GoHealth at Sidoti’s Small-Cap Conference: Strategic Moves in Medicare Market

On Thursday, 12 June 2025, GoHealth (NASDAQ:GOCO) presented its strategic plans at Sidoti’s Small-Cap Virtual Conference. CEO Vijay Khotte outlined the company’s focus on sustainable growth within the Medicare market, emphasizing a consumer-first approach and operational efficiency. While highlighting positive advancements, Khotte also addressed challenges related to stock performance and market dynamics.

Key Takeaways

• GoHealth is prioritizing an unbiased shopping experience for Medicare consumers through its AI-driven Plan Fit tool.
• The company is diversifying into life insurance to mitigate revenue seasonality and improve agent productivity.
• A significant reduction in direct operating cost per submission has been achieved, improving efficiency.
• Strategic shifts in Medicare Advantage exposure aim to safeguard long-term financial health.
• The company is resetting debt covenants in response to evolving market conditions.

Financial Results

• Revenue & EBITDA: Q1 2025 saw material improvements compared to Q1 2024, attributed to resource deployment at scale.
• Cost Efficiency: Direct operating cost per submission improved by 17% compared to public peers and nearly 60% since 2022.
• Life Insurance Contribution: Expected to significantly boost revenue in Q2 and Q3.

Operational Updates

• Strategic Shift: Reduced exposure to new Medicare Advantage business in response to market pressures.
• Diversification: Expansion into guaranteed acceptance life insurance to stabilize revenue streams.
• Agent Productivity: Acquisition of Etelco added 400 agents, doubling productivity to approximately 54,000 sales.
• Training & Technology: Agent onboarding time reduced to less than two weeks; AI-driven eligibility verification is being implemented.

Future Outlook

• AEP Disruption: Anticipates a disruptive Annual Enrollment Period due to health plan exits and benefit changes, which could increase consumer engagement.
• Growth Plans: Continued focus on providing an unbiased shopping experience and enhancing technology-driven solutions.
• Debt Covenants: Efforts are underway to reset debt covenants with lenders to align with strategic adjustments.

Q&A Highlights

• Stock Performance: Addressed concerns about stock decline, attributing it to proactive market adjustments.
• Life Insurance Impact: Expected to offset Medicare enrollment seasonality and improve agent utilization.
• Profitability Caution: Noted that insurance plans are less profitable, influencing caution among insurance providers.

GoHealth’s strategic initiatives and operational efficiencies position it to navigate the challenges and opportunities within the Medicare market. For a detailed account, readers are encouraged to refer to the full transcript below.

Full transcript - Sidoti’s Small-Cap Virtual Conference:

Jim, Facilitator, Sidoti and Company: Good morning, everyone, and welcome to the Sidoti and Company June Virtual Investor Conference. The next company to present is GoHealth. With us, we have the CEO, Vijay Khotte, and the, director of investor relations, John Shave. As always, this will be a thirty minute presentation. There should be time at the end for q and a.

So if you have a question, you can type it into that Q and A box at the bottom of your screen. And with that out of way, it’s all yours, Vishay.

Vijay Khotte, CEO, GoHealth: Thank you so much, Jim. And I appreciate you making the time to facilitate this for us today and for all of you joining as well. John, maybe let’s flip forward to the forward looking statements disclaimer. Obviously, you can acquaint yourself with this at your leisure. Statement here, next page as well.

And then we’ll jump into the meat of the presentation itself. For those of you new to the GoHealth story, let me just highlight who we are, what we You know, and many of you know what Medicare is. Medicare is the insurance program built for those generally 65 or older as they retire and or unable to work. The government provides that insurance to Medicare beneficiaries. When you become eligible for Medicare, you’re set up with this very difficult decision.

You have to decide how you want that coverage to be delivered to you. You can do it straight through the government. You can have the government program, meaning they facilitate your insurance payments with a Medicare supplement product. Or you can choose a Medicare Advantage Plan. In that period of time we have to make these assessments.

And you have to reassess this thing generally annually. You have 40 to 50 different options of plans. Those of us on commercial insurance might have one, two or three, right? We might have an HMO, a PPO or HSA. Very simple.

