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Shares of Clover Health (NASDAQ:CLOV) are trading about 3% higher at the Tuesday open after the healthcare company provided a business update today.
The company introduced partial guidance for 2023 as it sees non-insurance revenue between $750 million to $800M. The insurance revenue is expected to be between $1.15 billion and $1.2B, higher than the most recently issued 2022 guidance range of $1.0-1.1B.
Insurance MCR (medical cost ratio) is expected to be in the range of 89% – 91% in 2023 while non-insurance MCR is seen in the range of 98% – 100%.
“We expect to build upon our positive momentum from 2022 to deliver continued improvement in our financial performance across both our Insurance and Non-Insurance lines. During the most recent Medicare Advantage Annual Enrollment Period, we intentionally priced our Insurance plans with profitability in mind as opposed to growth,” said CEO Andrew Toy.
“Due to this strategic shift, we expect to start 2023 with Insurance membership approximately in line with our Insurance membership as of January 1, 2022, and we expect favorability in 2023 MCR and growth in 2023 Insurance top-line revenue. On our Non-Insurance business, we are continuing with our previously disclosed strategic shift to reduce the number of participant providers we accept into the program in connection with an increased prioritization of profitability”, added Toy.
The company said it will issue complete guidance at a later date. In the meantime, it will continue to “prioritize operating efficiencies to reduce adjusted SG&A and optimize liquidity.”
