You mean your guy's on the line right now?
Yeah.
Please wait a second.
And you got a better voice, so you-
Okay. Check one, two. One, two, check. One, two. Vijay, are you there?
I am. How are you?
Ladies and gentlemen, Mr. Vijay Kotte, the CEO of GoHealth. I'm doing just fine, Vijay. I'm glad to have you remotely. Chicago, is that what I'm being told?
Yes. Yes, I am.
Terrific. Terrific, Vijay. We're gonna get started here, Vijay, in a little bit, probably about five, four, five minutes.
Sure.
And we have a virtual audience online as well, in addition to your guy, John Shave, and we're gonna let some more folks trickle into the room here, and we'll take it from there. So I'll introduce John, and then John, we'll throw it to you. Is that how we're doing it? How does that sound, Vijay?
Sounds great, and then I will turn off video till then.
Got it. Sounds good. Are we gonna have video in the room?
Yeah, you can just turn it off. We'll have the video of the presentation only, not you. Okay.
Vijay Kotte. It's Kotte, right? Okay. All right.
Yep, that's right.
Where are you based, GoHealth?
Chicago.
Chicago as well? Okay, I forgot.
Yep.
All right.
is a Rangers victory with you.
That's right. Listen, original six, man. Chicago, New York, old-time hockey. Still works.
Yeah, your guy, your former Cub, Rizzo, a couple of good hits last night with the Yanks.
Oh, so you-
I don't know about that.
You're from New York?
I'm from New Jersey.
Oh, all right. Okay. All right. So the company's in Chicago, you're based here?
I live in Charlotte, though.
In Charlotte, okay.
He lives in Chicago. The company's in Chicago.
I gotcha. How long have you been with GoHealth?
Little over two years.
Nice. How's it working out?
We have a great opportunity in front of us. We're coming into a critical period for those. Maybe the next thing should be really exciting, the Annual Enrollment Period..
Is Medicare, like, basically... Does it depend on the state, like, how that works?
Yeah.
What is that?
Which health plans are operating. It tends to stream without, because I can't imagine more research for families to get them in the right spot.
Mm-hmm.
Best plan out here.
Really?
Yeah.
That's so soon, you're an investor.
[Crosstalk]
[Crosstalk]
Ladies and gentlemen, I want to welcome everybody back here to the two thousand and twenty-four Michael Caprodie Live, Sparks Steakhouse, New York City, New York. For those of you listening online, welcome. I'm John Heffernan, one of the moderators today. As you can see, I am not afraid to use the voice. One of the announcers over at Madison Square Garden, among other things. It's delightful to be here today on a beautiful fall afternoon here in Midtown Manhattan. So our sixth session of the day, kicking off our afternoon, I want to welcome VP of IR for GoHealth, based in Chicago, Mr. John Shave. And, John, you also have a special guest you want to introduce as well. But first, John, take it away.
Thank you, everyone, for being here today. As many of you might know, yesterday our Annual Enrollment Period. started, which is the Super Bowl period for GoHealth, so Vijay is back with the team in Chicago, but he was generous enough to offer us a half hour today to tell the GoHealth story and take questions from the audience, so with that, I'll turn it to Vijay.
Thank you so much, John. Appreciate you all making the time to learn a little bit about GoHealth. It's a really exciting time to be part of our story, but let me get you up to speed on who we are and how we got here, and how we're separating ourselves from the pack, at least from our perspective, so John, maybe if you can pop up the presentation, that would be great.
We're good to go. You just can't see it on your end.
I just can't see it. All right, great. So, if you'll just flip forward, you'll see we got the forward-looking statements here. I believe that's a really good thing for you to just reflect on in your spare time. Obviously, just become aware of it and, read through on the disclaimers there for the first few slides. Starting on slide four, GoHealth at a glance. In short, what GoHealth is trying to solve is this challenge that Medicare consumers, right? Those who retire into Medicare, typically sixty-five or over, or they have special health conditions, may be disabled or otherwise, are eligible for. They have so many plan options available in the marketplace to decide how they'll actually get their insurance coverage. And GoHealth enables a personalized shopping experience to find somebody you can trust to match a plan to your unique needs.
