Humana is one of the largest Medicare companies focused on the Medicare Advantage business, but also has a large and growing Medicaid business as well as a provider business. Presenting today, we have Bruce Broussard, President and CEO, as well as Susan Diamond, CFO. We also have Lisa Stoner from IR in the audience as well. So it's my pleasure to be kicking off the conference with Humana standing room only today. Maybe just start off the Q&A with kind of the news last night. You announced officially the transition, which has been discussed for a while, but I guess why now as far as the timing of this? There's a lot going on. Bids are coming out, so just.
Yeah. Maybe I could do a few things there. First, just putting in context. I know there's always questions on the selection of Jim, and then I'll talk about the timing. When the board began the search for the succession for me, they were really looking at a few things: character traits, experience were obviously the two major areas. And Jim really fit both of the buckets quite well. On the character traits, what we've seen with Jim, both in the interview process and a lot of the analysis that was done with him through both the search firm and external parties the board hired, was really around a capacity to deal with complexity. Second thing is the ability for him to deal with details and quite extensively. And third thing is his character of humility and being able to really listen.
Those were really important traits as the board looked at both from a purpose-driven organization, in addition, just the complexity of the business, and also the diversity of the business. I'll come back to that in a minute. The second thing that was intriguing with Jim's experience was around he had experience with Medicare Advantage. He had experience in the provider business quite extensively. The third thing is he comes with a very deep strategic mindset. The combination and he was a sitting CEO. So the combination of his character traits that really stood out, and in addition, his experience, it was a differentiator for him. We had a lot of great candidates in the process. What we've seen during the last five months is actually that, as we've seen great followership by the organization and his leadership skills.
We've seen his ability to deal with complexity during a time that's fairly complex as a result of all the changes that have gone on in the industry, his ability to listen to the expertise in the company, especially we saw that very extensively in the bid process, which we both participated in, and the ability to understand the expertise and be able to leverage the expertise of the organization. The last thing that we've seen is his ability to really dig deep and be a really good operator. What the hypothesis going in, which was tested on a number of different sources prior to him coming on, has actually been greatly tested during a very complex time. Over the last five months, we've both owned the bids during that process and have worked together in the development of bids.
And we'll obviously get into some details of that. And so we've been able to work together side by side, and it's been a very productive relationship over the last 5 months. Why now is part of your question too. We're at a good breaking point. We're finalizing the bids. The bids are going to be submitted over the coming weeks. And we're in more the administrative process time as opposed to any decision-making. Decision-making was made a number of weeks ago, which we both were part of. And as we enter into the summertime, it begins the strategic planning cycle. We have a board meeting in October. The management team has a meeting in the middle of August that wraps around the strategic processing aspects of it. So it's a good breakpoint. It's what he should own the prospective side of the equation. The bids are done.
We both have walked through that. We've had a great opportunity to see his skill sets during that period of time. And so the combination of us being able to work side by side during this period of time and then the beginning of the planning process for myself and the board. We felt that it was the right time for him to make that transition.
All right. That's great. Yeah. I mean, I think Jim's got a lot of the skill sets that you think of about Humana's development over the next five or 10 years that building out of the provider base makes a lot of sense. It does feel like, though, the job over the next two or three years is going to be more about the repricing, which I kind of feel like the CFO has a lot to do with that side of it. So I just want to dig into kind of how you think costs have been trending, what you think your visibility into those costs are now. I mean, it does feel like everyone's had a hard time catching up to it. So has something changed? And what's your degree of confidence as you kind of submit those bids that have just been finalized or being finalized now?
Sure. So obviously, the industry experienced a higher-than-expected trend throughout 2023. At year-end, we saw that further sequential uptick in the fourth quarter. There was some varying commentary at the time about whether that would persist into 2024. We obviously had a point of view that it would and have always believed that the majority of what we were seeing was an industry issue versus anything Humana-specific. And that while the commentary might have been different going into the first of the year, we did feel like over time it would likely converge. I think we've begun to see some of that, obviously, with some of the commentary CVS has come out with. I think United, while they had some MLR pressure, they had the change disruption, which made it more difficult. So we'll see how that comes to mature over the second quarter.
