Centene reported first quarter 2024 profits of $1.1 billion as membership and premium revenue grew ... [+]
Centene reported first quarter profits of $1.1 billion as membership and premium revenue grew thanks to a big increase in Obamacare enrollment, the health insurer said Friday.
Centene, which sells an array of government subsidized health insurance including individual commercial coverage under the Affordable Care Act known as Obamacare, said total managed care membership held steady 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 a year-ago. That increase of more than one million health plan members helped overcome a decrease of three million enrollees in Centene’s Medicaid coverage for poor Americans.
Centene’s net income, which beat Wall Street analysts’ expectations, was $1.16 billion, or $2.16 per share in the first quarter, compared to $1.13 billion, or $2.04, in the year ago 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 Sarah London said in a statement accompanying the company’s earnings report. “We are pleased to raise full year 2024 guidance as we look to maximize the positive momentum being generated by our core businesses. We are executing against our strategic plans for growth and increasing access to affordable, high-quality healthcare for our members and the communities we serve."
Centene raised its 2024 diluted earnings per share “guidance floor to greater than $5.94 and its 2024 adjusted diluted EPS guidance floor to greater than $6.80,” the company said.
The growth in commercial marketplace, or Obamacare, helped Centene’s “premium and service revenues” increase 4% to $36.3 billion from $35.0 billion in the first quarter of 2023. “The increase was driven by membership growth in the Marketplace business due to strong product positioning as well as overall market growth, partially offset by recent divestitures in the other segment and lower Medicaid membership primarily due to redeterminations,” Centene said in its earnings statement.
Centene, which is a big national player in providing Medicaid benefits to poor Americans, saw Medicaid enrollment drop to 13.3 million compared to 16.3 million in the year ago period thanks largely to the end of the public health emergency.
The Covid-19 U.S. public health emergency kept record numbers of people covered by not kicking anyone off Medicaid for more than three years while Congress and the Biden administration increased and expanded subsidies so more Americans could afford individual Obamacare coverage under the Affordable Care Act. That has helped Centene keep its total health insurance enrollment stable.
The end of the U.S. Public Health Emergency in May of last year after three years of the COVID-19 pandemic is impacting health insurers that have a significant business administering Medicaid coverage for states, which are conducting so-called “Medicaid redeterminations.” Medicaid redetermination, also described as Medicaid renewal or Medicaid recertification, is essentially when people are asked to show they are qualified for such coverage.
