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Good morning everyone, and welcome again to the 44th annual J.P. Morgan Healthcare Conference. My name is Matt McCune, and I’m an associate here at JPM. And it’s my pleasure to introduce our next presenting company, Clover Health. Joining us today from Clover is CEO Andrew Toy. And CFO Peter Kuipers. They’ll be running us through a brief set of materials, and we ask that you hold off on any Q&A until the end. With that, I’ll hand it over to you guys.
Andrew Toy:
All right. Thank you very much for joining us today. My name is Andrew Toy. Peter is sitting at the desk over there. I’m the CEO of Clover Health. I’d love to take you through where we are, what we think we achieved last year, where we’re going this year. So. The usual statements apply here. We’re public, of course, like we may make some statements.
So Clover, we’re a Medicare Advantage company. We’re a payer. Last year I stood up here and I said, what are we really focused on doing? So we are focused on Medicare Advantage market. We are. We had just reached adjusted EBITDA profitability and we were saying to ourselves, okay, the core fundamentals of our model are differentiated. It’s incredibly it’s a varied approach, one that not many people are taking but have huge advantages. And we think that if we can get the profitability, which we did, the next phase is going to be a return to growth. That’s what I talked about last year. We’re going to be returning to growth. And it’s also growth not just for growth’s sake, but it’s disciplined growth in our core markets that enables us to feel good because our management capabilities around our technology and around improving clinical outcomes are all available in the markets where we grew.
I already talked about the fact that we are going to sustain our adjusted EBITDA profitability and grow that in order to hit the GAAP profitability line this year, we feel good about that. Also, HEDIS is quality, a measure of clinical quality. We are the number one PPO in the country in Medicare Advantage on HEDIS quality. That’s for the second year in a row. So we’re feeling very good about the fact that while we are improving the business, we are also improving the outcomes and the clinical quality that we deliver to our members.
And then I will also talk about our Counterpart Health business, where we bring our technology platform to other plans, other payers, and I’ll talk about that at the end. But together, all of these things are based around the fact that we are at our heart oriented around technology, oriented around the assistant called Clover Assistant. Counterpart Assistant is another way we refer to it. And this technology, this AI-driven technology, is at the core of all of these achievements.
So what does that technology allow us to do? We aim to empower every physician with technology to identify, manage, and treat chronic diseases earlier. This is fundamentally what makes us different. We’ve talked about it for years and years. It is our technology vision. It’s not technology for technology’s sake. It’s not AI for AI’s sake or data for data’s sake. It is bringing together interoperability, bringing together, adding on AI, adding on capabilities and tools for physicians, all to deliver this outcome: treating chronic diseases earlier, identifying them earlier, which allows us to change the cost curve, which allows us to deliver that nation-leading HEDIS scoring. So when you diagnose something earlier, you manage it earlier, you manage it more cost effectively, you deliver a better outcome. That earlier dimension does a lot of work.
I think we’re one of the only health plans who will say, this is the core of our mission. I will also note that that technology enables us to say every physician, whereas others sort of say, “Well, how do you use technology to identify the good ones and the bad ones and steer to the good ones?” That’s not what we aim to do. What we aim to do is actually help physicians improve their own performance. And that’s why we add that line that technology can be in every physician thing, and not a “select your physicians” thing. Those are very different approaches. Health plans often think about selecting physicians versus helping them all improve. And we’re about helping them all improve. That’s how we deliver all these results.
So we have our AI-powered assistant. We have a significant addressable market. That’s why we’re able to grow so much within Medicare Advantage. We are thinking very strategically about which markets we’re going to grow within. And we are also delivering care through our own clinical arm into all settings. Every physician in the wide network. And we have added care into the home as well, which is something we deliver through our own employees. So we feel like we can deliver care into almost every site with almost every clinician, all around the same clinical platform: the assistant.
So this is a really important slide. This is what explains how it all ties together. I’ll spend some time on it. My own background: I’m the CEO of Clover Health. I am a computer scientist by training. I’m probably one of a few, maybe the only computer scientist really running a health plan. And so when we think about this, there’s a lot of people working on how to bring AI into health care. But you need to bring it all the way into health care. You need to deliver a real result for a real human being. And so we are absolutely, in my mind, the AI leader in Medicare Advantage.