As we've evaluated our own results, as we said on our first quarter call, we were pleased to see that we have seen some positivity in the first quarter. There is always some lack of visibility in the first quarter as it respects things that rely on paid claims. That's typically inpatient unit cost and non-inpatient trends. We acknowledge that the change disruption impacted that somewhat and made it a little bit more challenging than normal times. But this is always something that an uncertainty we deal with this time of year and going into the bids. As we did evaluate the first quarter, though, and what we do have good visibility into, MRA, and we did see some slight positivity in our final submissions for 2022 dates of service and initial 2023. So that was positive. We have good visibility into inpatient admissions.
That was certainly something that we were anxious to monitor given the Two-Midnight Rule and some of the uptick we saw in the fourth quarter. There was a lot of questions about what assumptions we made about the impact of those changes. Was what we saw in the fourth quarter a pull forward or not? At the time, we believed that it wasn't. It was likely some incremental pressure, which we baked into guidance. As we've evaluated the first quarter, as we sent on our first quarter call, initially, we did see some higher admission levels, which we did believe was primarily related to greater impact from those changes initially than we expected. But we saw improvement over each week as our clinicians and, we think, provider clinicians became accustomed to the new rules and tested each other's interpretation.
As we said, March was actually slightly favorable such that the first quarter in total was pretty much on plan. For the month of April, initially, we did see a little bit of an uptick the first few weeks of April, but then that has since moderated so that the back part of April and then into the first part of May is in line with expectations. So we feel good about that. We did see some early indications of positive unit cost, and that, we think, makes sense given some of the shift that we are seeing from what used to come in as an observation is now coming in as an inpatient. Those tend to be short-stay, lower severity. So the early indicators do suggest that there is some tailwind, hopefully, there that we'll continue to see mature. We didn't let that flow through the first quarter results.
As we said, given the Change disruption and the assumptions we had to make there, we did want to make sure that we gave those claims time to fully mature before we let anything flow through. So for the quarter, as we said, we did our normal process. We then made an explicit adjustment for the claims we felt were missing because of the Change disruption. Had we stopped there, we would have seen some favorability, but we went ahead and booked some incremental claims such that MLR came in line with expectations. Since that time, we do have the benefit of April paid claims. We did see some further positive prior-year development, primarily for the fourth quarter, although we did see positive development for all quarters dating back to 2023.
So again, positive, and we are hopeful that that will continue and suggest that the baseline that we jumped off of proved a bit conservative. In terms of things we're watching, I would say dental is something that we feel like we have less visibility to. Dental providers were more impacted by changes than others, and we did see higher costs in 2023. So that's certainly something we'll want to see. And then obviously, the non-inpatient. Early indicators, we're not concerned about anything we're seeing. We just acknowledge that we don't have the visibility we would like to feel more confident. So we'll just watch those claims develop through the second quarter.
Okay. So just to make sure I got a few of those things. So you're saying that since you reported Q1, you've gotten more visibility on Q4. And that Q4 higher elevation that you thought might be permanent, you're starting to say, "Well, the base is looking a little bit lower than what you planned.
Yeah. We saw a claim. We always anticipate positive development into the next year just because of our reserving practices. So when we speak about favorability, it means it was more positive than we had anticipated. So as we said on our first call, we saw positive development primarily for third quarter. We mentioned that if we just let things run, it would have suggested positive development for fourth quarter as well. Didn't let that run through the first quarter because of the change. Now that those claims have further matured, an additional month, we did see some incremental positivity, again, all quarters in 2023, but mostly in the fourth quarter.
And then just to make sure I understood your April to May comments, you're saying April at the beginning started out high, then moderated back to expectations the end of April and into May.
Yes.
This is admission data that you're talking about?
