinct advantage, and ICHRA. Add to that one hell of a CenT eam, one, two, three, plus a healthy dose of embedded earnings makes for an attractive investment opportunity. Let's go. Today's risk-reward would be a good time to join. Thank you for your interest in Centene, and let's move to Q&A with broader representation from our awesome management team, moderated by Jen Gilligan.
We will now begin our Q&A session with members of our leadership team. With us this morning, we have Sarah London, our CEO; Drew Asher, our CFO; Jon Dinesman, our Head of E xternal Affairs; Dr. Alice Chen, our Chief Health Officer; Kevin Counihan, our Head of Marketplace; Nathan Landsbaum, our Head of Medicaid; and Michael Carson, our Head of Medicare. Thanks, team, for joining us today. Looking forward to a good discussion. With that, our first question will come from Josh Raskin. Josh, please unmute your line and start us off.
Thanks. Good morning. You hear me okay?
We can. Good morning.
Perfect. It's working. Good morning. I guess two questions here. So first, can you speak to your confidence in Medicaid in both the short term by reducing that total company MLR by 60 basis points, as well as that long-term $1.60-$2 of EPS embedded from margin expansion? I'm interested in any updates you've gotten over the past eight weeks since we heard from earnings, both rate updates as well as any indications of trend. And then just second question on the enhanced subsidies. What does your dollar headwind, EPS headwind, include in terms of mixed shift assumptions?
Thanks, Josh. All right, so let's hit Medicaid first. As you heard, we continue to have really constructive conversations with our state partners. That has been a consistent theme, but I think we're also seeing, frankly, an unprecedented level of engagement. They are looking at data. They are not just looking at stale data. They are looking at current data. And I think that is why we are seeing meaningful rate movement. So we have had multiple double-digit rate increases. We've had mid-year cycle updates. We've had retros. All of that, again, is sort of not the norm, but I think it reflects the fact that we are not in a normal moment in terms of getting back to matching rates with acuity.
So continued momentum is what I would say. It gives us confidence as we look to 2025. And that, as you point out, is probably the biggest lever in terms of having set a guidance floor and the fact that rate decisions are ultimately out of our care and custody, but certainly directly in the path of our influence. And the more that we can influence those and harvest that embedded earnings faster, it provides upside. In terms of trend, do you want to talk a little bit about what we've seen coming into Q4?
Yeah, Josh, thanks for the questions. As you saw, we just reiterated our 2024 guidance, and we've closed October and November. So comfortable with what we laid out for 2024, including Medicaid. So I'd look for stability in that Medicaid HBR in Q4. And then, as we said in our presentation, the first half of 2025 being better than the back half of 2024 and the second half of 2025 being better in terms of HBR compared to the first half of 2025. So continued rate action. We've gotten some good rate updates recently. They're not yet sufficient, but we're making progress. And you see what I think is a responsible estimate for 2025 and the embedded earnings power.
And we have high confidence that we will get this back to the zone of 90%. It's just hard to perfectly predict exactly what quarter we'll do that in, but continued progress, as Sarah said, with constructive state conversations.
And I want to come back to the question about Marketplace, but maybe, Nate, you could quickly just touch on the fact I think the other place that we are seeing progress is relative to some of those program changes that we called out that we're creating additional pressure on top of sort of the umbrella of redetermination states that have made decisions about PDLs or decisions about behavioral health access. And I think just some positive momentum that we've seen in terms of a solutions-oriented dialogue.
Yeah, so in addition to getting some pretty healthy rate increases relative to what we're seeing in the data in the second quarter and since, this is not just about rate increases. This is about engaging our states in public policy that will help us bring down costs and help fund the program. States want their programs to be adequately funded so that we can pay providers and engage providers in value-based arrangements. So they've been very receptive to our early engagement, and we've seen some very good successes going into 2025.
Great. Thank you. Do you want to touch on the enhanced APTC question?
Yeah, enhanced APTCs. The up to $1 would assume what we believe is the worst case in terms of the membership roll-off, which is up to 30% of the market. As you heard both from Jon and Sarah and I, we don't think that that's going to be the case. But wanted to disclose that to you guys so you had some framework to think about the ultimate risk there. It's important to know, and I think you guys know this already, in the Marketplace business, unlike Medicaid, where we're influencing, asking, begging, negotiating for rates, we set the rates of Marketplace as a commercial product. And just like when a market's expanding, we have pricing load reductions for an increasing and improving risk pool.