But for a Medicare consumer, one who’s at that stage in their life and who is highly dependent on their healthcare needs, putting them in this situation is very challenging. And what GoHealth seeks to do is to help consumers navigate that very difficult decision. We enable them to have a personalized shopping experience where they can say, hey, what are the two most important things to me? Are my doctors in my network and my drugs covered? Well, we help do that in an automated way.

We get your doctors, we get your drugs, we help figure out which plans you’re eligible for. And then we match you with the ones that generally align with what your specific needs are. Every Medicare consumer has very specific needs. Their own unique needs that you can’t just spreadsheet. You need to talk to somebody about.

And we’ve talked to more consumers about this than anybody in the industry. We’ve been around serving, we’ve been around for almost twenty plus years now. And we’ve been serving Medicare for now almost seven to ten years. And in that, we’ve had over 30,000,000 shopping experiences. We’re the leader in this space of supporting Medicare consumers to be able to match to a health plan.

And to shop for the best match for them. Last year alone we had over a million enrollments into Medicare Advantage. And we are the number one source of enrollment for each of the major health plans in the country. We’ll talk about that a little bit more. But at the core of it is we are the most efficient in the business by leaning into, and over the last three years I’ve been here doing this, leaning into automation and driving a consistent experience that enables us to have the lowest CAC in the industry.

So if you flow forward to the next slide, John, you’ll see we’ve gestationally, we’ve done a lot. We’ve always focused on who and what a consumer needs. Right? And that is at our core. It is not what we can sell.

It’s how do we deliver peace of mind. And peace of mind for Medicare consumers is credibility that they’re gonna be able to access the care when they need to, the way they need to for their unique circumstances. In addition, we are diversifying to other products that also provide them that same peace of mind. But not just what we can sell them, what is valuable to them. And we’ll talk about that as we go through it.

But as you go through this, we identify the consumer We make sure we’ve got an efficient operating model. And then we’re able to scale it with technology and then use our resources to generate cash to reinvest in And I think the one thing that I just will put off the bat that most people get confused with us, they assume, oh, Medicare marketplace. You must be an online platform where people go to your website and they do all the shopping and then they enroll in something. That is not true. You can go to our website.

You can go shop your options. But ultimately, 100% of our enrollments come via an actual live conversation with an agent. Either ours or our affiliate agents speaking to a licensed agent to get that shopping experience done. So this is primarily a telephonic model that can start in all different marketing mediums to get there. That’s why this continuum that we showed here is so important to be able to scale and manage this type of a platform in this day and age.

So let’s go to the next slide, John. Overall Medicare landscape, Medicare Advantage in aggregate is growing about five to 7% per year. And Medicare Advantage is 50% of that. So 68,000,000 consumers in Medicare. Half of them are on Medicare Advantage plans, choose a Medicare Advantage plan.

And you can see here that Medicare Advantage continues to grow frankly at a slightly higher pace than the overall Medicare population. So what does that mean? That means over 11,000 Medicare consumers are becoming new to Medicare every day. And more of those consumers choose Medicare than have a Medicare Advantage than don’t. So over half are choosing Medicare Advantage as they come to Medicare.

And that’s why you see this trend in Medicare Advantage growing faster than the trend of overall Medicare Advantage enrollees. On the right hand side, you can see here, these are all the major brands that you would recognize who serve the Medicare space. And you can see that for multiple years we’ve been the number one player for those that we chose to put in the marketplace. And we’ll talk about how we choose which products are put in the marketplace. It’s not compensation, it’s stability.

But we’ll get to that in a moment. Moving to the next slide. A lot of people ask this question. I’m gonna move fast and we can obviously get to Q and A and we can talk about it more. But a lot of people say, hey, United, I saw that on the previous page.

Putting aside their current financial challenges that you’ve got, United is one of the strongest brands out there when it comes to healthcare. Why do they even need you? Well, let’s look at what a consumer experience is if they respond to United’s direct marketing, which they do. They do respond to United’s direct marketing. But when you go in through that shopping experience, consumer calls in, let’s say on a phone number or TV ad.

