Centene Corporation CEO Michael Neidorff told investors Tuesday that the environment for the rest of 2021 could be "choppy" as the delta variant of COVID-19 spreads.
Neidorff said that an expert epidemiologist that has worked with Centene during the pandemic said that delta has a 1,260 times greater concentration within the respiratory system when compared to the original strain of COVID-19.
On average, a person infected with delta passes the virus on to between four and eight people, compared to an average of 2.5 people for the original strain, he said. Neidorff added that 83% of COVID-19 cases are of the delta variant, up from just 10% a month ago.
He echoed public health officials in calling this current surge of COVID cases a "pandemic of the unvaccinated."
Hospitalizations have increased by 57% in the last month and deaths have increased by 19% in the last week. In the overwhelming majority of cases, these are people who have not been vaccinated; 97% of those currently hospitalized and 99.5% of recent deaths have been among the unvaccinated, Neidorff said.
He said this data highlights just how much work is left to be done to address vaccine hesitancy.
"You have seen us execute strongly throughout the pandemic and that will not change, especially as it remains clear that the pandemic is not over," he said.
Centene posted a $535 million loss in the second quarter of 2021, down from its $1.2 billion haul in the prior-year quarter.
Despite the loss, the company is the black for the first half of the year, according to its earnings report released Tuesday morning, with $164 million in profit through the first two quarters. By comparison, Centene boasted $1.3 billion in profit for the first half of 2020.
On a per-share basis, that represents a loss of 92 cents. The results fell short of Wall Street analysts' predictions, according to Zacks Investment Research, which projected earnings of $1.41 per share.
Centene did beat the Street on revenue for the quarter, however, reporting $31 billion. That's up from Q2 2020 revenues of $27.7 billion.
Neidorff called the results "solid" in a statement, saying that the company is still tracking the potential impacts of COVID-19.
"We have seen near-term pressures in our Marketplace business where utilization continues to trend above baseline, and we are monitoring COVID variants closely as the pandemic continues to evolve," he said. "Our scale and diversification provide a solid foundation to execute through this environment as we focus on implementing various initiatives to deliver on our stated margin goals."
As of June 30, Centene's membership sat at 25.4 million, representing an increase of 800,000, or 3%, compared to the first half of 2020.
As a result of the performance, Centene maintained its earnings guidance for the year of between $5.05 and $5.35 per share. It did raise its revenue guidance to between $123.3 billion and $125.3 billion.
Of note in the quarter, the insurer reached settlement agreements in two states over alleged overpayment in Medicaid. Centene will pay $88 million to Ohio and $55 million to Mississippi to resolve the allegations against a pharmacy benefit manager subsidiary, Envolve Pharmacy Solutions.
In the settlement, Centene claims no fault. The insurer said it has set aside $1.1 billion to resolve similar claims in other states.