Inpatient admissions.
Okay. And the higher April, is that just, you think, the calendar from March into April, or?
We think some of it might be seasonal when the Easter holidays fall. It could have been some of that, people coming back from spring break and catching up. So again, early March, a little bit high, but then moderated the back half, and then early May is in line again.
And then you said a lot, and I'm writing here. So on the dental side, you said the dental visibility was more impacted by Change than other providers. Do you have visibility now, or are you still saying that's still an area where it's not?
Yeah. I would say we don't have the same level of visibility we typically would because they were more impacted by change. And so we're having to make some assumptions based on the claims that have come in. That's just one area. Knowing that it was a point of pressure in 2023 is something we'll want to continue to evaluate. We did make some benefit changes for dental in 2024. So again, something we just acknowledge. We'll need to see how that continues to develop along with the non-inpatient, which was obviously an area that we saw increasing trends over the year where we have less visibility.
Okay. But as Susan mentioned, in the bid process, we have not taken these into account, the April trends, what we said in the prior period development.
Okay. And so it's still not 100% clear to me what you guys are saying about 2025 margins. You guys indicated that you're focused on margins. You're willing to exit counties. You're willing to exit plans and extend new plans next to them. So you're focused on margins more than membership. But it sounds like it's a three-year repricing or four-year repricing. I'm going to just clarify that. But it sounded like that maybe 2025 would be the smallest year of incremental margin improvement. Is that the right way to think about it, that there'd be more improvement in 2026 and 2027 than there would be in 2025 just because of the rate update?
Yes. So as we gave our initial commentary back from the preliminary rate notice or even before that, we anticipated a flat rate notice. As we've said, ultimately, it proved to be negative. And for us, it was about a negative 160 basis points. So when you consider the rate notice, the implementation of another one-third of V28, the trend that we're experiencing, as well as then the impacts of the IRA, all of those things combined, if you add them all up, are pushing up against TBC on average in terms of the benefit changes you would need to make just to keep margins flat year-over-year. Now, that doesn't mean you can't drive margin improvement, but on the average, you're pushing up that threshold. So not as much room as we had hoped to take additional pricing solely for the purpose of margin expansion.
So as we think about the decisions for our 25 bids, as we have said, we do intend to exit some counties. When we thought about the framework of how we'd make those decisions, a primary input was the profitability of the plan, but also looking at how mature is the plan, how long has it been in market, what's the membership composition, is the membership credible, has it been unprofitable for more than one year, do we understand the underlying drivers, is there a solution to that, whether it's contracting stars or some other lever. Based on all of that, if we felt like the path to profitability was too long, then we'd decide to exit.
Or if because of the TBC thresholds and limitations inherently in TBC, if we felt it was going to leave a product that was not very desirable by consumers, we would exit, and then we can reintroduce and optimize it without the constraints of TBC. So we do intend to exit plans. That is a source of margin improvement because by and large, those plan exits are plans that run profitable. And so obviously, we'll go from losing money to not losing money. Then across the rest of the portfolio, still focused, again, you can think of it as margin improvement across the board for plans that are not at our targeted margins. So we would be looking to make larger benefit changes on those plans that are not achieving our targeted margins. We do have many plans that do achieve targeted margins.
Those are going to be ones where we're going to be very mindful of—are we willing to take less than the maximum of TBC against those plans? Because even with less than the maximum, they're still profitable. We want those plans to retain membership and grow. So we'd be looking to balance against all of that to maximize sort of enterprise earnings. So while we will improve margins across the board for the plans that will remain on an absolute earnings basis, you'll see that improvement, but then we are expecting the loss of some membership as a result of the benefit changes. We are anticipating that we will have a negative net growth for 2025. We've said probably a few hundred thousand. That will be very dependent on what the competitive landscape looks like and what changes people actually make.
