In reporting third-quarter earnings on Oct. 23, Centene Corp.,
the largest player in the Affordable Care Act (ACA) marketplace, said its
exchange membership now tops 1.5 million — up from 1.02 million a year ago. The
insurer said its major expansion of the profitable business line will result in
coverage in 20 states for 2019, including entry into four new states and
expansion in six others.
Overall, Centene's earnings beat Wall Street's expectations, but
its stock slumped due to mixed full-year guidance and a medical loss ratio of
86.3%, among other issues.
Chairman and CEO Michael Neidorff noted the third quarter was
the first full quarter with Fidelis Care, New York's largest Medicaid plan,
officially acquired by Centene in July after securing regulatory approvals.
Centene also remains focused on building a successful Medicare
business, he added. As of Sept. 30, the insurer covered 417,000-plus Medicare
enrollees, up 86,000 or 26% year over year. The insurer expanded its geographic
footprint and expects to be in 21 states in 2019, he said.
Neidorff stressed that Centene's "operating metrics in the
quarter were strong" — a point that he says may have been
"obscured" by three offsetting adjustments: a $110 million charge
related to an expired contract with Veterans Affairs, a $140 million pre-tax
benefit related to a California Medicaid in-home support services program
reconciliation, and a $30 million contribution to its charitable foundation.
For the quarter ended Sept. 30, Centene's adjusted net earnings
increased 56% to $375 million, up from $239 million a year ago. Third-quarter
revenues rose 36% year over year to $16.2 billion, and total managed care
membership rose 17% or 2.1 million to 14.4 million.
With the process of integrating Fidelis well under way, Centene
may be ready for more merger and acquisition activity since the company
"appears to have bandwidth to integrate additional assets," Jefferies
analyst David Windley said in a note to investors after the call.
From Health Plan Weekly
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