Centene narrowed its second quarter loss from the prior-year period as the insurer continues with its “value creation plan” to boost profit margin.
Despite the $172 million loss, Centene beat analyst expectations in a number of key metrics and raised its financial outlook for the remainder of the year. It expects to benefit from the sale of specialty pharmacy Pantherx. That deal closed this month.
Membership grew by 7% to a total of 26.4 million members driven by growth in Medicaid enrollment as members are shielded from coverage losses thanks to pandemic-era protections that bar states from kicking members off the program. Total Medicaid membership climbed to 15.4 million members and is the insurer’s largest service line.
Medicaid growth helped spur a 16% increase in revenue, topping $36 billion for the quarter.
The insurer’s medical loss ratio, an important measure of how much is spent on care, decreased to 86.7% from 88.3% in the prior-year period.
Centene joins UnitedHealthcare in reporting a year-over-year decrease in the overall medical loss ratio in Q2.
Shares of Elevance, formerly known as Anthem, fell when it reported an uptick in MLR for the second quarter, notching the largest intraday decline in two years, according to Bloomberg.
For Centene, COVID-19 costs were down by about two-thirds from the first quarter of this year, executives told investors on Tuesday’s earnings call. Utilization of healthcare services has largely returned to normal, executives said, but there are still some areas that lag behind pre-pandemic levels including non-emergent ER visits. Executives said they believe telehealth and improved primary care uptake contribute to the trend.
As working habits have changed following the onset of the pandemic, Centene said it has trimmed its real estate footprint — for both leased and owned facilities — and has incurred a $1.45 billion impairment charge.
On Monday, Centene announced plans to sell some of its international business units as it continues to divest non-core assets, part of its larger plan to improve the long-term profit margin of the firm.