We would say that the loss of membership is primarily related to those plan exits as we think about it and that all others we're assuming closer to flat. But acknowledge there is a wider range of potential variation for 2025 just given the uncertainty of what absolute level of changes others might make and then the discrete changes and how those ultimately resonate with consumers. So we could see additional membership loss, but at the same time, we could see membership growth. I think all of us have reiterated we do believe the industry will grow. I think you've heard many of us say, though, we expect a shrink. So who's going to grow in all of that?
I think we're all probably being somewhat cautious just because there's so much that we're doing that hasn't been done in the industry before and just need more visibility before we can refine our estimates.
Okay. So if I understood the way that you were originally providing guidance before you saw the rate update coming worse than you thought, you were assuming the rate would be somewhat below trend, maybe 100 basis points, something below what you could manage trend to, and that with benefit cuts, you could get to $8 of earnings growth. The rate came in worse, and that's going to make it less margin improvement this year than you were hoping for. So is the right way to think about it, that in 2026, if rates are 1% or so below what you can manage trend to, you could actually still grow $8 in earnings in out years? Is that all you need, or what kind of rate environment do you need to show the improvement?
Yeah. So as you think about what we're navigating 2026, you have obviously the higher trend that we're all catching that wasn't in 2024 pricing fully. And then you have the IRA, which is a bit unique. So when you think about 2026, we will have another year of V28. We will not have the same impact from the IRA, and then we won't have the same level of trend to deal with. So in theory, even with a similar rate notice, you will have more headroom to then take benefit actions for the purposes of margin. Now, our hope is that rates are actually better than we experienced this year just given CMS's point of view and the incorporation of that negative restatement amount.
If these trends develop as we all anticipate, then in theory, that should come back when they reassess the trend within their core sort of rate book change. But even in the absence of that, you'll have more headroom just because you won't have to absorb IRA and some of the higher trend. And then as you get into 2027, you don't have V28s fully phased in. So again, even more headroom. So assuming a reasonable rate environment that's reflective of trend and assuming a competitive environment where people are pricing to trend, then yes, you should have ample room in more room in 2026 and then even further in 2027 to get back to those longer-term margins, which we had said we think will minimally be 3% across the industry.
Okay. Now, that 3% number, I guess I asked the question on the call, but it was a little bit lower than what the other companies are talking about. I mean, I guess many companies say 3%-5% or 4%-5%, and so you were just saying 3%+. So how do you think about 3% as the number, and why focus on the low end of what other people are seeming to be talking about?
Yeah. And so when we talk about individual MA margins, we do not include investment income. We allocate that at a segment level, not line of business. So our 3, you can think of add, say, roughly 100 basis points to that. So really puts us at the lower end of what some of our peers are saying in terms of long-term margin. When we set our commitments back in 2022, as you think about the plan that underlied that very compelling earnings and EPS growth trajectory, it relied on an individual MA margin that was closer to 3, 3.5. We did not assume that you had to get to 4-4.5 in order to deliver that.
Our view has always been that in this environment where there still is an opportunity for really strong top-line growth through increase in the eligibles and penetration of MA, not to mention the yield that you get in this environment, if you wanted to grow membership at the industry rate, we felt like it would be very difficult to do that and extract more than, say, 3%-3.5% margin near-term. Over time, that could certainly change. As membership growth moderates a bit, you might see margins creep up.
But we think at least in the midterm, as there's still very strong top-line opportunity, that we think balancing margin and the opportunity for membership growth, that sort of maximizing that aggregate value that you can create, 3-3.5 is more reasonable in terms of what you can expect and minimally necessary just given the sort of capital required in the business, the risks that we're taking, that minimally we think the industry will demand that as a minimum margin.
You're thinking that with a normal rate environment or the rate environment they kind of think should happen over the next couple of years, 2027 is a good year, or we've heard other companies say 3-4 years. Is it?
Yeah. I mean, we're starting, as we've acknowledged, from our 2024 plan, you can assume is roughly break even. I know some others are sitting at a negative margin, so might have a little bit more room to do. Some others have different TBC thresholds. So given our sort of TBC environment, we would say, again, in a more reasonable rate environment reflective of trend. And if the competitive environment is all pricing to that, then in theory, by 2027, there should be enough room that you can do that.
