What’s Centene Expecting of Its Medicare and Medicaid Businesses?

Medicare business

On its first-quarter earnings conference call, Centene (CNC) guided for almost flat MA (Medicare Advantage) memberships in 2019 on a YoY (year-over-year) basis. However, it expects 2020 to prove to be an inflection point for its MA business. It also expects to return to a four-star MA rating in 2020.

Centene’s joint venture with nonprofit health system Ascension and its acquisition of WellCare Health Plan are also expected to bolster its MA business in 2020.

What’s Centene Expecting of Its Medicare and Medicaid Businesses?

According to its first-quarter earnings conference call, at the end of the first quarter, Centene had 394,000 members enrolled in either its MA plan or its Medicare-Medicaid plan across 20 US states, a YoY rise of ~50,000 members but a sequential fall of 23,000 members. The company is currently working on repositioning its acquired Fidelis Care MA business to secure a four-star rating.

Centene expects to strengthen its MA and Medicare Part D capabilities, mainly in its existing markets, through the acquisition of the WellCare Health Plan. After the acquisition, the company expects to serve 5 million Medicare members and earn almost 15% of its $100 billion 2019 pro forma revenue from this business.

Medicaid business

In the first quarter, Centene reported 8.58 million Medicaid members, a YoY rise of 21%, or 1.5 million members.

According to its first-quarter earnings conference call, the company has managed to re-procure its Medicaid contract in New Hampshire, which will cover 180,000 members and will become effective on September 1, 2019. The company had 83,000 members enrolled in the previous managed Medicaid program in New Hampshire at the end of the first quarter.

According to its first-quarter earnings conference call, Centene managed to win managed Medicaid contracts in two major regions in North Carolina, and it has plans to actively appeal to expand its presence in the remaining areas of the state. The company will be one of the two key players in the managed Medicaid program in Iowa effective July 1, 2019.