GoHealth Q3 2025 Earnings Call: Contradictions Emerge on Medicare Advantage Strategy, Cash Management, and Acquisition Plans

Guidance:

• Expect a return to revenue growth when the Medicare Advantage market rationalizes and health plans stabilize cost structures and rates.
• Prioritize retention, quality over volume, and cash preservation; shifted capacity into GoHealth Protect and retention-focused programs.
• Continue investing in AI, automation and platform capabilities to improve agent effectiveness and shorten ramp time.
• Maintain liquidity position (~$32M cash on hand plus access to $40M super-priority facility) and deploy capital via risk-adjusted, cash-on-cash returns.
• Positioned to pursue consolidation opportunistically to capture scale, reduce duplicate costs and improve back-book cash flow.

Business Commentary:

• Medicare Advantage Market Dynamics:
• GoHealth reported a strategic decision to scale back its Medicare Advantage (MA) activity, focusing on retention rather than growth, due to tightening health plan economics and reduced commission structures.

• This decision was driven by health plans prioritizing retention, stable member profiles, and unit economics, leading to reduced prefunded marketing and adjusted broker compensation.

• Revenue and Market Positioning:

• 
• GoHealth's Protect product line showed continued growth, although not explicitly quantified in the call, supported by a strategic focus on retention and enhanced consumer peace of mind during Special Election Period (SEP).

• The company's strategic pivot focused on maintaining market share and enhancing existing consumer relationships, prioritizing retention over short-term submissions.

• Technology and Operational Efficiency:

• GoHealth invested in AI and automation to improve agent effectiveness, consumer experience, and member retention, contributing to a significant reduction in overhead while maintaining strategic flexibility.

• This investment was aimed at maintaining platform efficiency and reducing costs to align with changing health plan priorities and market conditions.

• Health Plan Engagement and Industry Consolidation:

• GoHealth's strategy aligned with health plan priorities, focusing on special needs plans, retention, and quality over quantity, supported by a strong balance sheet and lenders' support.
• The company positioned itself for industry consolidation, suggesting that the fragmented broker landscape presents opportunities for reduction of duplicative costs and enhanced consumer experience.

Sentiment Analysis:

Overall Tone: Neutral

• Management emphasized disciplined caution and optionality: "We chose the disciplined path." They signaled optimism about positioning to rebound: "we believe GoHealth is positioned to return to revenue growth..." and cited concrete liquidity: "approximately $32 million of cash" and "$40 million of new capital."

Q&A:

• Question from Robert McGuire (Granite Research, LLC): So we've seen slowing and even contraction in parts of the Medicare Advantage market this year. Vijay, can you just give us an idea of your view of the Medicare Advantage growth trajectory over the next 12 to 24 months? And what catalysts could reaccelerate that growth? And what capabilities and investments best position GoHealth as the market stabilizes with retention and value-based plans?
  Response: MA growth depends on health plans stabilizing cost structures and obtaining appropriate rate adjustments; GoHealth expects a short-term reset over 12–24 months and is positioned via technology and special-needs focus to align when plans reaccelerate.

• Question from Robert McGuire (Granite Research, LLC): Protect, it looked like it continued to grow in the third quarter. Can you give us a deeper discussion on the key drivers of that growth and how you're balancing your focus on Protect during AEP with a more retention-oriented MA posture? And then lastly, how we should think about Protect's 2026 revenue contributions and which quarters could grow or strongest throughout the year?
  Response: GoHealth Protect growth is driven by complementary seasonality and partner distribution, allowing the company to shift focus seasonally (MA during peak AEP, Protect in SEP/OEP) while preserving retention-first MA posture.

• Question from Patrick McCann (NOBLE Capital Markets, Inc., Research Division): First, if you wouldn't mind, I know you've spoken about it already a little bit, but if you could talk a little bit about some of the more -- the detailed reasons why you decided to pull back on the MA side of things. And then I guess if you could look at it from 2 different perspectives. On the one hand, what are the implications for you if you read the market correctly. But on the other hand, what would the consequences be if your assessment ultimately proves to be incorrect?
  Response: They pulled back because health plans prioritized retention, many preferred plans were non-commissionable, and unit economics deteriorated; if right they avoided cash burn and preserved the book, if wrong they can re-ramp but would have forgone some growth.