I guess the trend update has been helpful. I guess one of the things that you didn't know at the time when you provided guidance because I've gotten some confusion from some investors saying, "You guys are talking about pricing for margin, but then you're also talking about growth and balancing growth." So it gets a little bit confusing. I think part of it was that you didn't know what your competitors were doing. Now you know at least how CVS is thinking about it. With CVS seems to be signaling, does that change your view about either how much membership you might lose or how quickly the path to normal margins might change?
Yeah. So we always go through a sort of game theory process each year around sort of what are the components of our pricing? How do those compare, do you think, to others? Is it an industry dynamic versus Humana? And how do we think we'll be positioned, and what level of benefit changes might others make? I would say a number of weeks ago in the early stages, I think there was some concern that we may be taking more benefit changes than others and created some anxiety within the team and sort of different perspectives on what might happen. It didn't change our strategy, I would say, at the end of the day. In what I described, we've always been very mindful of the underlying distribution of profitability.
What we have seen, which again, we believe to be an industry dynamic, is the industry has introduced new plans over the last number of years with richer benefits. I think those plans are underperforming for all of us. So I think we all have disproportionate actions to take against those plans. We all also have highly profitable plans that we're going to be, I think, mindful of protecting and want to make sure we retain members and continue to grow those plans. So I think we've always felt like we were working to balance that appropriately. I think with this commentary CVS has come out with, I think has made the team feel better about the changes we're making. Doesn't change our strategy, frankly, but I think does make them feel more confident that we won't be alone in some of the benefit changes that we'll be making.
I feel better about it.
Kevin just reinforced what Susan's saying. This year, we are pricing for profitability. There's no ifs, ands, or buts about it. And that's preserving our existing profitable plans and the membership in that while exiting markets and moving, as Susan said, more of our existing plans into the profitability area where we believe they have long-term sustainability. As we progress into 2026, 2027, then you begin to start moving to the balance of membership versus margin. But that's only because we've obtained the target margin. Until we obtain target margin, you'll continue to see us focus on profitability.
The plan exits and the market exits, that's a 2025 thing. There's no reason to exit a market in 2026, right?
Yeah. I would say, again, unless something develops unexpectedly, you should think of us as mostly solving that issue in 2025. When we say plan exits too, just to be clear, we will not materially change our coverage in terms of the number of eligibles that have access to a Humana product. There is a very small number of counties where we will have no product offering, and you can think of that as immaterial and not significant. The exits are likely going to be 1 of 2 things. It's going to be where we just exit a plan entirely, but we have other offerings in the market. So instead of offering 6 plans, we might have 5. Or we might have a plan that's offered in 5 counties, and we'll decide to reduce the coverage of that to maybe 3 counties.
It just won't be offered in as many. It's probably roughly even in terms of those two dynamics. That's the majority of when we'll do an exit. We will still have offerings for beneficiaries. We just won't have as many as we had before. We won't materially change the footprint or the coverage.
And so just to make sure I understood what you were saying about the membership being down, I guess I should know the answer to this, but on a percentage basis, what is that you're thinking?
All we've said is we've estimated a few hundred thousand but acknowledged that there is a wider range of potential outcomes very dependent on what the competitive environment is.
You were saying.
That's about 5%.
About 5%. And so, if you were thinking about—I think you said that—then this 5% is the market exit or plan exits, and that, based upon the benefit design cuts, you'd be growing zero.
On the rest of the book.
On the rest of the book. Okay. So that makes sense then. So then if your market exits are done in 2025, then does that mean we should be thinking about no growth in 2026? If you're making a similar benefit level cuts, wouldn't that be the right way to think about it?
