Despite what seems like unprecedented uncertainty facing the healthcare industry, Centene’s CEO isn’t particularly worried about the effect that politics will have on his company’s business.
Michael Neidorff began the insurer’s first-quarter earnings call on Tuesday by reassuring investors that even if Congress is successful at repealing and replacing the Affordable Care Act, Centene is well-equipped to weather what’s to come.
“This particular legislative process is very complicated and will likely take some time to play out if a final bill is signed into law—and I emphasize if,” Neidorff said.
Centene, a major player in the Medicaid managed care business, could take a hit if Congress passes a bill that repeals the ACA’s expansion of Medicaid eligibility. Yet Neidorff said he doesn’t think that will happen given the likely pushback from many governors.
Further, any Medicaid changes that are likely to happen will no doubt result in more state flexibility, which Neidorff said aligns “nicely” with Centene’s decentralized approach to managed care.
Overall, Centene reported profits of $139 million in Q1, and revenues for the quarter grew 69% year-over-year to reach $11.7 billion—mainly due to the company’s acquisition of Health Net last year. The insurer’s managed care membership grew to 12.1 million as of March 31, a 5% increase from the same time last year.
Centene’s Affordable Care Act exchange business, meanwhile, is continuing to grow, Neidorff said, noting that as of March 31, the company had 1.2 million beneficiaries, an increase of 500,000 compared to the same time last year.
Neidorff also said he sees nothing at this point that would prevent Centene from participating in the exchanges in 2018.
However, that’s position that other major insurers do not share. Anthem and Cigna are both on the fence about their participation next year, and Humana has announced it will not offer individual market plans in 2018.
Part of what is making many insurers nervous is uncertainty about funding for cost-sharing reduction payments, which could end after a court case challenging their legality is resolved. The subsidies are currently part of lawmakers’ negotiation over an appropriations measure they need to pass to avoid a government shutdown.
Neidorff, though, told those on Tuesday’s call that he thinks there is bipartisan support for continuing to fund CSRs, and said it’s not likely they’ll be eliminated. “It is time to move past the unfounded headline volatility,” he added.