They call in, are they gonna be presented any other product options? A Humana product if it’s better? Devoted product if it’s better? No, they won’t. Because that United agent is only working for United.

So they don’t get a lot of consumer choice. They don’t really need sophisticated technology to do comparisons because they know their network and they’re just gonna put them on whatever product they avail have available. So instead of having to decipher between 40 different options in a county, they’re only deciphering between two or three. And then ultimately, this is the key drive key kind of values based component of what you’re gonna see as important about GoHealth is that there’s this unbiased plan fit checkup. What does that mean?

If a consumer comes through, full shopping experience, sells those to doctors, drugs, it tells the product they’re on currently, what plan do they have. And if we put them through our proprietary logic, we’re going to assess it and say, if that product that you’re already on that we don’t get paid based upon. You’re already on it. Somebody else enrolled you in it. If you say if that’s the best product for you according to our proprietary AI fed plant it tool, we tell you to do nothing.

Again, we provide peace of mind. We pay our agents to do that. So we can truly say we’re unbiased and we put our money where our mouth is. In this Health Plan Direct model, they don’t do that. So you’re seeing that as very low, unbiased shopping experience.

In the traditional broker model. Jimmy. Jimmy down the street. Everybody goes to Jimmy when they need to figure out their insurance needs. They go to Jimmy.

The perception is when you go to Jimmy, it’s better than going to a health plan specifically. Jimmy’s gonna give you the best of all options. You’ve known him. You’ve seen him for years. What most people don’t know is that it’s impractical for Jimmy to offer all the different plans available in the market.

There’s a lot of work to do that. You have to get certified. You have to go train to each one of them. And frankly, unfortunately, most local market brokers are influenced both on that administrative hassle as well as who compensates you better. So there’s gonna be a limited set of options.

It’s a little bit better than direct to health plan. There’s not really again a lot of technology. They just usually offer the one that’s easiest for them to communicate. And finally, they only make money if they put you in a new product. So rarely are they gonna tell you to stay on the one that you’re on.

Now flip to the GoHealth model on the far right. This is why by design they’re all green. But that’s also because it’s factually accurate. Right? Is that we, you can see, present more of the major health plans over 85% of the plans in the country we do offer through our marketplace.

Two, we check that your personalized needs and we feed them in to filter all those thousands of options nationally to find out which ones you’re eligible. Which one are eligible for, which ones your doctors and drugs are in, and which one meet the benefit prioritization that you have. So we use that very proprietary technology to predict the best match for you. And finally, I can’t stress this enough, the unbiased plan fit checkup. If the product you’re currently on that we don’t make money off of because you’re on it is the best one for you according to our logic, we tell our agent we don’t let our agents enroll you in something else, and we pay them to tell you to do nothing.

That’s unique. You only get that with GoHealth. We believe that is a process that we’re seeing, Tony, on this slide no, back to your right. On this slide, that continuous process if you go back to slide eight. Sorry, John.

Go forward. There you go. This continuous process that’s driven by technology delivers a consistent experience regardless of the agent’s history, tenure, or otherwise so that you know you’re gonna land in the right spot. If you got a family member who goes through this, you know they landed in the right plan and they were taken care of the right way. That’s the beauty of the technology underlying all of this because it drives standardization.

And a core element of the way I like to operate with my team is that avoid unnecessary variation. Leave customization but make it a mandatory standardized process. That gives you an unlock of capability. And more importantly in this model, build trust. Why do we do that?

Flip to the next slide, John. We do that because we’re trying to build a long term relationship. So you can see here Jane. Jane will go through over 20 shopping experiences over her Medicare tenure. And what you’ll find is that there are multiple times in the timeline where she doesn’t need to make a change.

That’s great. We wanna build a trusting relationship where all 20 of those shopping experiences, she comes back to us. But you can see there are natural inflections in her life. She’s diagnosed with a new chronic disease like diabetes. She moves.

She gets new doctors. This happens. People’s lives and their needs change as they age. That’s a natural function. So we build a model so that we get you to come back, and we build a relationship so you keep coming back.