• Question from Patrick McCann (NOBLE Capital Markets, Inc., Research Division): I appreciate that, Vijay. And then finally, could you talk a little bit about why you think the industry should consolidate and what specifically positions GoHealth to be a leader in that consolidation?
  Response: Industry consolidation would remove duplicative fixed costs and tech spend; GoHealth believes its scale, platform, refreshed board and stronger balance sheet position it to lead integrations that improve back-book cash flow.

• Question from Benjamin Hendrix (RBC Capital Markets, Research Division): We've heard from carriers this quarter with Humana kind of setting forth the most direct messaging about slowing new sales to protect the economics of their existing members and also, in some cases, suspending broker relationships ahead of AEP. We just wanted to get an idea of how pervasive that kind of mentality is across your carrier base, the degree to which you're seeing that in other carriers. And then if Humana is kind of the more -- just what that weighting looks like in your book in terms of the importance to your Encompass platform and other business.
  Response: Most major plans share Humana's mentality—favoring slower, targeted growth and retention over broad new member acquisition—so GoHealth aligned by emphasizing stability and retention.

• Question from Benjamin Hendrix (RBC Capital Markets, Research Division): That makes sense. And also, I appreciate your commentary about maintaining flexibility while also significantly reducing kind of costs related to the workforce. I wanted just to talk to you about kind of the mechanics of a re-ramp, like when you -- when we need to get back into this -- into kind of a full sales mode, kind of what are the hurdles and the mechanics of getting re-ramped back to full capacity in the future?
  Response: Investments in standardized technology, AI/automation and training have materially shortened agent ramp time (from ~16 weeks historically) so GoHealth can rapidly scale agents when health plans provide line-of-sight.

• Question from James Sidoti (Sidoti & Company, LLC): So I'm trying to figure out how you navigate the next 12 to 24 months until enrollment start to ramp again. Where is your cash balance today? And what do you think the cash burn will be over the next few quarters?
  Response: They reported approximately $32M cash at Q3 end, have access to additional draws under the lender deal, and plan disciplined cash management to maintain liquidity and optionality (no specific burn guidance given).

• Question from James Sidoti (Sidoti & Company, LLC): And how much capital is available to you from that super priority facility?
  Response: The facility provided $40M of new accessible capital.

• Question from James Sidoti (Sidoti & Company, LLC): So between the cash you have on hand, the additional cash, do you think that's enough? And why? Why do you think that's enough?
  Response: Yes; management believes the ~$32M plus $40M facility preserves capabilities and supports investments and consolidation opportunities while they deploy capital only for high-confidence, risk-adjusted, cash-on-cash returns.

• Question from David Storms (Stonegate Capital Partners, Inc., Research Division): I just want to start, there's been a lot of emphasis on retention as a core part of the model for this year. Can you maybe walk through some of the logistics, some of the stuff that you're seeing on the ground to support this retention, thinking between conversation structure, any post-enrollment engagement support, stuff like that? And then maybe any early indications of success from some of the more recent cohorts that you're applying this to?
  Response: They shut off broad new-lead queues, implemented focused follow-ups for back-book members, changed compensation to reward retention, enhanced training/tech, and say early carrier data shows retention above field benchmarks.

• Question from David Storms (Stonegate Capital Partners, Inc., Research Division): There's been a lot of folks, and I think we've all noticed the focus on the shift into special needs plans. How do you feel about your strategic positioning there? Maybe what differentiates GoHealth's ability to serve these SMP members effectively? And any training positioning, anything you're doing to maybe be ready for that shift there would be very helpful.
  Response: GoHealth cites long experience with dual and chronic special needs plans plus proprietary PlanFit and PlanGPT tooling that verify eligibility, rank products and route leads to experienced agents, giving them differentiated capability for SMP populations.

Contradiction Point 1

Medicare Advantage Growth Strategy

It highlights a shift in the company's growth strategy regarding Medicare Advantage, which could impact investor expectations and operational focus.

