Good afternoon. My name is Alexander, and I will be your conference operator today. At this time, I would like to welcome everyone to Oscar Health 2022 update call. Later, we'll conduct a question-and-answer session, and if you would like to ask a question during that time, simply press star one on your telephone keypad. I would now like to turn it over to Cornelia Miller, Vice President of Corporate Development and Investor Relations, to begin the conference.
Thank you, Alexander, and good afternoon, everyone. Thank you for joining us for our 2022 update call, where we'll discuss our 2022 outlook, our convertible notes transaction, and our preliminary results for 2021. Mario Schlosser, Oscar's Co-Founder and Chief Executive Officer, and Scott Blackley, Oscar's Chief Financial Officer, will host this afternoon's call, which can also be accessed through our investor relations website at ir.hioscar.com. Full details of our results and additional management commentary are available in our press release, which can be found on our investor relations website at ir.hioscar.com. Any remarks that Oscar makes about the future constitute forward-looking statements within the meaning of the Safe Harbor provisions under the Private Securities Litigation Reform Act of 1995.
Actual results may differ materially from those indicated by those forward-looking statements as a result of various important factors, including those discussed in our quarterly report on Form 10-Q for the quarterly period ended September 30th, 2021, filed with the SEC and our other filings with the SEC. Such forward-looking statements are based on current expectations as of today. Oscar anticipates that subsequent events and developments may cause estimates to change. While the company may elect to update these forward-looking statements at some point in the future, we specifically disclaim any obligation to do so. The preliminary 2021 financial results discussed on this call are estimates and represent the most current information available to the company's management as our financial closing procedures for the fourth quarter and fiscal year ended December 31st, 2021, are not yet complete.
Oscar expects that its actual results to be reported in its annual report on Form 10-K for the year ended December 31, 2021, will not differ materially from the preliminary results reported on this call. However, these results are subject to change following the completion of year-end accounting procedures and adjustments, including the execution of the company's internal control over financial reporting, the completion of the preparation and audit of the company's financial statements, and the subsequent occurrence or identification of events prior to the formal issuance of the audited financial statements for fiscal year 2021.
The call will also refer to certain non-GAAP measures. A reconciliation of measures to the most directly comparable GAAP measures can be found in a press release, which is available on the company's investor relations website at ir.hioscar.com. With that, I would like to turn the call over to our CEO, Mario Schlosser.
Thank you, Cornelia. Good afternoon, everyone, and thank you for joining us on our call today. We will be sharing a brief update on our 2021 results, our very exciting 2022 enrollment results, our full year guidance for 2022, and details around the convertible notes transaction we signed today. Additional detail on our Q4 and our full year 2021 earnings will be shared at our upcoming call February 10. Stay tuned for that, and we'll see you again in a short two weeks.
Jumping into our focus for today, we issued a press release earlier announcing our initial 2022 outlook, as well as our $305 million capital raise through a convertible notes offering. Scott will talk about the deal in more detail in a few minutes here, but I would like to first give you some color on the expansive growth we've seen and the work our excellent Oscar team is doing to serve this membership already.
We have reached a powerful milestone, and we are honored to say that we will be serving more than one million members across the individual, small group, and Medicare Advantage lines of business. That includes more than 90,000 lives through the +Oscar client relationships. This overall growth reflects more than 80% premium growth year-over-year. That now puts us at more than 70% average annual growth over the past five years. This scale propels us forward as a business, and we believe we have the strategy, the model, and the capital to meet our ambitions for the coming years.
In our individual line of business, let's start there. We have grown from 90,000 members in 2017 to nearly one million today. The increase in membership is driven both by better-than-expected growth and by strong retention year-over-year. The growth is coming from several sources, from two of our core markets, Florida and Texas, from meaningful new growth in Georgia, and also above-market growth in several emerging states for us. We have heard directly from members and from brokers that our growth in these markets is a result of our strong brand, our best-in-class member experience, and our provider and distribution relationships.
