Centene Corporation, which covers 9.3 million Medicaid recipients, reported total revenues of $11.7 billion in the first quarter of 2017, which represents 69% growth compared to the same period in 2016, according to the company’s 2017 first quarter results.
The insurer decreased its health benefits ratio, also known as medical loss ratio, from 88.7% last year to 87.6% in the first quarter of 2017.
Centene is providing managed care to 12.1 million members, an increase of 5% compared to the same period in 2016. The company has members in 25 states, including nearly 3 million members in California and 1.2 million members in Texas.
Centene’s first quarter results are good news for managed care companies in Medicaid and health insurers in the ACA exchanges. Having so many Medicaid members means that any healthcare reform that includes Medicaid will likely affect Centene.
The St. Louis-based company also has about 1.2 million members in the ACA exchanges market. Any changes to cost-sharing subsidies in the exchanges could also cause problems. President Donald Trump has threatened to stop cost-sharing reductions (CSR) to insurance companies in the individual market unless Democrats work with Republicans on a new healthcare reform plan. Insurance companies say that any cuts on cost-sharing reductions will cause insurers to increase rates or drop out of the individual market.
While some insurers have talked about dropping out of the ACA exchanges in 2018, Centene noted that they plan to continue in the program. Centene CEO Michael Neidorff was quoted in Axios, stating, "We see nothing at this point to prevent us from proceeding from our 2018 marketplace participation."
Still, that quote presumes CSRs will get funded. While a recent report said that the exchanges market is beginning to stabilize, there are still concerns in the market. For one, there's the matter of what will happen with CSR payments. On an earnings call on Wednesday morning, Anthem warned premium rates may rise in the individual market if the CSRs are not paid out:
Anthem on earnings call: "Rates could increase by an additional 20 percent or more if CSRs are not funded"— Peter Sullivan (@PeterSullivan4) April 26, 2017