We'll talk about how we do that and how we make sure we do it in the right ways, but that's the problem we're trying to solve. And if any of you watch TV, starting today or yesterday or working up to it, and over the course of the next couple weeks, you'll see why it's overwhelming for the consumer. There's so much noise around it. There's TV advertisements, there's direct mail, there's digital. Everywhere they go, people are talking about Medicare, Medicare Advantage, annual enrollment, as John alluded to earlier. When you think about the overall TAM in the Medicare space, there are over 65 million consumers in the United States eligible for Medicare. That's 11,000 new coming in every single day. And GoHealth has been able to serve over 10 million individual consumers in their shopping experiences multiple times.
Last year alone, we enrolled over 825,000 consumers into Medicare Advantage plans, and that puts us in the position of being the number one source of enrollment for all the major health plans in the country. Now, sliding, going to the next slide, you'll see a little bit more about what the trajectory of Medicare Advantage is, or sorry, the history of the company. You'll see we've been around for over 20 years. We've been in numerous parts of the space of serving individual commercial. We've been a marketplace where we help support marketing, et cetera, for other brokerages. And then we really got into the Medicare world around 2016, where we focused our efforts on serving this very challenging problem that I already described to you.
I joined the company in June of twenty twenty-two, as we were trying to reposition the company and take it to a greater height, as it required a little bit more nuance around how Medicare works. And for those of you who have never met me before, I've pretty much spent my entire career on all aspects of Medicare Advantage. Brendan Shanahan, who recently joined us as Chief Financial Officer, also has decades of experience within Medicare Advantage. And what you'll find is the nuance around the consumers and the seasonality and cyclicality of this business is really tied to how the government of CMS, the Centers for Medicare and Medicaid Services, interacts with health plans like United and Humana. And Brendan and I both have a strong background in building and running those types of insurance companies.
We understand how their operating model works and what challenges they have and how we can help solve that. That's been a big transition for us over the last few years, and you'll see how that's leading to a differentiation for us. On slide six, on the left-hand side, what you're seeing is the trajectory of growth in Medicare Advantage. We talked about overall, there's 65 million consumers eligible for Medicare. You can see on the page here, in 2024, approximately 50% of that population, around 33 million consumers, are in what you call Medicare Advantage Plans. A Medicare Advantage Plan is somewhat like a replacement.
It's the way you think about your general commercial insurance, HMOs, PPOs, you select an insurance product, it gives you a network of providers, has a formulary of drugs and preset co-pays, co-insurance, et cetera. But 33 million consumers have selected Medicare Advantage, and we expect that to continue to grow over the coming years with a CAGR of approximately 6.6%. What's interesting about that, is that is growing. It is a very important piece of the puzzle for the financials of nearly every major health plan in the country. And you're seeing that on the right side of the page. This is a big product for all these big carriers, and we, as GoHealth, have been the number one source of enrollment for nearly all of those plans here, you can see, over the last couple of years.
What does that mean? That means for a very important population, for all of these health plans whom you all know, we are at the table with them. We are a strategic partner because we are a source of enrollments, not just in the traditional population, but in some of the highest, most vulnerable populations, of Special Needs Plans, those who are dual eligible in Medicare or Medicaid, and/or have some specific chronic conditions. All of which are extremely valuable and are nuanced because when we are first on the list of top producers, that allows us to innovate and drive new models for revenue generation and value creation for everybody in the equation, starting with the consumer, to the health plan, and all the way to the government, and we'll talk to you about how that's different.
On slide seven, what I want you to really take away is there are numerous ways. A lot of people always ask me this question. They say: "Why don't the health plans... They're big, we know those names. United, we know Humana, we know Anthem, we know all these names. Why don't they just go direct to market?" Well, on the page here, what you can see is the left-hand side. Problem is, when a consumer calls in, they see a brand, they may be comfortable with that brand, but they're not sure they're gonna get the best option available to them. Because on the left-hand side, what you see, the consumer calls in, they call into, let's say, a United phone number, and then they have only choice of plans that are United plans.
They're not gonna find out about a Humana plan. They're not gonna find out about an Anthem plan or anything else. There's a limited technology there, and again, that agent who picks up the phone, their number one incentive isn't to get you to stay on the plan if it wasn't a United one. It is to likely get you interested in a United product. So you don't necessarily have aligned incentives there. The next alternative for consumers is to go to a traditional broker. Maybe there's Bobby in the neighborhood, who helps everybody figure out what Medicare plan they should be on. Well, Bobby, it's not efficient for Bobby to go and get a contract with every major health plan in the country to offer 5,000 different plans within a technology tool to compare for you.