We would do the same for a shrinking market and a worsening risk pool. So that's the genesis of the concept of submitting two sets of rates, getting states to agree to that in advance, the NAIC, or putting explicit pricing loads to the extent enhanced APTCs aren't renewed. So we think we've got that acuity shift covered because we can control the pen on the rates. And so that up to $1 reflects really the volume and the earnings risk relative to the enhanced APTCs.
Great. Covered a lot of good ground there. Our next question will come from Scott Fidel from Stephens.
Great. Just want to check that you can hear me.
We can. Good morning.
Okay, great. And first of all, I just want to make a personal comment that I just want to speak out against all this hate and vitriol that's been directed at the people that work in this industry. I've covered the health insurance industry for a long time, and I know for a fact how many good and decent people are in this industry. So just want to say that and extend my support for everyone in the industry during these really, really terrible times. And then I wanted to just ask my question just around the Medicare PDP business and just given how sort of huge the revenue base for this business will continue to grow to in 2025. And thought it would be helpful maybe if you could sort of walk us through sort of the building blocks I'm getting from that 1%-3% margin.
And then also how we should also think about for 2025, what type of margin benefit may be embedded from the one-year CMS premium stabilization program. And then sort of you're thinking on sort of what happens with that program beyond 2025. Do you see the opportunity to advocate with the Trump CMS to have that extended, or do you think that premiums are going to have to rise significantly in 2026 if that program is not extended? So basically, just more details around the drivers of margin improvement longer term and then the near-term benefit that you expect from the premium stabilization program. Thanks.
Thanks, Scott. Well, first, let me say thank you for your comments. You took the words out of my mouth, and I can certainly attest to the fact that every single person on this stage and all 60,000 people in this organization are here to make healthcare better.
Turning to your question about PDP, first would just call out the fact that the experience of this team having been in the business since 2006, having the benefit of all of that data, I think it's notable the degree to which we've navigated the first wave of IRA changes pretty seamlessly in 2024. And I think did an excellent job through preparation for 2025 bids, really anticipating those benchmarks, understanding how the program might change, and I think positioning ourselves really well. Also being thoughtful about how much change was coming in the program and therefore setting, I think, a prudent margin target as we get through the first year of sort of the complete set of changes taking effect. But Drew, maybe you want to talk a little bit about sort of building blocks to getting from one to two to three to 4% margin.
Sure. Thanks, Scott, for the question. So some of the bigger risks coming into this year were the estimation around the direct subsidy. Those of you that understand this product well understand that that was a risk coming into the unveiling of the positioning of the bidders, both in PDP and MAPD, because the direct subsidy was going from $3 in 2023 to $29 in 2024 and now $143. So I think we cleared that hurdle as well as the benchmark positioning. So feel good, really good about our positioning in PDP. We did that cautiously in terms of the estimation and the margin expectation for 2025. And so there'll be more stability in 2026 and beyond with the IRA changes largely being reflected in 2024 and 2025. So that will give us the opportunity to price for a reasonable margin over the next few years.
Great. Our next question will come from Justin Lake at Wolfe Research.
Thanks. Good morning. Can you hear me okay?
We can. Good morning.
Great. Thanks. Quick follow-up to Scott's question and mine. The follow-up on PDP, quickly, Drew, you said that revenue goes from $60 to $160. Yet to your point, the government subsidy alone went up more than $110 year- over- year. So I'm just curious why revenue only goes up $100. Is that some assumption for bad debt because of some of the smoothing programs out there, or am I missing something? And then my question was on Medicaid competition. Specifically, a handful of your for-profit peers have become more successful in the RFP processes nationally over the last few years.
I'm curious how you see the competition in the market today versus five to ten years ago, let's say, and how does that inform your expectations on forward growth given your currently best-in-class market position? Thanks.
Thanks, Justin. Why don't you hit PDP and I'll take that.
Okay, yeah. Justin, you're right on PDP with the yield change. It's a combination of mix shift. We have a higher premium product that is shrinking, and we're growing the low premium product supported, to Scott's question, with the $15 that's available to all PDP members in terms of premium reduction. And the MMP program, as you pointed out, Justin, that there's bad debt assumptions in there in terms of prudently managing through that. Great.