And that is a highly accretive relationship that you’re investing in and getting returns on. Because, yes, we are moral focus, values driven, but we are also ferociously capitalistic. You don’t have to do above. You just have to start doing the right thing and find a way to make money doing it. Now moving into the next slide.

These are the things that really differentiate us. We have the best technology and the best people. And on the technology side, you can see the Plan Fit tool is built that is our AI logic. The Plan Fit tool takes 30,000,000 in shopping experiences, learns from that, understands the consumers, understands who they are, what was unique about them, and then predicts based upon retention rates, renewal rates, etcetera, to see which products match best with those types of consumers. That way when a consumer comes in, we identify what type of consumer you look like, demographically preferences, geographic focus, chronic conditions, etcetera, and then match it with the product that we think isn’t.

That maybe is obvious to everybody else that it’s the best choice for you. What we know you’re likely gonna be most satisfied with. That’s what the Planfit tool is. Hard to replicate that because nobody else in the industry has over 30,000,000 shopping experiences to build AI off of. The plan fit checkup, compensating for the right thing, verifying the right plan, delivering peace of mind.

Customer three sixty is that that CRM platform that keeps your experience known to us so that we can treat you like a known friend each time you come through. We can go through the rest. These are all unique things that we have versus the industry. On the right hand side, the agents, making sure you have a standardized flow, agents who are trained well, licensed appropriately, understand the unique needs of a consumer. It’s that understanding of the complexity of the needs that really builds the trust that leads to an enrollment in the end and people coming back.

And we do that better than anyway. Our training and leadership and development teams do a phenomenal job with our agents to make sure they’re empowered with tools to answer questions at the point of service. When somebody asks the question, you’ve got to be able to answer it real time. If you have to say I’m going to get back to you, you lost them. And so our tools and our training allow us to do that great.

Moving to the next slide. As we standardize all those flows that I just described, you can see what we’ve done on our direct operating cost per submission, or some people might call it your CAC, cost of acquisition. And versus our peers, you can see just in 2024 alone, we were 17% better than our public peers. Versus the industry, we’re nearly 50% better. And versus ourselves, we’re nearly 60% better from when I started back in 2022.

So we have continuously pursued driving down this CAC because we believe this is how you reduce the cost and cash burden of the business as you grow. Still more room to go, but we are accelerating our pace versus the field, and we think that’s a major differentiator. Next slide, John. You can see our reported results Q1 twenty twenty four versus Q1 twenty twenty five. You can see material improvements in both revenue and adjusted EBITDA, driven by our ability to deploy resources at scale, including an acquisition at the end of the year to drive a very efficient top line and bottom line growth.

Next slide. In the interest of time, I’m gonna give you your placemat. This is what you take away. If you’re gonna go talk to your investors, your family and whoever to decide is GoHealth a good place for us to focus. Let me just give you the highlights.

Large and growing market, you can see that here. Medicare Advantage is 40,000,000 plus. We’ve got more growing six to 7% per year. Unbiased shopping experience. We really lean into the plan fit tool.

You can feel good about the business we’re in and who we serve and how we serve them. Our standardized flow which we call the encompass workflow is unique. Our plan fit tool which gives us data and AI logic to feed the best practice so we can be efficient and empower our agents to really take advantage of that thirty to fifty minutes that they spend on the phone with the consumer. And then in understanding with our management team, having a lot of that bats in the space to see things as they happen. So we read and react fast.

There are a lot of dynamics that happen within Medicare. And there’s a lot this year that disrupted it massively. And you’ve gotta be able to read and react. And our experience management team enables that opportunity. We do a lot of our own internal marketing.

We have a lot of health plan partners. Plans are dependent on our ability to support their desires and their goals as their membership grows or needs to be redistributed. And best in class operations as we talked about in our CACs, well beyond anybody else in the industry and still with room to go. So I’ll stop there. I’d love to take some of your questions or Jim, if you’ve got some questions you’d like to kick off with.

But really appreciate your time to learn more about us.

Jim, Facilitator, Sidoti and Company: Yeah. Yeah. Well, I I just wanna get the one out of the way. You know, like you said, you reported a a pretty good Revenue was up. EBITDA was up.

