Centene Corporation executives believe the insurer is well-positioned to navigate the COVID-19 pandemic, though they're planning for its effects to seep well into 2021.
CEO Michael Neidorff said on a call with investors Tuesday that caseloads for the novel coronavirus are not taking the trajectory many in the industry expected earlier this year, as it was believed infections would see a lull in the summer before a likely second wave in the fall.
Instead, cases have spiked throughout the summer so far in many regions of the country, Neidorff said.
"It is increasingly clear that we are going to be living with this pandemic for some time, and probably well into next year," he said on the earnings call. "We are planning our business with that in mind."
He said the insurer is expecting variance quarter-to-quarter as the pandemic situation continues to evolve.
Recent surges in virus cases are also impacting utilization rates, Neidorff said, which began to creep back into normal numbers in the latter half of Q2. Healthcare utilization increased in May and June was "virtually a normal month," he said.
Utilization, however, has taken a downturn in July as virus cases begin to spike again, Neidorff said.
Centene earned $1.21 billion in profit for the second quarter, according to the company's earnings release.
That's a significant boost from the $495 million in profit it reported in the second quarter of 2019. And despite more than doubling its quarterly revenue year over year, the insurer is looking ahead to what Neidorff called "choppy" financial waters amid COVID-19.
Centene's quarterly profit also just missed Wall Street expectations.
Neidorff said in a statement that the soaring profits are due in large part to far lower care utilization in the quarter.
"Looking ahead, while we expect the national economic trajectory to remain choppy as we move through the second half of the year, we believe that the return of utilization by our members seeking treatments will be regionally driven," he said.
"We continue to provide the highest quality of care to our members during this critical time and are well-positioned to respond quickly to evolving dynamics as we execute on our growth strategy. We are further supported by the strength of our balance sheet and solid financial position," he added.
Second-quarter earnings make up the bulk of Centene's profit for the year so far, with the insurer earning $1.25 billion in profit over the first six months of 2020.
Centene brought in $27.7 billion in revenue for the quarter, a figure that's also up significantly in the second quarter compared to the prior-year quarter, in which the insurer earned $18.4 billion in revenue. Centene has earned $53.7 billion in revenue for the first half of the year, up from $36.8 billion in the first half of 2019.
Membership is also up significantly on the back of Centene's purchase of WellCare Health Plans, which closed earlier this year. Centene reported 24.6 million members across all of its lines of business in the first six months of 2020, up from 15 million through the first six months of 2019.
That represents an increase of 64%, Centene said. Of that, 2.2 million people are enrolled in Affordable Care Act exchange plans, and 12.6 million are enrolled in one of its Medicaid plans.
Centene is projecting between $109 billion and $111.4 billion in revenue for the year and between $4.76 and $4.96 in earnings per share.