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Centene Revises Its 2019 Revenue Guidance Upward

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Revenue guidance

On its first-quarter earnings conference call, Centene (CNC) guided for 2019 revenue in the range of $72.8 billion–$73.6 billion, $2.5 billion higher at the midpoint than the company’s previous 2019 revenue guidance of $70.3 billion–$71.1 billion.

Centene has attributed this hike in its guidance partly to $1.0 billion worth of anticipated additional pass-through payments from the State of California and the State of New York in 2019. Additionally, Centene expects a $700 million revenue benefit associated with the higher membership retention rate of its health insurance market place business. Finally, Centene expects a revenue benefit of $500 million associated with a change in the number of plans from three to two in Iowa’s managed Medicaid contracts starting on July 1, 2019. According to Centene’s first-quarter earnings conference call, beneficiaries will be distributed equally between Centene and the other participant in Iowa’s managed Medicaid program.

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Analysts expect Centene’s revenue to rise 20.62% YoY (year-over-year) to $72.51 billion in 2019, 8.16% YoY to $78.43 billion in 2020, and 11.55% YoY to $87.49 billion in 2021.

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Health insurance marketplace business

According to Centene’s first-quarter earnings conference call, it had 1.97 million members enrolled in its health insurance marketplace plans across 20 US states at the end of the first quarter, implying a YoY rise of 365,000 members (or 35%) and a sequential rise of 510,000 members.

According to Centene’s first-quarter earnings conference call, ~90% of its beneficiaries are enrolled in its silver-tier plans. The company expects to continue being a leader in the health insurance marketplace business in 2019.

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