But then the stock has done nothing but gone down. You know, there was there was a growing concern

Vijay Khotte, CEO, GoHealth: Yep.

Jim, Facilitator, Sidoti and Company: Noted in the 10 q. Can you just is is this something that’s new? Is it something a situation that you haven’t dealt with before? And what are you doing to address it?

Vijay Khotte, CEO, GoHealth: Yeah. That’s a great question, Jim. There’s a lot of things going on all at once. Let’s just talk about yeah. These are the outputs of what has happened.

So in q one, we did do very well on a total volume basis, revenue, and submissions. The issue in our business is we have to read and react to what the market is doing, what health plans are doing. What we think that does to our cash dynamics of the business and how to read and react to the products we offer and the cash profile of those businesses. And as we saw the market dynamics, actually starting in Q4 and playing into q one, ultimately, we started to notice health plans were being very, very tentative about growth under the current economic model and reimbursement model they’re under. As a risk adjustment model was changing for them, they were feeling more and more pressure.

We saw the things happen with United before United reported anything. Right? And so what we decided to do after we exited q one, we started to see more of this dynamic with the health plans where they were let maybe less dependable and didn’t make us feel as good about what the new opportunity to write business. So we pulled back massively in what we were gonna be writing a new Medicare Advantage business in the second and third quarter, primarily given by reading to the market’s dynamics and saying it’s not a good time to do it. We expect it to be very exciting in AEP again, but we need to pull back under this current benefit plan model for q two and q three.

So we did that. And we realigned our resources to sell our new product, which is guaranteed accepted life life insurance. It’s very much not an agency, much better cash profile, but there’s a transitionary period there. Related to those types of behaviors, right, we passed all of our debt covenants in the q one testing. But on a go forward basis, obviously, when I make this material shift in our model that is turning on a dime of sorts to read what the market’s doing, then obviously that changes my projections.

That changes my projections so I have to reset the covenants with my lenders around that. That I just said last year. This is real read and react time frames. You gotta do it. We did.

But we did it so quickly we have to reset the covenants. And that’s something we’ve done in nearly every in our last lender agreement we did it over 10 times as we went through that process. This is new lender agreement. You never want to do it early, but hey, I’m not going to let covenants stop me from doing the right thing. We’re going to reset the covenants to match what the right thing for the business is.

So we’re doing the right thing for the business and we’ll go negotiate to change the covenants accordingly. And that’s what we’re doing. As you start to think about how does that implicate the business, where are we going, what do you wanna do? Look, some people can put their head down. And I’ve said this and John’s heard me say it many times.

People in companies in the market tells you what they’re doing and shows you what they want. You can either react to that or you can put your heads down and hope it doesn’t implicate you. Well, that’s not a good stretch. We see it, we hear it, and we react to it. And we did.

So now we are adjusting and we’re gonna work on our covenants so that that going concern goes away. As most people don’t know, a going concern is more of a prospective that there’s a scenario under which you will not meet the upcoming debt covenant requirements. And so unless you change those requirements, then, you know, you you have a going concern. We are working on that right now as we speak. So we’re hopeful that we’ll resolve that quickly.

Jim, Facilitator, Sidoti and Company: And you mentioned the life insurance business. So so that’s a new business you’re entering. Same agents selling it?

Vijay Khotte, CEO, GoHealth: Yes. It’s all the same agents. Most of our agents are already they’re both licensed to do health, which is Medicare Advantage, and life. Right? You usually get both licenses.

So majority of our agents did have life. Those who didn’t, we, you know, took them off the lines, put them on furlough to go get their life insurance at some point in the future. When they’re ready, they’ll come back and we’ll able to come into the mix for us. But the life agents are pretty much the same agents. And what we’re enabling is this scenario, Jim.

Where if if you those of you know Medicare, it has this natural seasonality to it. It spikes in the fourth quarter because that’s when everybody has a shopping experience. The next biggest season is q one where everybody gets one switch. And then in the q two and q three time frame, it always comes down significantly. There’s only a handful of the population that can actually enroll.