And then, RFPs. I am going to very respectfully challenge your thesis that we have not been as successful as we have in the past and maybe just go back 12 months ago and look at the data. So, we've had successes in New Hampshire, Arizona, Kansas, Michigan, Iowa, Pennsylvania, Ohio, Michigan again, and Florida. And I think it is a testament to the fact that I still believe we have the best business development team. I think we have incredible local leaders, and we know how to tell our story. We have also increasingly figured out how to leverage the fact that we are an incumbent and get out ahead of what our states are trying to accomplish. So, as you've heard me say before, we're competing on promises kept, not promises made.
Georgia, obviously, we were disappointed with the initial results, but as we've reviewed the information that we have today, we have some concerns about the process. Broadly, we have some real concerns about a policy decision that would make 75% of Medicaid members in Georgia choose a different plan while initiating a complex ABD program. So we certainly intend to protest there. But maybe just to your point about how do we intend to continue to be competitive, I'm going to ask Nate, who was lead for a very significant win that we had in Florida where we protected significant market share, talk a little bit about how that worked and what good looks like.
Yeah. So I mean, you kind of nailed it on the success that we've seen over the last 12 months on existing RFPs. It's a very long list, but it's that on-the-ground local approach, the relationships that we have with the states that we're in, and the relationships with the states that we're not in now that we always are in the process of developing. And those relationships and that interconnectedness with the communities that we serve is really what sets us apart and gives us that advantage when going for reprocurement. So it's really, in Florida, it's just a prime example of where that long-standing relationship with not just the state, but the providers and the members and the advocates and the families that we serve is very difficult to break.
Yeah. If you'll just indulge me, and I'm sure we'll get to this when questions about Duals and serving the complex populations, but we talk about our mission of transforming the health of the communities we serve one person at a time. When we tell our story and think about competing, we do actually bring it down to one person at a time. So, Alice, could you maybe share an example of how we serve the LTSS population in Pennsylvania?
Right. In part because we are the single largest LTSS provider across the country. So this is really an area of expertise. But again, so for example, in Pennsylvania, we have a program that really focuses on high utilizers. You can look at the stats, which shows that this program over 18 months decreased ED visits by 52%, decreased inpatient stays by 38%.
Then when you actually go down to the person, I'll just give you an example. Our team met a gentleman, a 42-year-old man who had been disabled by trauma. When we met him, he had been essentially bedbound for two years, lying in bed. As a result, his skin had broken down, skin ulcers. He had lost range of motion in his arms. He was smoking, so he had burns on his chest. Not surprisingly, he was depressed, and his family was completely overwhelmed. The thing about LTSS, which is really different, is that it's as much of a social program as a physical and behavioral health program. Our expertise is really whole person care and meeting the person where they are. When our team went in and said, "Sir, what do you want?" He said, "I want to go outside. I've been in bed for two years," and so they just systematically chipped away at things.
They got him to a doctor to get his wounds healed. They sent in a nurse to teach his family how to do pressure ulcer care. They got him a smoking cessation counselor. They got him physical therapy. They actually fixed his wheelchair, and so when you check back in with the team, he is a transformed person. He basically has filled out, his depression has resolved, and he's getting out regularly, and he's not actually using the ED. So his life is better, his health is better, and he actually costs less, and those are the kinds of stories that we tell and we leverage in terms of, again, the impact that we have had because we have served these populations for so many years and we know how to do it.
Can I add one more example?
You can.
All right. Fine. So just another example because we are the single largest foster care provider in the country. We care for one out of three foster care kids in over 21 states and sole source provider in six states. And I think what's really remarkable is that in the states where we are the sole source provider, and remember, these are really vulnerable kids, kids who have had abuse, neglect, trauma, they're separated from their caregivers, only 50% graduate from high school. When you look at this really complex, vulnerable population, we've developed comprehensive programs, care management, medication management, and provider partnerships.
And that's the local piece that you were talking about, Nate, where we have centers of excellence where when you actually look at the data and the outcomes in Washington State, we've moved the dial on HEDIS measures for a very complex group of people, including teens. Teens never go to the doctor. We increased service from 50% to 75%. So that's the kind of programming and the kind of outcomes that we bring to the states we partner with and then the states we want to partner with.
Thank you. That's a really great texture around the business. Our next question will come from A.J. Rice at UBS.
Oh, A.J., we can't hear you. Oh, there you are. We got you.