Let me actually give you some more data on retention. We are seeing record high retention in our individual business. Across the IFP book, we are seeing 80% retention, with particularly strong performance in some key markets like Florida, where we see nearly 90% of our members in the state renewing with Oscar. Compared to the average member of Oscar, our digitally engaged members were 6 percentage points more likely to renew with us. Members that utilized our Virtual Care were nearly 7 percentage points more likely to renew with us. This is why we built in-house our very early-to-market, powerful virtual primary care plan designs around the Oscar Medical Group last year. All of this for us is the Oscar model at work and additional validation that a better member experience can deliver clear business results in healthcare.
Our growth and retention is particularly impressive when you consider that heading into open enrollment for 2022, we were the lowest price plan in only 5% of our markets. Broadly speaking, going into 2022, we increased our premium rates at the overall book level, pricing, as we talked about last call, to achieve growth and improve margins for this year. Even with these price increases, we saw nearly 2x membership growth across our Texas markets and 2.5x growth across our Florida markets. We also, if we dig a little deeper there, continue to see that the Oscar value proposition is resonating with even wider audiences, our average age for 2022 being 41 years old, up from 40 years of age last year.
Overall, we again saw premium growth exceeding membership growth in our individual business due to business mix shift to higher premium silver plans. This shift supports the overall profitability initiatives we are driving forward at the company.
Now, turning from individual to our small employer plans. We are also here very pleased with the traction we have seen with the C+O product line. We entered Q1 2022 with more than 30,000 members in that product, up from just 3,500 last year at this time, and there's a lot of runway in front of us in this product line. I remind you that this product is nearly 14 months old, and that we launched into seven new states in 2021, all of which have nearly gone through one open enrollment cycle.
We saw meaningful growth for the C+O product line in states outside of our core IFP markets, including Connecticut, Tennessee, and Georgia, which actually is also a core individual market state, with growing momentum in California following the launch of enhanced product portfolios. Historically, small businesses have had fewer options available to them, especially when it comes to technology and a great member experience. We are hearing from the marketplace here that switching to C+O is easy for brokers and businesses. This is our own enrollment platform, and so that's working very well. We have great approval turnaround times and a high touch service model that are key drivers of broker satisfaction.
Now, Medicare Advantage. In that market, we are now serving more than 41,000 members on the +Oscar platform, including approximately 36,000 Health First Health Plans Medicare Advantage members. We saw meaningful growth in the Medicare Advantage markets, particularly in Broward County, driven by our +Oscar client relationship with Memorial Healthcare System and Holy Cross Health. Preliminary data there shows that Oscar delivered one of the top three fastest growing HMO plans in that very competitive MA market. Our retention in that MA book of business was 90%. More than 60% of our organic growth in Medicare Advantage is actually driven by our direct marketing efforts, reinforcing the resonance and relevance of our brands and products with the 65+ audience.
Now, despite our nearly 2x membership growth overall, we are meeting the demands of our members. We set the bar high, we think. Operations are running smoothly, and just a few weeks into the year, we are seeing higher member satisfaction scores year- over- year, and in fact, our highest ever in Oscar's history. We have early indicators that our members remain highly engaged digitally. So far this year, if you look at all of our inbound communications from these members, more than 40% of all these communications come through to us via secure messaging, digitally from our mobile app or our websites. With now more than one million members on our infrastructure, that gives us even more confidence in our technology, and therefore also more confidence in our ability to serve additional +Oscar clients in the future on that infrastructure.
Let me turn to +Oscar, where we successfully brought approximately 60,000 Health First Health Plans members onto our platform on January first this year. Our platform has proved resilient and capable of handling this growth. Looking ahead, the +Oscar business is expected to generate $65 million-$70 million of revenues in 2022, and that's about a 13x increase over the prior year. We have strong traction in our +Oscar pipeline and see green shoots for continued growth into the future. You'll be hearing more about this, as well as a deeper dive into our long-term outlook for the overall company at our upcoming Investor Day in March. With that, I'd like to turn over the call to Scott to share additional detail on the convertible notes transaction and our 2022 guidance. Scott, take it away.
Thank you, Mario, and good afternoon, everyone. Let me begin with offering a few more details and background around our $305 million convertible notes transaction. With our significant membership growth in 2022, we sought to fortify our balance sheet and provide us with the capital and liquidity flexibility to continue to pursue growth as we drive towards full company profitability. We believe the convertible notes transaction, led by Dragoneer Investment Group, appropriately balances the advantages of a strong balance sheet with the dilutive effects of raising additional capital. The 10-year note has a conversion premium of 38% to yesterday's closing price of $6.03, with a 7.25% coupon, which is payable in cash. The company has the right to redeem after five years if the stock price is above 2x the conversion price, thereby forcing conversion.