It’s less than 20% who has an opportunity to shop during q two and q three. And so what we to to stabilize that and be able to keep as many agents stable throughout the year, you need to find other products that are less Christmas tree ish in their structure. And so we he’d always plan on doing something like this, and so we’ve been able to deploy those agents who otherwise would have been very low capacity, more of a cash burn in the cash generation, right, by setting up these products and selling life in this very specific guaranteed life acceptance product via through the q two, q three period. Then you kind of balance them out where they can switch into MA during q four while still selling Sun Life, and then they teeter back up and flip them ratio as you get back in the SCP the year.

Jim, Facilitator, Sidoti and Company: And, for the for the Medicare business, I know, booking revenue gets a little more complicated because you have to assume how long the policies are gonna stay in effect. Is that the same for the life insurance business, or is that a little bit easier to manage?

Vijay Khotte, CEO, GoHealth: Yeah. This is a you know, one on on two fronts, it’s a little bit easier to manage. So the revenue is generally about the same. It’s a little bit lighter, but generally about the same. The margin profile is actually better.

It’s lower cost because there’s less disclaimers, there’s less questions. You don’t have to worry about doctors and drugs. All the things that take a lot of time on a call are lower on life insurance conversation, especially guaranteed acceptance. So there’s less questions that have to ask. It’s more about coverage level and ability to afford different coverage levels.

That’s more of the conversation and how it works. As it relates to predicting revenue, this is on a non agency basis. We don’t have tail risk on that business. We have some qualitative measures, but it generally should be treated like a non agency revenue where the consumer and for those of you not appointed with non agency, that means it’s pre funded. You get the cash ahead of the marketing period.

And then it’s fully earned at some sort of qualitative metric based upon that policy staying and becoming effective over a couple of months. But beyond that, there’s no tail obligation and there’s no contribution to the contract asset on our back book.

Jim, Facilitator, Sidoti and Company: And do you think you’ll start seeing revenue from that business in the second quarter?

Vijay Khotte, CEO, GoHealth: Yes. It’s gonna start to be we started doing a little bit in q one, but it wasn’t material. You’re gonna see more materiality in q two and then significantly more in q three.

Jim, Facilitator, Sidoti and Company: And do you wanna see where that revenue is before you renegotiate renegotiate the covenants, or is those two independent things?

Vijay Khotte, CEO, GoHealth: They’re independent. They’re independent.

Jim, Facilitator, Sidoti and Company: Alright. And then what I think I heard you say is that, because the current insurance plans are a little less profitable, the the providers or, you know, the the the UnitedHealthcare’s of the world are a little more cautious right now. You know, what does that mean for this year’s annual enrollment period? Do you

Vijay Khotte, CEO, GoHealth: think do you

Jim, Facilitator, Sidoti and Company: think it’ll be you know?

Vijay Khotte, CEO, GoHealth: As we said on the earnings call, we expected it would be a highly disruptive marketplace in the AEP. And that’s actually a very good market for us generally speaking. The health plans right now are very tentative for growth because their own profitability, not our profitability, their profitability is shrunk. They’re not making as much money. They had a lot of unsuspecting trend.

What they tried to correct in last year’s benefit designs didn’t all come through the way they expected. So we expect them to make more cuts or exits from certain products. And that causes more shoppers than ever. Last year, had 2,000,000 people who had planned exits affect them, who had to make a new change. That meant those shoppers need to come to a place to shop and find a plan and that’s more demand for our services.

We expect that though we don’t exactly know what the products will look like, we’ll start to get early indications from health plans in August, but we really don’t know till October. But generally speaking, we know there will be disruption. We know that every health plan generally wants to grow someplace. But in this market landscape, there’s probably going to be people who are just being disruptive. You need to switch to the next best alternative.

And that’ll be demand for our services as well. So we do think it’ll be an exciting and disruptive AEP. But really for us, it’s going to be how much capacity we have to throw against that demand. More than enough demand, it’ll be very efficient demand. But we’re gonna have to be thoughtful about the the cash we have to invest in in trying to tap into it.