We are focused on using the data available to us: longitudinal data via claims, interoperability networks that bring data that are getting better and better every month, bringing data into our systems, cleaning that data, analyzing that data, and applying AI to all of that in the cleaning, in the aggregation, in the insight generation. And we train our models to support improved clinical outcomes, earlier detection and management. And it’s built to be the core of what we do from the very beginning. It’s cloud native. It’s ML native.
The nice thing about that technology is that as AI and LLM technology improves, which we all know is improving every single day, we can add that to our core platform. It’s not that we are building all of those models ourselves. We can use foundational models, add on top, train our own models, do prompting modification, because all of this is a rising tide that improves our own platform. So as LLMs have come online in the last couple of years, we have integrated those into our own clinical platform and use them to supplement our own data and our own insights, because we already have the engine. This is just a way to turbocharge that engine.
When you have all those capabilities at the fingertips of physicians, which is what we’re able to do today, it means, and this is what the line at the top says, we can empower any doctor, any clinician on the wide network. So we often talk about the wide network. Why is that important? Because in our core business, which is the health plan business, what people see is: when they go shopping, they don’t shop and say, “Hey, I want an AI-powered health plan.” Maybe one day they will, but they don’t right now. They say, “I want doctor choice.”
I would guess that the vast majority of people in the US at this conference, all of you, when people pick their health plans, they generally pick the PPO. Or if you pick the HMO, it’s because you settle for the HMO. You don’t pick the HMO, you settle for the HMO. People want the PPO. And why? Because they want physician choice. They want to know that if there’s an expert they want to go to, they can go to that expert. They don’t want referrals, they don’t want gatekeeping, they don’t want all of these things. What they want is to think and know that they can go to any physician. And so that’s what we focus on: 98% of our membership is within PPO.
The PPO is more challenging for cost of care. It is more challenging for HEDIS and clinical scores. Our technology approach on the left-hand side allows us to do this because we are so focused on that as the core of the business. It enables us to give that technology—and we give it away effectively for free to physicians when they use it. We see their performance improve, and I’ll talk about that more in a second. If you believe that we can give that technology to anybody and their performance improves—they’re detecting diseases earlier—they’re identifying diabetes earlier—what that means is we are able to deliver the cost of care and clinical quality of an HMO within a PPO construct. We have effectively removed the trade-off of the PPO. So we get the benefits that people want as a product. We get the benefits of the HMO in terms of managing clinical quality and total cost of care. Taken together, we feel very comfortable that we can grow in a market segment that others find challenging, in a market segment that is desired by consumers, and do that in a very sustainable way—improving our profitability while maintaining business discipline.
All of these are the greatest hits of aging. As we all get older, we are going to develop one or more of these conditions. That is just a function of being human; it is a function of aging. Diabetes, metabolic syndrome, CHF, heart disease, CKD, kidney disease, COPD, lung disease. These aren’t the only conditions people will develop, but these are the major diseases of aging. We have published a number of papers about how doctors using Clover Assistant are able to identify diseases earlier, manage them earlier, and when they’re managed earlier, we deliver better outcomes. For example, when a doctor using Clover Assistant identifies kidney disease earlier, it maintains more years of healthy kidney function. Identifying diabetes earlier allows better A1C regulation. All of these are things we publish papers on, comparing physicians using our tool to physicians not using our tool. We are constantly investing and making that better year after year.
All of this is tied to why we feel comfortable returning to growth. We delivered profitability and are now growing significantly. We grow in a disciplined way around where we have a lot of physicians using Clover Assistant. This year, as you can see on this slide, we grew around 53%, from about 100,000 members to just over 150,000 members. First-year members are typically the most challenging. When people first come to us, their total cost of care and clinical outcomes are the worst because they are not yet fully managed by us. It takes time to get them onto our management program. We still anticipate that this year there will be a significant improvement in the contribution profit within that first membership cohort. Between those two factors, we feel really good about that contribution profit adjustment. That is a major driver of how we intend to deliver net income and profitability this year. Gap profitability is clear. This is a huge amount of growth for almost any Medicare Advantage plan. We feel good because it is in our core markets. We had a lot of retention, and we feel good about the contribution profit of first-year members. All of these dimensions on this slide affect this.