So for 2025, again, the absolute level of benefit change is important in 2025, but then also what discrete benefits are changed. The industry hasn't priced to this level of change in a single year before. So we've done a ton of consumer and broker research that's informed what discrete decisions we are making. So to say, "Okay, for this type of consumer, what's the first benefit you cut and the last to try to optimize that?" But we recognize in this environment, we're going to have to see ultimately what choices do different competitors make? How do those products ultimately resonate, which will impact we know everyone, many consumers will be shopping. The question is, ultimately, do they stay in their plan? Do they switch to another plan? And how well is your sort of ultimate offering positioned?
So that's why we acknowledge there could be a wider range in terms of impact. We could see further membership loss, or we could see growth. Just depends on how those ultimately play out. I think for 2026, again, assuming the environment is we are all striving for that sort of long-term margin profile, then I wouldn't in theory, we should grow with market if we're taking similar action as others. But I acknowledge we will have to see how this year plays out. What does that inform us in terms of what people actually did, what additional work is to be done in 2026 based on the funding environment? But our goal would be to keep pace with market such that we're not an outlier at that point.
Kevin, just this year, one of the unique aspects of something going to happen in 2026 is with the IRA implementation and the deductible for Part D going from 8,000 down to 2,000. It really changes the makeup of the benefits that are offered. And it squeezes out a number of the benefits that have traditionally been high orientation to growth, the supplemental benefits, where they begin to be less and less offered here. So I would just say this year, because you see a lot of hesitation in trying to estimate our growth, it's really a result of just the profound differences that have to be made in the benefits. We just don't fully understand how consumers will adapt.
And the other thing, Kevin, I would say is when we think about the earnings improvement we want to see in 2025, we didn't want that dependent on growing at the industry rate as an example. We wanted to make sure even in a more conservative membership outcome that we could still deliver that earnings improvement. So to the degree we do see better retention or more enrollment than we expected, then that should just be net positive. We just didn't want to count on that. And then if for some reason we didn't see that, that'd be something that we had to walk back. So we're trying to take a more conservative view of how we think about delivering the improvement in margin for 2025.
Yeah. Because I guess I was wondering if that was a little bit to do with if CVS can't cut benefits in certain areas, you think that the benefit cuts in 2025 might not be as severe among some of your competitors as it will be in 2026. 2026 should be more normal. Everybody has to cut 40. There's no TBC limit impact to competitors. Is that what you were worried about in 2025, or is it just I want to be conservative, and that's?
Yeah. There are certainly some differences, as we said, and we always evaluate that. I think CVS, though, has been very clear. Supplemental benefits some tout outside of TBC. They've been very clear, I think, that they will target those. So again, there's still room for all of us to cut similar amounts this year. The question is, does everybody and then more discretely, what benefits do they choose? And then how are those offerings ultimately resonating with consumers, as Bruce said? So we just think there's a wider range of potential outcomes just given the uncertainty. And once we have better visibility, we can better estimate that. But to your point, unless there's other stars changes in 2026, then again, we should be on a level playing field.
Yeah. I guess to your point, you said this a couple of times, that everybody thinks the industry is going to grow. What do you think the industry is going to grow next year and the year after from a membership perspective?
Yeah. So this year, we're saying call it 7-ish%. But there is some depression just caused by the redeterminations where not all of the dual eligibles who get redetermined and lose their Medicaid coverage are re-enrolling. Now, that in theory is an opportunity going forward that we can get them back into MA. But there is some headwind in 2024 that shouldn't repeat. So we do acknowledge, though, given the disruption to the benefits, it's possible that you'll see some dampening on MA growth. We do think the industry will grow and continue to drive penetration, but it might be slightly lower than what we've seen in recent years. I think the other thing that we still as an industry have to sort of evaluate is the marketing and commission changes, rather, for the distribution channels and exactly what impact that has.