What specific reasons led to your decision to reduce M&A activity? What are the implications if your assessment is accurate or inaccurate? - Patrick McCann (NOBLE Capital Markets, Research Division)

2025Q3: The decision to pull back was based on health plans' focus on retention over new enrollment, especially in light of lower prefunded marketing and adjusted broker compensation. - Vijay Kotte(CEO)

How do the covenants of the new loan compare to the previous ones? - David Storms (Stonegate Capital Partners, Inc., Research Division)

2025Q2: We are in a good position to pick up more broker production in the off season, which should give us more leverage to go after larger healthy contracts. - Vijay Kotte(CEO)

Contradiction Point 2

Cash Management and Financial Flexibility

It involves changes in the company's financial strategy, specifically regarding cash management and financial flexibility, which are critical for operational decisions and investor confidence.

How should GoHealth navigate enrollment over the next 12 to 24 months, and what is its current cash balance? - James Sidoti (Sidoti & Company, LLC)

2025Q3: GoHealth has approximately $32 million in cash as of the end of Q3, with access to additional capital from a new lender agreement. - Vijay Kotte(CEO)

What are management's top priorities after strengthening the balance sheet? - James Sidoti (Sidoti & Co.)

2025Q2: We ended the quarter with approximately $33 million in cash and cash equivalents. - Vijay Kotte(CEO)

Contradiction Point 3

Acquisition Strategy and Focus

It highlights a change in the company's acquisition strategy and focus, which could impact its growth trajectory and market positioning.

What is the Medicare Advantage growth trajectory for the next 12-24 months? What catalysts could reaccelerate growth? What capabilities and investments best position GoHealth as the market stabilizes with retention and value-based plans? - Robert McGuire (Granite Research, LLC)

2025Q3: We are looking for targets that align with our values and improve capabilities through diversification of product, talent, contract assets, size, and strategic fit with our platform. - Vijay Kotte(CEO)

Are acquisitions a higher priority now, and do the new Board members support this? - Robert McGuire (Granite Research)

2025Q2: Yes, the new Board members and the Transformation Committee are more focused on pursuing acquisitions. - Vijay Kotte(CEO)

Contradiction Point 4

Medicare Advantage Growth Trajectory

It involves differing perspectives on the future growth trajectory of Medicare Advantage, which is a critical revenue driver for GoHealth.

What's your outlook for Medicare Advantage growth over the next 12-24 months? What catalysts might accelerate that growth? What capabilities and investments position GoHealth well as the market stabilizes around retention and value-based plans? - Robert McGuire (Granite Research, LLC)

2025Q3: Future growth depends on health plans' ability to rationalize cost structures and achieve appropriate rate adjustments from the government. The market's current CMS projections suggest a decrease in market penetration, but this is likely short-term...Stable membership and growth are anticipated over 12 to 24 months as cost structures stabilize and health plans focus on specific products and geographies. - Vijay Kotte(CEO & Director)

What are your thoughts on United's changes and expectations for this year's AEP compared to last year? - Rob McGuire (Granite Research)

2025Q1: We expect a disruptive AEP, but need clarity on health plan behavior. - Vijay Kotte(CEO)

Contradiction Point 5

GoHealth Protect's Revenue Contributions

It involves differing expectations regarding GoHealth Protect's revenue contributions and growth trajectory, which are critical for the company's diversification strategy.

How should we expect GoHealth Protect's 2026 revenue contributions to shape up, and which quarters will see the most growth or be strongest? - Robert McGuire (Granite Research, LLC)

2025Q3: GoHealth Protect's growth is driven by enhancing consumer peace of mind with complementary products. Its seasonality is offset by Medicare Advantage, allowing effective allocation of resources during AEP and OEP. The strategy will continue into 2026, with GoHealth Protect as a key focus during SEP and OEP. - Vijay Kotte(CEO & Director)

Are you partnering with specific carriers for GoHealth Protect, and how does it impact your marketing strategy? - Pat McCann (Noble Capital Markets)

2025Q1: We expect significant contributions from GoHealth Protect. We expect rapid scaling and significant contributions. - Vijay Kotte(CEO)