What Bobby typically does is they pick a handful of plans that they know, they negotiate a good deal with, and they offer that smaller portfolio of options to the consumers that come in. So you get a little bit more consumer choice than going direct to a health plan. There's really not a lot of technology for personalization, so you're trusting that Bobby can figure it out on his own. And then, in the end, Bobby only makes money if they switch you to a new product. So that's not necessarily fully aligned in that relationship. Now, flip to GoHealth on the far right. Obviously, they're all high and high, all green. We've designed the slide. We're going to design it that way. But it's because these are the key things that we focused on strategically that we think are valuable for consumers.
First is choice. We work with all the major carriers in the country. Again, thousands of plans are available in our marketplace, so that consumers can compare their plan with those. So on consumer choice, higher than the traditional broker model and definitely higher than the single health plan, direct marketing. Technology, this is where we need to focus. It is extremely hard. I don't care. I'm a licensed agent. I became a licensed agent when I took this job in 2022, and I will tell you, it is not just becoming licensed that gives you the capability to help a consumer choose the right plan. You need technology to rapidly interface and filter through, are my doctors in the plan? Are my drugs covered in the right tiering in the formulary? How do I think about other benefits that could be valuable to me?
What might I be eligible for? You need to have very, you know, intense technology that can pull in all that data and real-time process so that you're not wasting a bunch of time on the phone guessing at it, and so we have differentiated technology that allows you to get to a personalized choice, and then ultimately, this is the real kicker. The key element of this process to be successful is trust, and how do we build trust? Well, we have what we call a Plan Fit Checkup.
We compare your plan with the plans available in the marketplace, and if the plan you're already on, regardless if we enrolled you in it, is one of the top three available for you based on our proprietary ranking logic of plans available, we pay our agents to tell you to do nothing because we're providing you peace of mind, and that peace of mind enables a long-term, longitudinal relationship where you'll tell your friends, and if there is a shopping environment for you where you do need to make a switch, we're confident you'll come back. We'll come back to this concept later, but that is why we believe that we are fully aligned with our intentions to support the consumer, to get peace of mind in their decision-making.
We give them technology supported and driven analytics and, filtering logic to get to the right plan, and ultimately, we give you really broad selection of a portfolio of products that will meet your needs, and slide eight, one of the big things we did in 2022 and coming forward to now, we've really standardized our workflow, and you can say, "Well, that's great. Standardized workflow sounds good." It is on this concept of making sure you have an appropriate shopping experience, where you verify the consumer's eligible to shop, they want to shop, they go through, we get their personalized needs, as I discussed earlier, doctors, drugs, almost a conjoined level of comparison of their benefit priorities, and then flow all the way through to matching with the product and an option to confirm which plan makes sense for them.
So they're empowered to make the decision on their own, and then ultimately, make sure that they get the benefit they signed up for. The number one measure of satisfaction for a consumer is there are probably two to three key characteristics of the product that we recommend to them that enables them or that really motivates them to make a change. What our job is, is to make sure they get access and activate that benefit. So let's answer the questions. Let's walk them through what's gonna happen next, and how do they get access to that benefit? When you standardize that flow with technology so that you take away the unnecessary variability in the process, you gain significant efficiency, and that comes through in your direct cost per submission or cost per acquisition.
Number of ways you can describe that, and we'll show you what we've been able to deliver on that improvement, year over year, such that we are the most efficient with the highest quality experience to consumers within this very large industry, and we'll talk more about that as we move it forward, but it's all driven off of our proprietary technologies. On slide nine, this is that longitudinal relationship. Anne, who is our example consumer here, her needs change every year. So most people think, "Well, my benefit's been changed, so I don't need to shop." Well, that's not true. Benefits at face level may not change much, but underlying them, they can. Who's in your network, who's not in your network? What tiering within a formulary are you? If you went from a...
If your drug is still covered, but it's moving from a tier one to a tier two, your co-pays may go up $100 a month. That's relevant, and it's important. But on top of that, for example, with Anne, you may get diagnosed with a new condition like diabetes. You may move to another state. You may need to access new specialists because as you age, you have other complications or conditions that arise. You may need certain other benefits that are valuable to you. Each one of those inflection points for you personally, lifestyle-wise, or with your health plans changes, you need to shop. And our goal is to be that trusted resource for Anne throughout that journey, over 20 years, to come check in with us every single year.
