The health insurer Centene plans to expand
into 100 new counties and enter a new state – Nevada - to expand privatized
Medicare coverage to seniors in 2020.
Centene is joining the parade of established
health plans and startups looking to take advantage of new rules that allow
Medicare Advantage plans to offer more benefits to seniors.
“We are no longer simply a Medicaid healthcare
company,” Centene CEO Michael Neidorff told analysts Tuesday morning on the
company’s second-quarter earnings call.
To be sure, Centene is perhaps best known for
administering Medicaid coverage for the poor via contracts with states across
the country. Medicaid membership was up 18% in the second quarter to nearly 8.5
million compared to the year-ago period, Centene reported Tuesday.
Centene is also the nation’s biggest player in
Obamacare, the subsidized individual coverage under the Affordable Care Act
with more than 1.9 million members. That business grew from 1.5 million at the
end of the second quarter last year.
Driven by strong performance in the ACA's
individual coverage and Medicaid, Centene said profits rose to $561 million, or
$1.36 per share, compared to $360 million, or 90 cents in the year ago quarter.
Revenue jumped 29% to $18.4 billion.
Centene expects medical costs of its members
to be stable and announced plans to raise earnings guidance for the rest of the
year based on improving margins from its Obamacare business.
Looking ahead, Centene sees promising growth
in Medicare Advantage. Its Medicare business now, which includes Medicare
Advantage and related coverage for seniors rose by more than 50,000 in the
quarter to nearly 400,000.
Centene will also greatly expand its Medicare
Advantage business following the close of its acquisition of WellCare Health
Plans. Centene executives say they expect to have to divest some operations of
the combined company to win regulatory approval but executives didn’t disclose
Tuesday what those divestitures will be.
Centene’s expansion into new regions to offer
Medicare Advantage is the latest expansion for such plans, which contract with
the federal government to provide extra benefits and services to seniors, such
as disease management and nurse help hotlines with some also offering vision,
dental care and wellness programs. And now insurers are rolling out more
supplemental benefits in their Medicare Advantage plans following rule changes
implemented.
"Next year, we plan on expanding into 100
counties in existing states—and adding one new state—Nevada," Neidorff
told analysts Tuesday morning. "We will begin our joint venture with
Ascension in 4 geographies in 2020. Further, Centene will return to a four
star MA parent rating—and the addition of WellCare’s top performing MA
portfolio will bolster our MA platform."
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