We are going to have a four-star payment year for 2026, the first four-star payment year. There was a significant CMS rate notice affecting the benchmark and an increase in the Part D direct subsidy for payment year 2026. We had very high retention, which is the main driver of our profitability and contribution profit. We increased Clover Assistant coverage last year in our core markets. We are still not fully at scale; there’s room to improve efficiency, which is further amplified by AI-driven efficiencies.
New members are contribution-profit negative. We want to get that to break-even. We are focused on improving contribution profit, reducing losses on new members. Returning cohorts are already really strong. The core profit engines are the returning cohorts improving year on year. Clover Assistant is the reason these cohorts get more profitable year on year. Early diagnosis means that even if costs rise slightly initially—because medications or doctor visits increase—you flatten the curve earlier. You reduce disease progression earlier. Compared to plans not doing this, you see significant improvements in total cost of care and clinical outcomes. This multi-year, compounding effect is central to our philosophy.
As more cohorts come in—less profitable initially and improving over time—they layer as expected. Mature vintages drive a very mature cohort, slightly less mature cohort, slightly mature cohort, all improving year on year. New members continue to feed the start of this stack. Because our approach is technology-based, we can improve each cohort, even older vintages, by developing features and releasing them within Clover Assistant. Others do not have access to this because improvement is constrained by vendor speed or physician group progress. Our software allows rapid iteration and improvement, every sprint, every month.
Counterpart Health is a fully owned subsidiary where we bring our technology into plans that are not our own plan. Our vision is to bring Clover’s AI technology and the Assistant to every Medicare-eligible life. We already have the number one PPO in the country in clinical outcomes. Many other plans want to improve their HEDIS scores. Our compounding cohort dynamic and earlier diagnosis of disease can be brought to others. Our technology stack is cloud-native, multi-tenant, ML engines are modern, built for scale.
Why bring it to others? It’s a competitive advantage for our own plan, but we are disciplined about where we grow. Our main plan grows in 3-5 states; Counterpart can bring technology to every other region by partnering with local plans to improve clinical quality, earlier diagnosis, and total cost of care. This is already happening, not just a future vision. We have multiple pilots and deployments in markets outside of our plan. Momentum continues, with more physicians being rolled out daily.
We know where the resonance is: top-of-premium Medicare Advantage payers or risk-bearing providers. These are the two primary targets for Counterpart. We can deploy our technology, show expected improvements, start with a pilot, and then move to production. Challenges they ask us to solve include MCR pressure, loss ratio pressure, and stars performance.
The beating heart of our plan gives a huge advantage in developing, investing in, and rolling out software. This is not replicable if the software department was standalone. Looking ahead, we want to maintain market-leading self-funded growth. Returning cohorts will fund new cohorts, which fuels the growth engine. We intend to deliver GAAP net income profitability in FY 26. We will maintain industry-leading clinical performance, being number one PPO, and we will continue investing in technology and expanding Counterpart nationally. We found product-market fit; it’s about execution, disciplined profitable growth, investing in AI to drive technology performance, and bringing it to others via third-party sales. This is a unique proposition only Clover can offer.
I’ll stop there and jump to questions.
Q: So you just walked us through strong AEP results with 53% membership year-over-year growth in Clover’s path to its first full year of GAAP net income profitability this year. As you look at the much larger new member cohort entering into 2026, what gives you confidence that underlying cohort economics improve year over year and that this growth is sustainable?