Thanks, everybody. Two areas of questions, if I could briefly ask them. One, appreciate the interesting comments on the ICHRA. It was interesting to hear that you're working with someone to access that market, Thatch, I guess. Can you comment on, do you need to add more capabilities to really take advantage of that? I guess I perceive it to be different reaching out to individual members versus really accessing the group market in a big way. And then maybe on the MA improvement that's in the embedded earnings, the 3%-4%, it sounds like from Drew's comment that that's not primarily coming from star- ratings improvement. I know a lot of the others who are hoping to get margin improvement are relying on star- ratings improvement. What will be the drivers for you? I think Sarah mentioned something about doing more with value-based care, physician groups potentially, I guess. Maybe talk about some of the building blocks, anything interesting you're doing there on the VBC side.
Yeah, absolutely. Thank you. Those are awesome questions. Let's hit ICHRA first, and then we'll go to MA. You're absolutely right that there are additional capabilities that are needed, although there's a lot that is fundamental about how we understand the individual marketplace and the fact that ICHRA and that Marketplace are all part of the same risk pool. That means that we already have a core competency in terms of serving that market. And as you heard, we are already serving that market. So, 33,000 off-exchange members, at least 20% of those are ICHRA. We expect to grow that this year. And we are making strides in terms of stepping into partnerships to better understand. I think the broader question, which is, what does the market overall need in order to move in the right direction? And how much of that is something that we lean into?
How much of that is something we build, buy, partner, and help the market kind of create the infrastructure relative to exactly what you talked about, which is a different distribution methodology, thinking a little bit differently about product? But I'm going to let the expert talk, which is Kevin, maybe talk a little bit about some of the maturation that we're looking for in the market and looking to help drive.
Sure. First of all, thanks for the question. The relationship that we have with Thatch is just an example of multiple relationships we have with ICHRA platform vendors throughout the country, and those keep growing.
What we're trying to do more and more is to imitate and replicate the group ESI experience with these employers to make it easier for them to adopt ICHRA and make the administrative and enrollment process for them and for the employee easier and simpler. That's a key part of success in this. With respect to distribution, it's also very broker-based. We use and have been successful with brokers for many, many years, I think, as you folks know, roughly 85% of our Ambetter business comes from brokers. It's a different set of brokers in the group business, but the concept of how to support them, educate them, train them, and do other things remains the same. We've been, as Sarah said, we're pleased with our success so far. We're doing well with respect to our enrollment during this open enrollment period.
We're entering six new states with dedicated staff beginning next year. We're making a commitment to this product that no other carrier is making. We're obviously excited about it.
There's a lot of interest and talk, I think, at smaller organizations, larger organizations. Certainly, we know of at least one Fortune 25 company that's been ICHRA is super interesting.
Yes there is. There's one dear to our heart. Yes, there is.
Great. Michael, why don't you talk a little bit about. A.J., you're exactly right that we intentionally pointed out the fact that while we've had awesome Stars improvement and we'll continue to drive that, we're not betting solely on Stars to get to break even and talk about some of the other levers.
Good morning. A.J., thank you very much for the question and bringing me into the conversation here. We're very excited to march toward the 3%-4% margin profile for the Medicare business, but for now, we're also very much focused, laser-focused on achieving break even by 2027, and to your point, we've made great progress in Stars performance. Sarah, in her remarks, talked about moving from 23%-55% of Medicare members in 3.5 or better Star plans. That provides a significant lift, just over $200 million or so. But that's not the end of it. When we evaluate our SG&A cost structure as well as our medical expense cost structure, we find significant opportunity there. On SG&A, we have at least a couple hundred basis points of opportunity for ourselves.
We're focused on ensuring that our internal underlying cost structure for Medicare from a systems consolidation perspective, operational efficiency, acquisition cost, vendor optimization standpoint, we're really optimizing and being competitive from an industry benchmark perspective on SG&A. On the medical cost side, frankly, we have opportunity in our baseline performance as well as mitigating ongoing trends to where we see continual uplift and significant opportunity on our path to break even and beyond. It's really a balanced approach that we're taking that we're very excited about. We're happy with our progress in Stars. It gives us significant lift and certainly paves the way to break even. We'll look to continue to invest and continue to do better with that as we move forward. You brought up value-based care. Value-based care is near and dear to me, having spent significant time on the provider side as well.
It's an integral part of our strategy. We have roughly 45% or so of our Medicare business in value-based care contracts, and we are sincere and authentic and deep about developing those relationships. We have strategies on the way to improve data exchange, improve how our care management functions work together, as well as our member engagement strategies with value-based care organizations, and we highly value those partnerships and look to grow with them more.