On a converted basis, the transaction is 17% dilutive to current outstanding and dilutive shares. You can find more details of the transaction in the 8-K that we filed earlier today. I'll turn now to guidance, all of which is laid out in our press release. Before I go through our initial 2022 outlook, I'll provide a brief update on our preliminary 2021 results. While we are still going through our close process, we expect to meet or exceed our 2021 guidance across our key metrics. Specifically, direct and assumed policy premiums of approximately $3.4 billion are projected to be at the high end of the range, driven by higher in-year retention of members. Our full-year medical loss ratio is expected to come in at approximately 89%, reflecting the low end of our range as utilization came in consistent with our expectations and prior period development was favorable.
Our full-year adjusted EBITDA loss is better than expected and projected to be in the range of $430 million for fiscal year 2021. We will provide more details on our 2021 results during our earnings call on February 10th. Our 2022 guidance builds on the momentum we saw in 2021, reflecting the increase in scale of the business. Based on the strong results we saw across open enrollment, we expect our direct and assumed policy premiums will be between $6.1 billion and $6.4 billion this year, reflecting more than 80% year-over-year growth at the midpoint. We expect robust growth across individual, small group and Medicare Advantage, and we look forward to serving the 1 million+ lives on our platform in 2022.
Turning now to our medical loss ratio. We expect our full year 2022 MLR will be in the range of 84%-86%. At the midpoint of guidance, that is a 400-basis points improvement versus 2021. Key drivers of the year-over-year change include an expectation for lower COVID costs in 2022 versus 2021, moderating impacts from special enrollment period membership, which was elevated in 2021, as well as our continued ability to drive down costs leveraging our tech and scale.
Our insurance company administrative ratio, we're projecting to be in the range of 19.5%-20.5%, translating to an InsuranceCo combined ratio in the range of 104%-106% this year, which is a 600-basis point improvement at the midpoint, driven by a lower MLR and administrative ratio. Turning to +Oscar. As Mario mentioned, for 2022, we expect fee-based revenue of $65 million-$70 million. We're also introducing a new efficiency metric, our Adjusted Administrative Expense Ratio, which looks at total company efficiency. It reflects both the administrative expenses at our insurance company as well as the expenses at our holding company, which includes our +Oscar expenses. We believe this ratio will provide greater visibility on our overall expense profile and path to profitability.
For 2022, we expect our Adjusted Administrative Expense Ratio will be in the range of 24%-26%, which represents an approximately 400 basis point year-over-year improvement from our expected 29% ratio in 2021. Moving to Adjusted EBITDA. We project an Adjusted EBITDA loss of $380 million-$480 million in 2022, which at the midpoint will be comparable to our 2021 Adjusted EBITDA loss, but is roughly half of the 2021 loss on a percentage of revenue basis. We are seeing the benefits of scale in our business and results. I'd note this Adjusted EBITDA range reflects a modestly higher quota share in 2022 to roughly 40%.
We're also reaffirming our 2023 target for insurance company profitability, and we believe the increased scale that we have in 2022 will be a tailwind to achieving this objective. Finally, in late March, we are planning to hold our first Investor Day, where we expect to provide further insights on our strategy, long-term targets for our businesses, and our path to total company profitability. With that, let me turn it back to Mario.
Thank you, Scott. Great to see you go through this. Before we transition to the Q&A portion of the call, I wanna reiterate our view on what drove this remarkable growth into 2022. It's a direct result of our focus strategy, fueled by our fully owned tech stack and member engagement strategy, and its ability to drive meaningful retention and growth in our business. We end the year with more than one million members, and we expect our direct and assumed policy premiums will be between $6.1 billion and $6.4 billion, reflecting our incredible success to date.