And that’s always gonna be the question.

Jim, Facilitator, Sidoti and Company: And I just wanna be clear. When you say disruptive, you mean more plan changes, which is is a positive thing for GoHealth. Right?

Vijay Khotte, CEO, GoHealth: Exactly. Disruptive for health plans it’s a very good clarification, Jim. Disruptive for health plans means great for us because what it does is it it provides very high intention consumers to come through our funnel. So that when they call in, they actually need to make a change, not just our shop window shopping. You have fewer window shoppers and more people who need to make a change.

And what that drives is high efficiency for us and we can, you know, provide high value added services for everybody involved.

Jim, Facilitator, Sidoti and Company: Right. And and you spoke a lot about the plan fit checkups that you do. You know, it’s it’s clear that that helps you retain customers. Are there any monetary benefits from a plan fit checkup?

Vijay Khotte, CEO, GoHealth: You know, on a plan fit checkup, if they’re not on our back book, right, there are some people meaning people that we wrote before. With certain health plans, we’ve come into arrangements where we do get compensated for that. It’s just not as mature. We don’t have a lot of those happening these days. There’s been so much disruption.

The majority of the consumers who come in do need to make a change. If you go back to 2023, we did a lot of them. Because in that year there was not a lot of change in benefits. It was pretty much a flat benefit year. And so we did a lot of those.

As we come into twenty fours AEP and now as we anticipate for ’25, we expect there will be a lower volume of consumers who are actually on the best plan available or the most suitable for them. But but in certain circumstances, we are compensated for that.

Jim, Facilitator, Sidoti and Company: And when you got there, the company had to make a couple adjustments on the long term value commissions, and and I think you adjusted the way you booked those. But, you know, are you pretty confident now that the commission that you have on the book, you’ll actually get?

Vijay Khotte, CEO, GoHealth: Yeah. We’ve we’ve we’ve done party verifications. We apply a constraint. Right? I mean, we do our best estimate of what we think actuarially is the value of a policy when we write it.

And for those of you, you know, don’t understand all that concept, ultimately, we get the smartest nerds we can find to do all the math, do the predictive logic of historical data and triangles to estimate what we think a policy will retain over fifteen years. They put that number and they they lay it on a piece of paper. And then we believe there are unknown unknowns. And so we apply a hedge against that somewhere between 915% depending on the channel that we get it from. And then we book that value.

That’s the revenue we book. So you’re right, Jim. We did look back adjustments for the back book when I got here, a material one in the fourth quarter of twenty twenty two. We haven’t done one since. But over that time frame, we’ve continued to apply a constraint on our best estimate of those those values.

And that’s part of our accounting policy now and making sure that, you know, periodically, we do party verifications of that value. And we feel comfortable, at this time, that that’s, at the right spot.

Jim, Facilitator, Sidoti and Company: You’ve used AI in the past to help, reduce the, the direct operating costs. You know, is is that working out? Do you think do think you’ll continue to invest in AI? Where do you think customer acquisition costs, direct operating costs, do you think those will continue to come down?

Vijay Khotte, CEO, GoHealth: Yeah. No, absolutely. There’s still a lot of room left in the direct operating cost per submission or CAC or cost per acquisition, primarily around efficiency. I mean, we’ve talked about when I started here, we had over a hundred and twenty minutes was the average handle time for a call through the deployment of AI and automation, mostly automation. And then AI really just gives you a standard experience on plan fit matchup thus far.

We haven’t deployed it to really drive more efficiency, but more standards. Automation has led to efficiency has come through the model. And we went from one hundred and twenty minutes down to fifty four minutes. And a big part of that is we’ve also used our standardization of the tools and process to get the onboarding. Really, burn, the biggest cash burn for this business, yes, it is when you’re marketing and selling, but it’s more importantly it’s ramping agents.

Because it used to take up to sixteen weeks to get an agent from new to the company up and ready to sell and trained. We can now do that in less than two weeks. Right? And so what you’ve done is you cut out all this cash burn time where nobody can generate revenue where you’re just training them. We use AI tools instead of live leads.