I think that's really important, both of your comments relative to the embedded earnings story and the fact that we have; it's not theoretical. We have a real concrete view, both in terms of the core embedded earnings and the potential upside of where that could come from.
Some important color on key topics there. Thanks, everyone. Our next question will come from Steve Baxter from Wells Fargo.
Hey, thanks. Can you hear me okay?
We can. Good morning.
Great. Good morning. Yeah. So on the Medicaid rate side, I was hoping you could update us specifically on what you're seeing for the composite update on the January 1 cohort and then how you think about that relative to the rates that are embedded in the rest of the calendar year. And then just in the Marketplace, the separate question would be on the guidance assumptions. Could you update us on what you're assuming for market growth, market share, and net pricing, basically whether you've seen anything so far in open enrollment for 2025 that adjusts your expectations for market growth? Thanks.
Yeah, absolutely. So do you want to hit what's embedded in terms of 25 on rates and then we talk about OE for Marketplace a little bit?
Yeah, sure. So as you may have heard earlier, we sort of ended this year, the back half of 2024, around that 5% from a rate standpoint. We're only betting on 3%- 4% for 2025, the full year for rates that first take effect. We think that's sort of a good balanced approach. It is partially informed by what we're seeing in 1-1, but we only have about 50% visibility into the member months of 2025, which makes sense, right? Because there's 7-1-2025 rates, there's 10-1, 9-1 2025 rates as well. And so we've got a range of estimates by each health plan and each product underneath it. And we think we're going to have to work hard to get the 3%- 4%, but we think that's balanced.
And then always looking to pull forward any of that $1.60-$2 that we can if we're able to sort of get states to that equilibrium point sooner than later.
And in terms of 1-1 rates, we still have a mix of draft and final and visibility to what, about 48% of member months. And then shifting to Marketplace OE, I think we've talked about an expectation for the broader market of mid-single-digit growth. We called out the fact that there were program integrity changes that CMS was going to put in place. Really important for everybody to understand that that agent of record lock, which went into effect for this OE, is something that our Ambetter team pioneered in January of last year.
And so if you remember that we had lower than usual SEP growth in 2024 because we essentially digested that already in our book as we came into OE this year. But Kevin, why don't you talk about what we're seeing, what we're hearing from CMS in terms of throughput and just any changes in expectation?
Sure. First, again, thanks for the question. We're six weeks into open enrollment, obviously. At present, we're on track for our overall enrollment growth. Obviously, we've got six to eight weeks to go depending on the state. But so far, we're pleased with how things are going. To Sarah's point, CMS has imposed a couple of new eligibility and broker integrity initiatives. The fundamental one, as Sarah said, is the agent of record lock-in, which we introduced in January of 2024, which CMS mandated in July.
So we've had the whole year of that element built into our experience and into our growth. And 2024, as you folks know, is a high enrollment year for us. Now, all that being said, we are hearing from both CMS and from brokers that some of those new integrity programs are having some impact with respect to the processing of applications, particularly over the phone. And just to give you a little concrete example, a typical processing time of 26 minutes has moved up to roughly 41 minutes. CMS is working very, very hard. They've got good people working to improve that. We're very confident that that will get improved. But we do believe that that's having some delayed impact with respect to how open enrollment is going overall for the entire Marketplace.
Great. Great. Our next question will come from Lance Wilkes at Bernstein.
Great. Can you hear me?
We can. Good morning.
Good morning. So could you talk a little bit about differentiation? And in particular, I'm interested in if you could speak to the scoring challenges in some of these RFPs and these initial scores and what the process you have to go through and do a postmortem on those, any initiatives you've got underway to kind of address at least that initial scoring. And then maybe secondarily, obviously, there's been a lot of articles and a deluge of articles on things like friction to patients, PAs, and claims denials. Could you just maybe put a little context on that for us for the Medicaid space and maybe how you look at that sort of context?
Sure. So again, let me start with RFPs. And if you go back and look at the scoring for all the RFPs that I mentioned earlier, our initial scoring is very strong and consistently very strong. Where we have had surprising or disappointing results and protested, the core scoring actually does tell the story of the fact that we are, in those cases, the highest quality plan with the highest choice rate and that we have submitted a compelling response. So that doesn't mean that we are not constantly looking at ways to get better. And we have a really strong partnership between our business development team.
