Centene, which continues to grow both its individual market and Medicaid business lines, joined its for-profit insurer peers in reporting solid fourth-quarter and full-year financial results on Tuesday.
The insurer said its adjusted diluted earnings per share was $0.97 for the quarter, which beat the Wall Street consensus estimate by $0.04 despite being slightly lower than the $1.19 per share it reported in fourth-quarter 2016. Its full-year 2017 adjusted diluted EPS was $5.03, compared to $4.43 in 2016.
The company also saw its quarterly revenue rise 8% year-over-year to $12.8 billion, and its full-year revenue rose 19% to $48.4 billion.
Echoing the plans of other major insurers, Centene CEO Michael Neidorff said the company will use the extra cash it will receive from tax reform to fund employee-focused initiatives like leadership development and invest in areas such as digital health and analytics.
On the policy front, Neidorff predicted that Congress is highly unlikely to resume its efforts to repeal and replace the Affordable Care Act this year, adding that the company refused to be distracted by the political “noise” in 2017.
It was indeed a year of growth for Centene, which saw both its Medicaid and individual market membership rise for an overall membership growth rate of 7% over 2016. The insurer also expanded to serve additional ACA marketplaces in 2018.
With that in mind, Neidorff noted that he expects the regulatory environment to be more favorable this year as Congress focuses on smaller-scale policy tweaks instead of wholesale reform. The repeal of the individual mandate in 2019 will have “minimal impact” on the company, according to Neidorff, who added that the trend of giving states greater flexibility to regulate their health insurance markets aligns well with Centene’s local approach to business.
However, Centene itself has faced criticism despite its rising commitment to the ACA exchanges. The insurer was recently sued by customers of its Ambetter-branded plans who claim that those policies mislead enrollees about the adequacy of their provider networks.