And by doing so, we can ensure that she has peace of mind, that she's in the best product for her for that period, and minimizing unnecessary switching. Because most brokerages out there, when they get a hold of a consumer, doesn't matter what product they're in, they're only compensated and motivated to put them in a new product because that's how it triggers revenue for them. But for us, as you can see on the next slide, that's not how we're wired. We started early on when we came to this organization saying, as you can see on slide ten, that we were gonna begin with, do good first, take care of the consumer. And the responsibility of management here is to find a way of making money doing that, not the reverse. You can't make money and try to find a way to make it look good.
So what we did is we launched last year, what we call the Plan Fit Checkup. That is that process, where you come in, you just get a checkup. You give us all, the plan you're currently on, you give us all your priorities and needs, we assess the options available, and we can tell you whether there's a better plan option available or if the plan you're on is one of the top ones there. As you see on the slide here, that results, when we finish this Plan Fit Checkup, three different dispositions. One is, we recommend a new plan because there's ones that are better than the one you're on, and you enroll in it. That's 20%-30% of the time. There's a middle scenario where you don't get through the whole process, they lose interest, and they move on.
10%-20% of the time, we don't get to a completion of a conversation. But 50%-70% of the time, we end up in what we call a Plan Fit Checkup. We reaffirm that you're on the right plan already, and then we reorient you on that plan so you feel satisfied. Generally speaking, last year, and the majority of this year, we didn't get paid for that work. Nobody paid for us to do that work, but we paid our agents to do it because we wanted to reinforce positive behavior.
What I'm really pleased to announce is, what I've said earlier this year in our earnings calls, et cetera, that we proved that we were doing the right thing, the value is there for the health plans and the consumers, and the health plans were open to the concept of starting to compensating us for that. So as of this Annual Enrollment Period., we have been testing in Q3 and launching with all the same services we were delivering, but built on newly developed and refined proprietary tech, that enables us to provide peace of mind, reconfirm the consumer on the right product that they've already on, to make sure that they understand that is still the best one for them, and now we're getting compensated for it because we're reengaging and reorienting that consumer on that plan. That's a very exciting development.
The first in the industry to do it. We're the only ones who pay our agents for doing the right thing, and we're the only ones being compensated for doing that today. Now, all that together, as I told you, there's standardization, there's a core value set we have. You look at slide 11, compared to our peers that are out there in the public space, in 2023, you can see our cost per submission before the deployment of more automation and AI that we've had this year in our technology and tools, was already up to 30% better than our peers. And we are continuing that positive trend as we deploy our automation and AI, this AEP, and leading up into this AEP.
That 30%, better, up to 30% better than our peers, if you go to slide 12, was based upon an improvement year over year against ourselves, which was already industry-leading in 2022. We improved 9% going into 2023, and then I said, deploying more technology to enable more, and when I describe that more, if you look at slide 13, this is where you're gonna see it. We got our Plan Fit Tool. This Plan Fit Tool is the basis of this, proprietary, personalized ranking of all the plans available. Plan Fit Tool is fed by over 30 million interactions with Medicare consumers, where we've done shopping interactions, gotten priorities, we understand what they were satisfied with, who stayed in which plans longer.
And all of these, these ratings and this data was fed into a rating logic that we apply to all the plans available that you're eligible for, so we can have to the, you know, the tenth and hundredth place, decimal place scoring to compare plans for your needs, so that we can objectively compare them and tell you which one might be better for you. That's the Plan Fit Tool. Plan Fit Checkup is the compensation model for doing the right thing and providing peace of mind. Customer 360 allows us to have a return visitor experience. So we know you. You're known here. You're not maybe gonna speak to the same agent, but whoever on our side talks to you knows your history, knows your doctors. We're just updating, we're refining your needs as opposed to building a new profile.
And Customer 360 allows us to do that. You can see all of the other components that we've got in here that make us unique and different. And one, we are the largest, we are built off of proprietary tech that nobody in the industry has, and we have a strategic position with our health plans that enables us to be truly differentiated. So as you think about us as an opportunity, as a partner with you, or you go back to your investment community, you can see on slide 14, this is a cliff notes as to what to remember about us. First, large and growing market, 65 million plus, half of, of that population, are already on Medicare Advantage plans, and we serve that population, those who need to shop for it every year, and those who are thinking about joining a Medicare Advantage plan.