And again, because we are increasingly competing in an incumbent mode, our local health plan teams to understand what are the most important factors, what matters the most to the state, and how do we make sure that we are telling a story that is compelling sort of regardless of what the framework of the RFP may be. So again, I'm going to ask Nate to talk and maybe Alice a little bit as well, just in terms of over the last couple of years, frankly, after the California result, we undertook a major process to ask how do we continue to get better, how do we think about competing as an incumbent. Maybe you guys could touch on some of the things that you worked on very specifically, certainly in Florida.
Yeah. Yeah. So I mean, there's this process. We've gone through this process a lot. And we inform ourselves every single time we go through it. Again, we look back at what we did. We look back at what the process was like, the scoring, what we wrote, and then also what the state is looking for. We've got to understand what the priorities of the state are, what the priorities of the provider community, the advocacy groups, which is why those relationships that we've got and we invest in so much are so important in the process. There is a lot of transparency in this process. So after these RFPs are decided, everybody involved in the process is involved in reviewing how it was scored and what they can do to improve the process, not just those of us who are participating in the process from a managed care perspective, but also the states as well.
They're trying to get improvement in their process to make it more efficient and obviously protect themselves against future protests.
And I'll just add, on a longer-term basis, when you look across RFPs, and it actually doesn't matter if it's a red state or a blue state, you see consistent themes. So there's issues of quality. There's issues of value-based care. And there's issues of maternal child health, behavioral health, and social drivers of health. And so what we've done is really hold, again, that expertise. That's the value of having 30 states and 31 plans and really collecting that expertise and driving enterprise-wide improvements and initiatives that are going to move the dial, just like our foster care program.
Jon, do you maybe want to talk just a little bit about sort of the broad and deep relationships that we build with our state partners as we're thinking about understanding what matters to them from the top of the house all the way to deep within the agencies?
Absolutely, Sarah. So when an RFP comes out, we're already way ahead of the game in terms of engaging from top down, from governor to Medicaid directors to those that are truly instrumental in terms of overseeing the health plans, and it's critical that we talk about those relationships, hear what they're doing, and being with that local approach that is our bread and butter. We don't go in and say, "Hey, this is how you need to do it, and this is how it needs to be set up," but we need to listen to them.
What are their top priorities and really deliver in terms of a message that engages in terms with what they're trying to accomplish? And as everybody has said here, the one thing about an RFP is everybody sees how that's scored, how everybody performs, and that becomes the baseline for the next RFP. And this last year, there's been an incredible amount of success in terms of wins that we've had. And I'm very confident that we will continue to be a great listening partner and engage in making sure that we're delivering for our state customers.
Great. Thank you. And then Lance, to your second question, there's certainly been a lot of noise. I think it is hard because it is distracting from the fact that we lost a colleague and someone who I know cared a lot about making healthcare better. We're really focused on our members and our customers. I think as an organization that works very closely with states and the government, our mandate is to provide services and provide programs that ultimately drive high-quality outcomes and do so in a cost-effective way. As I said before, I know every single person that is sitting to my left is part of this organization because we believe that and we want to make healthcare work better because it is big and it is complicated and it is unbelievably hard work. The fact that these folks and the 60,000 CenTeamers have chosen to come and do that work with us every day on behalf of our members is something that I am just incredibly grateful for.
Thanks, everyone. Our next question will come from Adam Ron at Bank of America.
Hey, thanks for the question. If I could just ask one question, one of your competitors is talking up the pipeline of M&A in the Medicaid space, and I realized you've already got a much bigger footprint than them, but I'm wondering if you're actively competing for those deals and if you still see any opportunity in the M&A landscape given that a lot of plans are under margin pressure. And then curious as well on the Medicare and capability side. Thanks.
Yeah. So we've talked about over probably the last year or so the fact that we have, as we were going through our value creation plan and really focusing and fortifying and kind of turning around the organization, we were still investing and ensuring that we had eyes on the landscape and were cultivating a very active pipeline because I know the guy next to me loves to do some M&A. And so I would just say one of the great things about where we are right now as we think about 2025 and beyond is the fact that we have incrementally more operating bandwidth and oxygen to think about those things. You want to talk a little bit about sort of what we might be focused on?