Even with this growth, our technology is delivering high-quality service levels. Our ability to scale membership on our tech platform without service level degradation, reinforces our confidence in the future and serves as yet another proof point for the value of the +Oscar platform we built, and we have been rolling out. We're on track to achieve meaningful performance improvements in MLR and admin ratio, driven largely by our continued ability to drive down costs, leveraging our tech and our scale. As we have said in the past, we built our own technology not only to provide a superior experience to our members, but also to create a platform that allows us to enable others in the healthcare industry to take on more risk.
We now have more than 90,000 lives on our +Oscar platform via client relationships, and we expect fee revenues of $65 million-$70 million for the business this year. Looking ahead, we will continue to push forward with our aim of serving as the technological underpinning for the healthcare industry through +Oscar. Importantly, we remain fully committed to becoming profitable as our businesses are reaching scale. We're proud of the progress we've made in operational efficiency to date and our improved MLR performance. There is additional runway here, and we look forward to taking you through that in more detail at our Investor Day in March.
Before we take questions, I want to take a moment to thank the Oscar team. They work tirelessly. They work boldly to support our members, my clients, and each other. They prove daily that there is no genius without grit, as we like to say in the company, and make sure every day that we're providing the level of support and care our members and providers expect and deserve. With that, I'd like to open the line for questions.
Thank you. At this time, I would like to remind everyone; in order to ask a question, you may press star one on your telephone keypad. Again, that is star one to ask a question. Please limit yourself to one question. Thank you. We have your first question from Michael Ha with Morgan Stanley. Your line is open.
Hey, thanks, guys. Quick question on, I think you mentioned quota share increased to 40% next year. I think you guys are at 30% this year. Just could you talk about why the increase to 40%, the new go forward? If I can just squeeze one more in, retention, I think you mentioned 80%. How does that compare to prior years? Thanks.
Yeah. Well, thank you for joining us on short notice. You know, on quota share, we did increase quota share from, I think, 33%. We'll be at around 40% in 2022. I think that, you know, as I've said in the past, that quota share is one of the levers that we use to, you know, manage our risk and capital position. Given the growth that we saw in 2022, we decided to add a bit more quota share for the current year. I would just say that quota share continues to be, you know, a lever that we look to use to help manage our overall risk and capital position. I would anticipate that, you know, we'll see stability in that ratio for the 2022 period.
Our retention, Michael, so let me just reiterate exactly the number across the entire individual book is 80%. Particularly strong in some of our strongest markets, Florida has, I believe, 90% retention year-over-year. If you compare this to historical, so we think this is a very strong result. I mean, the options consumers have in the marketplace have gone up for the past couple of years. Our retention has varied depending on the market over the past couple of years. We've come close historically to 80%, but we believe that this is really our highest retention year. Again, that comes, of course, in a year where we've also had the highest health plan participation and rates pretty flat and so on. We think that's really quite powerful.
The two other things I can add there in terms of a bit of additional color is that we continue to see the fact that when you're engaging with us in the way we'd like you to engage with us, meaning you're in the website or the app, you talk to your concierge team, you get that additional retention bump. Digital engagement members have 6 percentage points higher retention than others. Then virtual care utilized members have 7 percentage points more retention. The other thing we're doing is we're talking to the brokers in the marketplace, distribution members and so on. Anecdotal feedback there, I would say, is a couple points what we kind of hear all over the place. Real strength of the brands, cultural relevance in how we present ourselves and how we go out there to the markets is number one.
Innovative plan designs, like we were the first insurer in the ACA to have kind of free downstream benefits, Virtual Primary Care plan designs. We talked about the diabetes plan designs going into this year. That's another, I think, real hallmark of how we go to markets. Third thing is excellent customer service. On par performance in 2021, we, I think, just really had another great year there of answering questions, helping members navigate the healthcare system, all the stuff we do really firing on all cylinders there.
A lot of sort of like, local surgery, if you will, figuratively, literally. We broadened the network in some markets. We broadened some marquee systems in certain markets, launched different products there that relate to that. That works well. Finally, we are just really, a, I think, very, hopefully a well-regarded player in the ecosystem, meaning we have even deeper, more collaborative relationships with systems and physician groups now, in these key markets. That really helps. We have cultivated physician groups now, strong health system relationships and so on, and distribution partnerships, final point there as well.
We have your next question from Kevin Fischbeck with Bank of America. Your line is open.