Unbiased shopping experience. You can use our tools online if you want, but we believe wrapping around with a human to answer your questions is critical. And so you can see that our unbiased logic, both technology and our agents, as how they're compensated, is unrivaled in the industry. Our Encompass offering, which is that workflow, is unique and built on very structured, data-supported automation and AI. Five, our management team, as we said, we understand the Medicare shopping experience, we understand the Medicare product. We're not perfect. We don't know it all, but we got a lot of battle scars to make sure that we avoid the pitfalls of so many organizations out there. One of those major ones is the concept of a consumer in this space, enrolling themselves through a digital marketplace, we believe is a fool's errand.
This consumer needs somebody to answer their unique questions, and that's why we still always wrap around a licensed agent to give you that little bit of extra peace of mind you need, and that's what we think is a differentiator for us, and that's what this experience management team brings to the table. Internal marketing, customized, internal and external partnerships that can be more supply/demand driven around the availability of our agents, and real-time tracking to understand queue logic and ensuring that the right lead is going to the right agent on any given interaction, so there's always gonna be a uniqueness around the skill set of an agent and the options available to a consumer, and you wanna match those so you have the best outcome.
Then the last two here, aligning with the health plans, like I said, first is being able to be the most significant for them is valuable. But on top of that, being nimble to align our processes to their needs so that we're supporting the consumer, as well as being highly attractive to how CMS, the regulatory agency of the government, who oversees this program, is seeking to protect consumers. And then finally, a resilient balance sheet. We are continually working on investing appropriately in the business to support our growth objectives as well as our shareholders and good returns on those investments. So let me stop there. We've got a few minutes to answer some questions. I know it went pretty quick, but happy to take them.
And John, to the extent that you can help facilitate that, that would be great.
Yep, Jay, the first question from the audience is, there have been some industry exits and consolidation, including our acquisition of eTeleQuote.. What challenges and opportunities does that present for GoHealth?
So, it's actually very interesting. I mean, this AEP is a very unique one, where, for the first time, those of you who may not follow the space, this is a highly disruptive market, meaning the benefits were released publicly. The health plans have been talking about it all year, that they were gonna make massive disruptions in degradation in product. And so there's gonna be a high demand for consumers to have to shop for a new Medicare Advantage option. And to your point, John, there have been a lot of brokerages that have not been able to figure out how to reduce their cost per acquisition, that direct cost per submission. They have been upwards of $1,000 in that bucket.
And so we have been really investing in technology, which enables us to be able to provide more capacity or our supply of agents and shopping experiences for the higher demand than we've ever seen, frankly, in the industry for years. And so as others have had those financial challenges, we have been preparing by investing in technology to give us scale capacity. Having eTeleQuote. join us at the beginning of AEP on our technology enables us to provide even more of that scale capacity to serve this population. And so we think it's an advantage for us. Our tech enables us to grow and achieve economies of scale with demand when it rises, as opposed to the traditional model, where much of the industry has been failing, which is that they were achieving diseconomies of scale.
As they were trying to grow, they had to increase their cost each time. And so in short, there is less supply of agents externally, so it's efficiency on marketing and drives more demand for our services. And we're really excited about the eTeleQuote. transaction, which enables us to, at this very important inflection in the industry, be able to support as many consumers as we can.
Vijay, the next question I have here is, regarding market dynamics. It was recently reported that two million consumers are gonna lose their Medicare plan during this Annual Enrollment Period., and six million more are gonna realize benefit degradation. Can you comment on how that should impact AE, GoHealth during this AEP?
Yeah, as I was alluding to earlier, that disruption, if you took that, if you put that all together, let's call it six plus two, that's eight million out of about thirty-two million. So about a quarter of the overall Medicare Advantage population, one out of every four consumers, is gonna have a disruptive event that needs attention for them to shop and confirm that either the plan they're still on, even though it's degraded, is the best one for them, or that there's a better option now available for them. That is going to lead to not only a high volume of shopping, but a high volume of switching, appropriate switching. So we believe that to be a tailwind for us, such that our marketing is gonna be more effective.
More consumers who come in will have a justified reason to make a change, and even if they don't, as I alluded to earlier, we reconfirm them with this kind of test model with Plan Fit Saves that we're rolling out, we'll also be compensated for that work, too, so I think the main thing to take away from that 6.6 million disruptions or degradations and two million plan exits is going to be that we have a lot of shoppers who need the help, and that should be an efficiency driver for us in total cost as well as in revenue opportunity.
Any further questions from the audience? Thank you, Vijay.
Thank you all. Appreciate your time.
Ladies and gentlemen, that was[Audio distorted ]