- Thanks in part to growth in its core Medicaid business, Centene's third quarter revenue and earnings beat analyst estimates, according to financial information released Tuesday.
- However, the payer's medical loss ratio fell short of Wall Street's expectations. The MLR increased to 88.2% from 86.3% during the prior-year period.
- CEO Michael Neidorff said on an earnings call the company's $17 billion acquisition of WellCare is ahead of schedule and may close sooner than expected. Only two states — Illinois and New Jersey — still need to approve the deal.
Centene grew its membership to 15.3 million members, an increase of about 884,000 covered lives, or 6%, from the third quarter of 2018.
The growth came from the company's health insurance exchange business and expansions and new programs in states including Arkansas, Illinois, Iowa and New Mexico.
The gains were partially offset by the health insurer fee moratorium in 2019, however, the company said.
The St. Louis-based insurer, which is heavily focused in government sponsored health insurance programs, reported net income of $95 million on revenue of nearly $19 billion for the third quarter, a 17% increase from the prior-year period.
The company did report a non-cash impairment charge of $271 million related to its U.S. Medical Management business.
Still, the company has noted a continued increase in MLR year-over-year but also sequentially from the second quarter of this year. Executives attributed the increase to non-operational items.
One analyst described the MLR miss as "sizable." David Windley with Jefferies added in a note released Tuesday morning "the good news is that none of these suggest an increase in core cost trends."
Neidorff said the company's appeal on Medicaid contracts in North Carolina was successful and it will expand its operations into the Raleigh-Durham area, bringing its total footprint in the state to three regions.