Centene Profits Eclipse $1 Billion Thanks to Huge Obamacare Enrollment

Centene reported first-quarter profit of $1.1 billion as membership and premium income grew on a big increase in Obamacare enrollment, the health insurer said Friday.

Centene, which sells a variety of government-subsidized health insurance, including commercial individual insurance coverage under the Affordable Care Act known as Obamacare, said total managed care memberships remained flat at 28.42 million at the end of the first quarter of this year, compared to 28.45 million. at the end of the first quarter of 2023.

Centene’s enrollment in individual coverage under the Affordable Care Act, also known as Obamacare, grew what Centene calls its commercial marketplace business to 4.3 million members from 3 million last year one year. This increase of more than one million health plan members helped overcome a decline of three million enrollees in Medicaid coverage for hundreds of poor Americans.

Centenes’ net income, which beat Wall Street expectations, was $1.16 billion, or $2.16 a share, in the first quarter, compared with $1.13 billion, or $2.04, in the of last year’s quarter. Total revenue rose to $40.4 billion from $38.9 billion a year ago.

“Centene’s first quarter results demonstrate the strength of our diversified platform,” Centene Chief Executive Officer Sarah London said in a statement accompanying the company’s earnings report. We are pleased to increase guidance for 2024 as we seek to maximize the positive momentum generated by our core. We are executing against our strategic plans to grow and increase access to affordable, high-quality health care for our members and the communities we serve.”

Centene raised its 2024 diluted EPS guidance floor to more than $5.94 and its 2024 adjusted diluted EPS guidance floor to more than $6.80, the company said.

Growth in the commercial market, or Obamacare, helped Centenes premium and service revenue rise 4% to $36.3 billion from $35 billion in the first quarter of 2023. The increase was driven by membership growth in the marketplace business due to strong product positioning and strong product positioning. Overall market growth, partially offset by recent divestments in the other segment and reduced Medicaid enrollment, primarily due to redeterminations, Centene said in its earnings statement.

Centene, which is a major national player in providing Medicaid benefits to poor Americans, saw Medicaid enrollment drop to 13.3 million from 16.3 million in the last year thanks in large part to the end of the public health emergency.

The US public health emergency Covid-19 kept a record number of people covered by not kicking anyone off Medicaid for more than three years, while Congress and the Biden administration increased and expanded grants so that more North – Americans could afford individual Obamacare coverage under the Affordable Care Act. This has helped Centene keep its total health insurance enrollment stable.

The end of the US public health emergency in May of last year after three years of the COVID-19 pandemic is affecting health insurers that have a significant business administering Medicaid coverage for states, which they are conducting so-called Medicaid redeterminations. Medicaid redetermination, also described as Medicaid renewal or Medicaid recertification, is essentially when people are asked to prove that they qualify for that coverage.

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