A: Yeah. Thanks. So I think there’s one thing here where a lot of growth can be scary within the Medicare Advantage industry. A lot of people are asking this question right now, which is, “But do you feel good about the growth?” And the answer is yes. I do feel good about the growth. Coming back here, this is a simple way to look at the answer to that question. There are a number of different factors, not just one single factor that controls for that. But this has a lot of them. We have the four-star payment year. This year we have the CMS rate update, which was higher than last year. The Part D direct subsidy is higher than last year, which adds revenue. We have really strong retention within core markets, which should be emphasized and is fantastic. Growth within core markets performs better and better year on year, and we are improving year on year. While we have a lot of growth, many things are fundamentally different this year than last year as well. We are investing in growth; we want that first-year cohort to compound. We also have a significant number of tailwinds that make us feel very confident. Of course, we always look year on year to see how much we want to grow and how we want to price our product during the bid, but this year, we wanted to grow, and I think we delivered on that.
Q: And then there’s obviously a lot of attention recently on AI across healthcare, including both consumer-facing and clinician-facing tools focused on engagement and info access. From your perspective, how do you think about the role of those tools relative to clinician-facing platforms like Clover Assistant?
A: Yeah, that’s an interesting one. ChatGPT Health was announced just before this conference. Claude and other Anthropic offerings are being offered. The way I think about that is two different dimensions. Number one, all improvements to the core models, the foundational models, accrue to our benefit. We can use those foundational models. We’re almost customers of those foundational models. You should expect as those foundational models improve, it’s a natural rising tide for what we provide. We do not compete with those models. If I was a startup, I might think differently because I would ask, “How does what I offer differentiate from what the foundational models can offer?” That might be how a startup thinks. But at Clover, because we have our own plan, any advancement in the technology can be deployed for the benefit of our members and our business. That’s a very nice place to be.
The second dimension is that any patient-facing model, any direct-to-consumer model, tends to be highly complementary to what we do. Remember, we use AI and data to make physicians better. We are a clinician-facing product, and we can do that because we sit deeply within the care stack as a payer. That is where we want to sit. Don’t get me wrong, there are great things you can do with direct-to-patient AI, and we think about them all the time, but our core DNA is clinician-facing. Many of these offerings could supplement our assistant platform, but our main focus is not overlapping; our main focus is improving clinical outcomes via our clinician-facing tool.
Q: Many healthcare AI tools are still in pilot phases or limited deployment. You’ve shown Clover Assistant operating at scale across a wide network of PPOs. What have you learned from deploying AI in real clinical environments that others may be underestimating or misunderstanding?
A: Yeah. So we talk about AI a lot. I came from Google and worked on the cloud team. We talked about AI, ML, all those things. The key thing I love about Clover is that we focus on the results of AI. Others talk a lot about AI, and there’s great stuff happening, but we focus on making people’s lives better. We focus on earlier diagnosis. Our papers are about whether there was an earlier diagnosis. Did something happen? It’s not academic. Did something literally happen? Our data is based on when an actual doctor, not employed by us but in the wide network, used our tools. Did someone’s life get better? The answer is yes, and that drives the business. Total cost of care and clinical outcomes improve.
When we talk to members, very few say, “I want AI.” Seniors want to feel healthier, live longer, do more things, and have affordable healthcare. Our AI capabilities help us deliver affordability, access, and better outcomes. When we talk to physicians, most do not say they want more AI. They say, “I wish I had more information about my patient more quickly.” We can give them that. “I wish there was a simple way to know what to look at before I treat this patient in this encounter.” We can give them that. “I wish there was a more clinical approach to engage with the care plan and see how this person is being managed.” We can give them that. What we’ve learned is AI is critical because it can deliver what clinicians and patients actually want. Rarely is AI the end goal itself.
Q: There seems to be a question in the audience. How are people learning about this at the point when they’re purchasing and deciding which plan to enroll in during AEP, especially with so many $0 premium MA plans? How are they choosing Clover?
A: Great question. $0 premiums are a little bit table stakes right now. People do look at copays and coinsurance. They look at premium first, then PPO versus HMO. Many know from their doctors that HMOs may limit access. They prefer PPO. Next, they consider copay or coinsurance. A PPO might allow a doctor visit but with higher cost out of network. We try to keep costs very manageable and improve access across the entire network. Supplemental benefits matter too, like gym memberships or OTC cards, but those are becoming table stakes. People are shopping based on accessibility, cost, and network.
We’re out of time, so I appreciate the questions and everyone’s interest in Clover. Thank you.

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