We have some questions about that, as do our peers. We're trying to get CMS to clarify for us, particularly for sort of the FMOs, how these rules apply to them. So I'd say that's an open question for the industry. But if it does result in reduced compensation, then that could have some impact. But we still think the industry will grow nicely. Might be more like mid-single digits rather than high, depending on the outcome of those things. But we think midterm, there continues to be an opportunity to minimally deliver mid-single digits. And then beyond that, again, once all the baby boomers are aged in and penetration continues to increase, we continue to think there is a mid-single digit opportunity.
Plus then, if the membership growth slows a little bit, you do get incremental yield, typically, from MRA as the book ages at a little bit faster pace. So still very compelling top-line growth opportunity.
Okay. And you mentioned duals because there was recently a row around Medicaid and the Medicaid presence you have to have to be able to service duals. How do you think about the Medicaid book? Are you positioned where you need to be to keep this membership growing, or is there something that you have to do to make sure that you have the right coverage?
I'll give Susan a break here, although we only got about a minute left. Over the last number of years, we have targeted states where we had a high penetration of duals to our Medicaid strategy. And we've been able to really execute on that. So when we think about where we are today, we've really sort of protected us from any kind of major change that you're talking about. That being said, what we do see with the change that's being proposed and is a long process is that the Medicare Advantage platform is much more important than the Medicaid platform and being able to service the duals. And we've seen that in our recent wins in Indiana, where they really looked to our capabilities on Medicare Advantage as opposed to Medicaid. We saw it in Virginia, less in Oklahoma, but still some of it.
What we see going forward is that the differentiation to win with the integration rules that they're talking about will require a deep Medicare Advantage platform. We feel we're very well positioned for that. We continue to believe that the organic side is the best way from a capital efficiency point of view. In addition, if we have to pick up a small plan, we would pick up a small plan. But we feel very comfortable with our Medicaid platform today.
Okay. Let me sneak in one last one as we hit the buzzer about this sign. The Part D changes, you mentioned it is going to be disruptive. How are you thinking about what that means from a supplemental benefit perspective? If Part D becomes bigger, then that's going to take up more of the extra benefits that you have to provide. And then you're already cutting benefits. And so how does that impact that? And then B, I guess, how does it impact the traditional fee-for-service membership? Do you think net-net benefits get worse, but the other side of the equation gets worse too and net-net is positive, or how do you think about that all plays out?
Yeah. As Bruce suggested, when you look at just the value of MA versus original Medicare, it's still quite compelling. But the components of it are going to shift a bit in light of the benefit changes we expect in 2025, where you will see more of the benefit being contributed from the Part A and B cost-share fill-in, the Part D, and then less on the supplementals than historically. I do think you'll still continue to see things like dental, vision, hearing prioritized. But some of the more cash-equivalent benefits that we've seen over the last couple of years on that strong rate environment are likely to be brought down. Now, the duals are completely different. All of that value is in the supplementals, which we would expect to continue, but in the non-duals.
Having said that, even with the benefit moderation we expect for 2025, when you look at them, the resulting value proposition, it looks much like it looked like a few years ago. That was the basis on which people were choosing MA for a decade. So we still think, again, very compelling value proposition for consumers, which is why nobody in our minds is going to go back to original Medicare because of this. They will still continue to look at it given the value it provides. When we think about standalone Part D, when you think about the composition of who's still in standalone Part D, it's largely duals. So that opportunity to continue to educate them on the value of MA is an opportunity. Then the majority is non-sub.
So we have been hearing that we might see disproportionate non-sub premium increases next year as well, which should prompt some, again, further consideration of MA as a better value prop. That, in conjunction with what's likely to be very large increases in standalone Part D, may act as a catalyst to have people finally consider MA as an alternative. It's really hard to predict what might happen in standalone Part D. Many plans will see disproportionately high premium increases. But there are some, if they have the right mix, that could still have a lower premium that still may be attractive. So I think that's one of the things we'll have to watch and see exactly how the landscape shapes up. But I do expect a disproportionate number of standalone Part D members to see large premium increases.
In conjunction with the non-sub premium increase, could act as a tailwind for MA.
All right. That is all we have time for. So thank you very much.