Centene reported fourth quarter profits of $45 million as membership and premium revenue grew thanks to a big increase in sales of Obamacare coverage, the health insurer said Tuesday.
Centene, which sells an array of government subsidized health insurance including individual commercial insurance coverage under the Affordable Care Act known as Obamacare, said total managed care membership increased slightly to 27.47 million, compared to 27.06 million at the end of the fourth quarter of 2022.
Centene’s enrollment in individual coverage under the Affordable Care Act, which the health insurer calls its “commercial marketplace” business nearly doubled to 3.9 million members from 2 million a year ago.
Such growth helped Centene’s “premium and service revenues” increase 5% to to $35.3 billion from $33.6 billion in the fourth quarter of 2022. Meanwhile, marketplace premium and service revenue rose 68% to $7.4 billion in the fourth quarter compared to $4.4 billion a year ago.
For the year, Centene reported profits of $2.7 billion, or $4.95 per share, on $154 billion in revenue.
“The (fourth quarter revenue) increase was driven by membership growth in the Marketplace business due to strong product positioning as well as overall market growth, partially offset by recent divestitures in the Other segment and lower Medicaid membership due to redeterminations,” Centene said in its earnings statement.
Centene, which is a big national player in providing Medicaid benefits to poor Americans, saw Medicaid enrollment drop to 12.75 million compared to 14.26 million in the year ago period thanks largely to the end of the U.S. public health emergency almost nine months ago.
The U.S. public health emergency kept record numbers of people covered by not kicking anyone off Medicaid while Congress and the Biden administration increased and expanded subsidies so more Americans can afford individual Obamacare coverage. That has helped Centene keep its total health insurance enrollment growing.
Enrollment is now shifting nationally given the end last May of the U.S. public health emergency that boosted the number of Americans covered when Medicaid redetermination temporarily ended three years ago. Medicaid redetermination, also described as Medicaid renewal or Medicaid recertification, is essentially when people are asked to show they are qualified for such coverage.
Still, Centene has overcome the enrollment upheaval as states work through the redetermination process with earnings that beat Wall Street analysts’ expectations.
“Our fourth quarter and full year 2023 adjusted EPS results are slightly ahead of previous guidance, providing our organization with tangible, positive momentum as we enter 2024,” Centene Chief Executive Officer Sarah M. London said. “Looking ahead, we are excited by the opportunities we see within our core businesses as we execute against our strategic plan, fortify our foundational assets and drive cost savings. With increased focus and reduced complexity, Centene is well positioned to continue navigating the dynamic operating landscape while creating shareholder value.”
