Centene has added 320K members on ACA exchanges under special enrollment period

Centene Corporation posted its first-quarter earnings report Tuesday morning. (Centene)

Centene Corporation has added 320,000 new members in its marketplace plans so far this year, thanks in large part to the extended special enrollment period launched due to COVID-19.

CEO Michael Neidorff said on a call with investors Tuesday morning that the additional enrollment window is expected to be a continued tailwind for Centene over the course of this year. 

He said Centene is pleased to be operating in a "supportive environment" for the Affordable Care Act's exchanges, which should prove a boon for the company.

"Centene is a clear leader in new enrollment on the federal exchange," Neidorff said.

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Another anticipated tailwind for the year is in Medicaid enrollment, due to additional flexibilities in eligibility afforded as part of the pandemic. Centene is also expecting to see care utilization remain below typical levels in the second quarter of the year.

Neidorff warned, however, that it's unlikely that these tailwinds continue beyond early 2022 and said the insurer would dig deeper into what it's expecting at its investor day this summer.

"This a year with unique drivers … which we cannot be certain can continue throughout all of 2022," he said.

Centene posted $699 million in profit for the first quarter of 2021, up from $46 million in the prior year quarter.

Revenues were also up compared to the first quarter of 2020, according to the insurer's earnings release posted Tuesday morning. Centene brought in $30 billion in revenue for the first quarter of this year, while it reported $26 billion in revenue in the first quarter of 2020.

The results fell short of Wall Street expectations for earnings but beat projections for revenue, according to analysts at Zacks Investment Research.

"While we remain vigilant around the unique dynamics of the current operating environment, we are confident in the strength of our diversified healthcare enterprise and the compelling avenues for growth and value creation across our portfolio," Neidorff said in a statement.

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"We continue to drive forward our technology strategy and the combination with Magellan remains on track to close in the second half of 2021, providing us with additional capabilities to expand access to care and nurture a fully integrated model across behavioral and physical health," he said.

Centene unveiled the $2.2 billion deal to acquire Magellan in January, and the insurer said the deal would enhance its specialty care capabilities and its ability to care for members with chronic conditions.

The acquisition would, if finalized, create one of the country's largest behavioral health platforms, with 41 million unique members.

Centene reported 25.1 million members in the first quarter of 2021, up 5%, or 1.3 million people, from the prior-year quarter.

Due to the results, Centene raised its guidance for the year to between $5.05 and $5.35 in earnings per share and between $120.1 billion and $122.1 billion in revenue for 2021.