Centene Corporation reported a profit in its third quarter numbers Tuesday. The payer’s bottom line increased from $196 million a year ago to $239 million in the third quarter this year.
Centene said its revenues increased 10% to $11.9 billion compared to a year ago.
Managed care membership grew by nearly 875,000 (8% increase) to 12.3 million members compared to a year ago.
Centene has experienced membership growth and moved into two new states this year. Nebraska and Nevada account for nearly 100,000 new members for the insurer.
Most of the payer's membership remains in Medicaid managed care. Nearly 9.3 million members are in the Medicaid population. Slightly more than one million members are in Affordable Care Act (ACA) exchange plans. That number will grow next year as Centene is expanding its ACA footprint. While other major players pulled back or out of the exchanges for 2018, Centene is entering Kansas, Missouri and Nevada, as well as expanding in Florida, Georgia, Indiana, Ohio, Texas and Washington.
Centene’s ACA exchange membership skyrocketed from 537,200 at the end of last year to 1.2 million members by the middle of 2017 and now a little more than 1 million.
One potential reason Centene has found success in the ACA market while other payers have struggled is that Centene specializes in Medicaid managed care. The patient population in ACA plans are more like members in Medicaid managed care than employer-based plans. That is likely helping Centene with ACA plans, while other payers that specialize in employer-based plans are fleeing the exchanges.
Though Centene’s earnings report is largely positive, the company did see its health benefits ratio (HBR) increase, which means a higher percentage of premium revenues spent on care. Centene said its HBR increased from 87% a year ago to 88% this year. In a statement, the payer said the increase “is primarily a result of new or expanded health plans, which initially operate a higher HBR, an increase in higher acuity members and a premium rate reduction for California Medicaid expansion” that began in July.
In another piece of Centene news, the latest CMS Medicare Star Ratings gave the company’s Health Net of California a lower Medicare Advantage rating on one of its plans. It dropped from four stars to 3.5 stars. The lower rating will mean a lower quality bonus payment in 2019. Centene said it plans to appeal the star rating and blamed the rating drop on a penalty associated with a plan audit in 2015.