We can give you a know, and and that burn, you had a bunch of marketing lead. You had buy them leads that you knew they wouldn’t go anywhere. Right? It would’ve been a bad customer experience because you had to train them on something. Well, now we have have AI engines and AI bots that can be training engines for them.

It doesn’t cost us anything. You can get all your reps and we can get you exactly the reps to test you in a very efficient time frame. So we’ve been able to shrink that. So that’s driven down CAG. What we are in the process of that we haven’t really deployed and you’re not seeing the numbers yet is automation and AI at the point of engagement with the consumer that they’re actually exposed to.

And so we’re testing that. We’re already seeing that at the top of funnel and eligibility verification where we’ve got AI agents who are answering and verifying eligibility and doing some of that work already. And we’re testing further through the funnel because the more I can get the technology to do something, the lower that handle time gets. That handle time is the number one KPI for me to drive efficiency.

Jim, Facilitator, Sidoti and Company: And, you know, you you can talk about agents. You know, I think you added about 400 with the Etelco acquisition last year. Are they all up to speed? And do you think you have enough agents for the upcoming AEP?

Vijay Khotte, CEO, GoHealth: Yeah. So we we onboarded 400 as you know in that time frame in that fourth quarter when we took on this acquisition. We we took them on two weeks before a the annual enrollment period which is for those of you again, we use a lot of acronyms. But AEP is the annual enrollment period. That is where all Medicare beneficiaries have an opportunity to shop.

It’s the most busiest season of the year. And we were able to double their productivity with our platform and our tools in the fourth quarter from approximately 27,000 what they expected in their sell side model to what we produced which was 54,000 with them under our model. So material uptick there. We always have very aggressive performance management of our agents. Only the best get to make it past an AEP.

So we performance manage that and we continue to refine that group as we go through the year. And then we determine how do we want to position ourselves for the next year. And a lot of that is based upon our capacity to do that. Meaning, do we have the capital of economic structures, the contracts with carriers to be able to determine what our support infrastructure can be to drive more volume and have more agents. And so we’ll see.

We still got to read the health plans. The health plans appetite for growth, their willingness to invest in quality services. All that’s going to determine some of that. So it’s still too early to tell about how much capacity we want and how many how much capacity we need. But it’s it’s for sure there’s gonna be plenty of demand.

But our ability to invest and support that with capacity of agents is gonna be dependent on the health plans willingness to do it and our ability to invest in it.

Jim, Facilitator, Sidoti and Company: Right. We’re we’re out of time. I just wanted to ask one more quick one if you could. You know, what do you think is the biggest differentiator between new GoHealth and the other brokers that are out there?

Vijay Khotte, CEO, GoHealth: Yeah. I think I I I think we we hold true to our values beyond what the easy answer is. Right? Sometimes people say, hey. This one’s a better cash profile.

We’ll only sell that. Sometimes they say we’re this one pays me more. So that’s the only one I’m gonna sell. Or they’re gonna say this brand is easier recognized. So I’m only gonna sell that product when the other ones may be better for the consumer, but they take longer to do.

We don’t do that. Right? And I think I think that’s what we do. We have the scale to be able to do the right thing and and really focus on finding a way to make money doing that. Not make money and find a way to make it look good.

And so I think that’s a big differentiator. And we don’t just say that we try to do the right thing. We put our money where our mouth is. And we use technology in a differentiated way to build a huge moat. We have so much data that nobody else has.

We can build a moat with the automation and AI tools that we build that enables standardization, enables high quality, enables strong moral approach to the business while driving efficiency from financial standpoint. So I know there’s a lot there. It’s more than one thing. But I think that’s the combination of what makes us great and unique.

Jim, Facilitator, Sidoti and Company: Okay. Right. Well, thank you again for presenting today. Thank you, John. And thank you for taking the time to do the meetings with us today.

And talk to you every time you turn around, there’s another quarter that’s about to end. So we’ll we’ll talk to you at the end of the quarter.

Vijay Khotte, CEO, GoHealth: Thanks so much, Kim. Appreciate it.

Jim, Facilitator, Sidoti and Company: Alright. Thank you.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.