All right, great. Thanks. Yeah, I wanted to just talk a little bit about the growth that you're seeing. I think, you know, as managed care investors, we've kind of been trained that, you know, to watch out when companies grow a whole lot faster than we would expect them to. You guys are actually beating our 2023 revenue estimates here. I just wanted to get a little sense of how confident you are about being able to improve MLR when you're growing this fast. Usually, we would expect a company growing this fast to actually show better performance on G&A with some MLR pressure. Instead, you're actually coming in a little bit higher on G&A, a little bit better on MLR than we expected. Can you maybe just kind of walk through what's driving that and the visibility into MLR?
Yeah. Hey, Kevin, this is Scott. Thanks for the question. On the MLR side, I would comment that first of all, these are markets that we're familiar with. These are members that, you know, we've got. We do have a number of new members obviously joining with us, but we also have a significant portion of that membership that we're retaining. We're confident that this is a book of business that we are going to be able to navigate. We've shown that we have a past track record of growing and, you know, maintaining the MLR. I would just say there's a few things that give us confidence about the year-over-year improvement in the MLR.
One is that we priced for better margins. We talked a little bit about that, you know, we priced for growth but also for margin, and we believe we took a good balance point there. The second is that we're expecting less headwinds from net COVID costs and the impact of the extended SEP that we saw in 2021. That's a pretty big benefit to our 2022 outlook. As I mentioned earlier, the rest of that is really from the increased advantages of the scale and the tech-driven improvements that we've seen on a larger book. You know, we're actually really excited to have the opportunity to take on these memberships and to prove that we can maintain MLR with that larger book. I'll make just one quick comment about the administrative leverage that you talked about.
You know, what's really going on is that the level of growth that we had previously expected to achieve over a number of years was really accelerated this year with the level of growth. While we've been making progress, and we are making progress this year in getting administrative expense leverage, we weren't able to achieve the full effect of what we think is possible because we really are ramping up to meet this higher demand. We do expect that we'll have more opportunities to achieve, you know, better efficiency over time.
We have your next question from Stephen Baxter with Wells Fargo. Your line's open.
Yeah. Hi. Thank you. You know, I appreciate the commentary on retention. I guess I was hoping to get a little bit of insight into the breakdown of how some of these new markets are impacting your new markets for this year or new markets you've entered the past couple of years. Basically, looking for an update on your market share progression across these cohorts. Basically, trying to understand, has that changed versus what you've seen historically? Are you getting a lot more market share more quickly in the initial years of entering a new market? Has this at all changed how you think about sort of what your terminal or long-term market share might be in some of your markets? Thank you.
Yeah, it's a great question. As we talked about a couple of times, we generally think we have a multi-year pathway in going into new markets. We don't always take a high share in the market in the first year. Because we don't try to go in there with too low of a price and buy the share, but we do try to go in there and say, "Let's get the mix of member experience, plan design, network partnerships, risk capitation, distribution to run rights." That can take longer sometimes. In the case of Georgia, which this year, as I talked about, was a nice growth driver, it took us a couple of years.
In Georgia was very much a matter of rebuilding or kinda adding to the network, getting the right plan designs and the right rating regions done there, taking more of a distribution with us from other states, and things like that. We have clearly been gaining market share overall when it comes to the overall ACA. I think we are still only in about 45% or so of the overall ACA markets in the country. Even just in going into new states, we can get additional growth there in the years to come. There are plenty of markets where we have market shares that are still below average. We can still keep growing as well.
It's often a matter really of just making sure that in markets where we didn't quite get the share in the first year, we thought we can get, as I mentioned, rebuilding distribution, adding some networks, getting the brand out there more and things like that. Word of mouth kicks in, then the brokers will have positive word of mouth, et cetera. In Florida, as an example, in sort of like obviously one growth driver, in year one in the markets we're in there, we had about 7%-8% market share. In year 3, we're now up to 15% market share. Even that we don't necessarily think is something we can do better on, but it's obviously a nice progression there over time.
We have your next question from Jonathan Yong with Credit Suisse. Your line's open.