Yeah. While we were going through the divestiture process, which we're largely through, maybe a little bit more, but not much, we were building up and rebuilding the capabilities of what I'll call down the middle of the fairway M&A health plans, maybe some capabilities relative to some of our disruptive opportunities. So we're planting those seeds. I would tell you it's a reasonably high hurdle when we can buy ourselves for 8 x or maybe 7.6 x yesterday. So we think about the allocation of capital, but we would love to responsibly acquire some businesses' health plans that added to our core businesses or helped accelerate some of those disruptive opportunities.
Yeah. Back to A.J.'s question about sort of what we might need in the ICHRA space and what of that we might build, buy, or partner. I think that goes to your second point.
Thanks, everyone. The last question for this morning will come from Ann Hynes at Mizuho.
All right. Thank you. Thanks for all the detail. It was very helpful. Just on the Washington front, I guess, what visibility on timing do you have for any potential for the enhanced subsidies? There's some thought that the year-end continuing resolution bill could actually include an extension. Do you have any opinion on that? And then secondly, just to stay on the Washington theme, there is some concern in 2025 that Medicaid could be a source or a pay-for for any Trump tax bill, especially when it comes to FMAP payments or Medicaid block grants. Since you probably deal with Washington more than we do, can you tell us maybe any appetite you think Republicans or Republicans would have to make those type of changes?
Yeah, absolutely. It's a great question. Obviously, something that we're very focused on. I'm going to let Jon get into some of the details. The one thing I will point out, though, is just remembering the fact that by virtue of supporting Medicaid programs in 30 states and 30 states that have incredibly diverse political landscapes, this organization has a core competency in terms of working with our government partners to design high-quality, cost-effective access to healthcare.
And so I think when you bring that up to Washington with every administration, and this administration is no different, each risk has an equal and corresponding opportunity. So we talk about enhanced eAPTCs. It's part of the same risk pool as ICHRA. And ICHRA is a phenomenal platform if you think about individual choice, customization, portability, supporting small business owners and hardworking Americans. And so you need to have a stable Marketplace in order to move on ICHRA.
Then exactly to your question relative to Medicaid block grants, and again, I'll let Jon talk about this, but the idea that if that were a direction and you could get through the complexity of moving it forward, it would actually catalyze, we believe, a conversation at the state level about moving more of those 40% of dollars that are not currently in managed care into managed care to create room in the budget for that. And so again, equal risk and opportunity. And as Jon beautifully said in his remarks, one of the things that Centene has done very well over 40 years is embrace change and help shape the landscape to work for us and our state and our government partners. But maybe you live in Washington, so you've got all the inside scoop.
You could tell that Sarah has been spending a lot of time in Washington and the states because she's said it better than I can. I will say a couple of things. Number one, for this end-of-the-year bill, I do think it's highly unlikely that eAPTCs will be a part of this 2024 end-of-year package. Going into next year, obviously, we expect a reconciliation package, probably two next year. It seems like right now there's a focus, at least initially one on immigration. And I think that we're expecting really to see eAPTCs probably discussed a little bit more in the second half of the year. And when it comes to savings, when we talk to states, there's always opportunities for efficiency savings. And we'd love to be a part of that dialogue. How can we do things to improve care that actually also bring those efficiency savings?
We're really looking forward to that opportunity in Washington. The reality is there's huge opportunity for savings in Washington. We'll talk about block grants. We could talk about certain things. The most important thing that they probably realize after going through a block grant discussion in 2017 is you need to create states equitably or you cannot get the votes, especially in the House. We know how it's going to be much more narrow this time. How do you create equity? Well, one of the things that I'm sure will be discussed is a managed care platform across the markets. We look forward to the discussion. There's huge opportunities from an equity standpoint. There's a huge opportunity from an efficiency standpoint. More importantly, there's a huge opportunity to improve quality. We're really excited to be a part of this discussion moving forward.
Great. That's it. You can close us out.
Okay. I will echo what everyone said, which is just thank you for your time and your interest. And again, thank you for your flexibility. If I summarize what I hope you take away from today in addition to the numbers, one, this Centene is the best in the business, and we are unified by a singular ambition, which is to serve our members and fulfill our mission of transforming the health of the communities we serve one person at a time. Two, we are uniquely positioned and already in motion to capture compelling disruptive growth in the form of Duals and ICHRA. And those opportunities grow directly from our three core businesses, Medicaid, Medicare, and Marketplace, that together give us a diversified platform that is packed with earnings power. So we invite you to move forward with us into 2025 and beyond.
Again, thank you. Happy holidays and stay safe.