- Centene said its acquisition of Fidelis Care and expansion in other states helped fuel membership and revenue growth for the first quarter of 2019 — reaching 1.8 million more beneficiaries compared to the first quarter of 2018. The St. Louis-based health insurer now covers nearly 15 million people throughout the country, according to earnings information released Tuesday.
- Revenue jumped 40% to $18.4 billion compared with a year earlier, while earnings rose 53% to $522 million, or $1.24 per share. The company beat Wall Street expectations on both measures.
- Centene CEO Michael Neidorff identified the states in which divestitures are likely, naming Nebraska and Missouri, as the company seeks to buy its rival WellCare for $17.3 billion. Neidorff said Centene has initiated preliminary discussions with the U.S. Department of Justice and regulatory authorities in some of its largest states. So far, the payer has submitted formal filings seeking approval for the acquisition in five states.
Centene revised its 2019 guidance in part driven by the higher-than-expected retention of customers in its health insurance exchange business. The company now expects revenue for the year to be between $72.8 billion and $73.6 billion, reflecting an increase of $2.5 billion at the midpoint.
Centene's Affordable Care Act exchange business continues to flourish, covering nearly 2 million customers at the quarter's end, about 365,000 more compared to a year earlier. Centene's core Medicaid managed care unit now covers about 8.6 million beneficiaries, nearly 1.5 million more from a year ago.
Heading further into 2019, Neidorff highlighted some of the company's contract wins. The payer was successful in again obtaining a statewide Medicaid contract in New Hampshire to cover 108,000 beneficiaries through a new five-year contract that will begin Sept. 1. On July 1, Centene will begin Medicaid managed care operations in Iowa.
Neidorff also waded into politics, as Democratic presidential hopefuls for 2020 continue to push for universal health coverage. Days earlier, similar commentary from UnitedHealth Group's CEO spooked the market, sending it and other healthcare stocks plummeting.
Neidorff was more restrained.
"At this time, we believe there is little appetite in Washington to revisit comprehensive healthcare reform," he told investors on the conference call. "With the political class turning its attention to the 2020 presidential and congressional elections, we welcome the discussion on ways to improve and expand government health programs."