Hi. Thanks for taking the question. Just going back to G&A and leverage. You talked about having to scale up a bit faster than anticipated, kind of given the pretty big pull forward in the exchanges and what you were expecting. I guess, where do you think you stand now in terms of being prepared for that? 'Cause as we think about, you know, moving forward, perhaps the exchange growth that we've seen this year will not necessarily replicate itself again in 2023. So, do you think that you're at the optimal level now and, you know, we shouldn't see a spike up, and, you know, we could move much more closer to profitability on the EBITDA line in 2023 and forward? Or kinda just any color there. Thanks.
Yeah. Thanks, Jonathan. Well, let me take that in a couple dimensions. First of all, growth is great for leverage, and we did see fixed cost leverage. I would just comment that we think there continues to be opportunities for further fixed cost leverage. With larger scale, it gives you more of an ability to aggressively manage your vendor spend. We're seeing efficiencies in terms of our ability to really scale our employees in an effective way. I do think from a fixed cost perspective, we've got the right size to be able to continue to just add leverage without having to grow the fixed cost base.
On the side of the variable costs, you know, we do see that there are portions of our business that do require investment and growth when you're growing. We do have some variable costs that increase. We saw in this year improvement in our variable costs on a per member per month basis. We think that, you know, there was some of that whether it's having to bring in vendors and others that were delivered into the company here as we've been scaling up. We think there's opportunities to continue to become more efficient as we rationalize that. We think that all of this growth is really a strong tailwind for us in terms of 2023, and we look at this as, you know, a real opportunity for us to take advantage of this scale.
We have your next question from Gary Taylor with Cowen. Your line's open.
Hi, good afternoon. Had a couple questions. The first one just following up on the G&A or sort of the Adjusted Administrative Expenses. Am I understanding this correctly? In 2021, your Adjusted Administrative Expense $782 million, but you're saying in 2022 it's gonna be 25% of $6 billion, so it's almost doubling year-over-year, or am I missing something or not understanding that?
Yeah. Gary, you're stumping me on your math, but I would just say that, you know, the metric is total expenses of the company over total revenues. I think that you are-
We have $6 billion of premium you're talking about. Yeah, $6 billion of premium and now 25% at the midpoint adjusted administrative costs, so that's $1.5 billion, right?
Right. You need to walk down from direct and assumed premiums, you know, get down to you back out the risk adjustment to get to you know, premiums before ceded reinsurance. Once you get down there to net premiums, it's basically that revenue line item that's compared to the expense load.
Okay. Yeah, I missed the risk adjustment, but I thought the way you were showing it in the table, you were adding back, ceded premiums to total revenue, as the denominator. So-
Yeah. The ceded premiums is added back only in that we show one of our expense line items is net of ceded premiums. You know, we're including that expense line item and then adding to it ceded premiums.
Okay.
I'm sure that with this new metric, I'll just say that we'll be happy to spend some time offline to walk you through it.
Yep, thank you. Two other quick ones. without-
[crosstalk] We're introducing this because as a company, we have a big focus on taking the overall company profitability, and not just the insurance company, right? We've talked a lot about the insurance company going to profitability, expecting to go to profitability, planning on going to profitability for 2023. We have in the company really all systems go on saying as an overall company, including all the expenses, whether they're in the mothership, whether they're in +Oscar implementations, that is the eye towards getting better profitability is just this important piece. That's why we wanna give you more transparency with that line item in terms of weighing against us.
Yeah, 100% I'm with you on that. My two other quick ones. Without the Special Enrollment Period in 2022, do you anticipate IFP enrollment returns the sort of typical seasonality of quarterly attrition, where you have peak enrollment in the first quarter and then you have attrition through the year, and that's contemplated in the premium guidance?
Yeah. So, you know, when you think about churn, 2020 was a weird year because we had COVID and people were really sticking with their plans, so we had, you know, probably below normal levels of churn in that year. 2021, we had the extended SEP period, so, you know, we didn't see the normal types of churn that we would expect. As we look at what we, you know, what to expect for 2022, I'm thinking that that's going to look more like 2019. We think we've got, you know, strong retention, so we're anticipating the churn this year is moderately favorable to what we experienced in 2019. You know, overall, I would expect that we will have some seasonal decreases in membership, perhaps less significant due to some of our mix shift, but, you know, certainly returning to some of the trends that we saw pre-COVID.
We have your next question from Joshua Raskin with Nephron Research. Your line's open.
Thanks. Good evening. Appreciate you taking the question. So, I got the sense last quarter that, you know, there wasn't a need or there wasn't a sense of a need for additional capital, you know, sort of when you guys reported last November. I'm curious what the specific catalyst was. Is it just as obvious as growth is more than we thought or was there a change in EBITDA expectations, or is there a change in your expected timeline to break even? I think I just heard Mario confirm break even at the insurance side by 2023, and I'd be curious if you guys have even preliminary views on total company break even, what year that is.
Yeah.
I know I'm in there. Sorry.
Thanks for the question. Yeah. No, I appreciate that. Well, first of all, with respect to the transaction, we are excited to have the continued confidence from Dragoneer and Thrive. You know, our fundraising transaction really puts us in a strong capital position going forward. To get to your specific question, based on where the company is with the level of growth that we saw, as well as the projected 2022 Adjusted EBITDA loss, we thought it was really necessary to strengthen and solidify the balance sheet in the face of, you know, frankly, a pretty volatile and uncertain financial market situation.
As I mentioned earlier, one of the things that happened with this growth is that this OE effectively pulled forward some of our long-term growth plan, and, you know, that growth is coming in faster than the efficiency that we expected and that we think we can achieve. That resulted in smaller improvements in terms of the financial performance with it that we had anticipated, and frankly, is going to be a bigger drag on cash this year. You know, overall, the transaction was balancing our desire to have a strong and stable base to continue our growth. It doesn't, you know, change our expectation for the fact that we're going to target getting the insurance company profitable in 2023.
We think it actually creates a tailwind for driving to that objective as well as driving the company overall to profitability. On your question to just shift to cash and where we are on cash, you know, I would just say that we ended 2021 with roughly about $740 million in parent cash. The capital raise that we announced today brings us back over $1 billion in parent cash as we start this year. You know, in addition, we have a $200 million undrawn revolver.
We think that really provides us with ample runway to get the insurance company to break even in 2023, and it can take us well beyond that. You know, I also mentioned that we increased quota share, which reduced some of the capital drag. We feel like we've positioned ourselves in a really good place, in terms of our cash and the burn rate that we're seeing. We'll give you a lot more details about this when we get to the March Investor Day.
Yeah. Pathway towards overall company profitability, and we'll give more detail in the March Investor Day, but I'll just add to this that we think we've put some really great results forward now in this year, and both in terms of growth and improvements on the corporation's medical loss ratio and member satisfaction and so on. We want that to really flow through to the financial performance of the company sooner rather than later. We have a lot of focus really on saying, let's make sure the things we have built that are working on the insurance side, on the +Oscar side, really show themselves in overall company profitability as soon as possible and pushing towards that. More details in the March Investor Day.
We have your next question from Nathan Rich with Goldman Sachs. Your line's open.
Hi, good afternoon. Looking at the MLR for 2021 of 89%, Scott, could you maybe help us think about how significant COVID costs were as a piece of that, as well as I don't know if you're able to kind of quantify the impact of SEP? You know, kind of related to that, I think you know mentioned pricing increase on the overall book for 2022. You know, how are you maybe thinking about kind of PMPM growth for the upcoming year as you think about the model?
Yeah. Let me start off with the MLR. The MLR, COVID, you know, as we talked about, we're still in the middle of finalizing our close, but I'll give you some of the preliminary views. First of all, I would say that we're estimating that COVID, on a net basis, with offsetting, you know, utilization trends there, was about 400 basis points of total MLR impact in the year. You know, that was fairly significant to the overall trajectory. SEP was pretty significant in Q3. Overall was about between one and two points of the MLR contribution to 2021. As I mentioned, you know, prior period development was favorable, which was roughly 1/3 of that related to prior periods and about 2/3 of that related to the current year.
I'm showing no further questions at this time. I would now like to turn the conference back to Mr. Mario Schlosser, CEO, for any closing remarks.
Yeah, I'd like to thank you for the good questions. It's great to be in conversation, and we are looking forward to spending more time together on the 10th at our quarterly earnings call, and then any additional questions you have, we'll talk about then. Thanks so much.
Ladies and gentlemen, this concludes today's conference call. You may now disconnect.