Centene still expects to lose more than 2M members as Medicaid redeterminations reach midway point

Centene executives said on Tuesday that it's closing in on being halfway through the Medicaid redetermination process.

CEO Sarah London said that about 40%, or 1 million people of those who needed to be processed through the eligibility determinations, have been completed. This aligns with the company's projections, she said, and the insurer expects the "overwhelming majority" of the process to be finished by May 2024.

The company has been closely tracking data on "rejoiners," or people who are returning to the program after being booted, and seeing about 25% of people going through the redetermination process fall into this category. This is due in part ot a crackdown from the feds on procedural disenrollments, which led to people regaining coverage.

London said that for most of these rejoiners there have been no gaps in coverage, preserving continuity of care.

The insurer still expects to lose between 2.3 million and 2.4 million members when the process is completed. London said that people shifting into Centene's Affordable Care Act plans is also on pace with expectations; Centene has estimated that between 200,000 and 300,000 members will make that switch.

"We continue to track in line with our expectations for membership and acuity changes," she said.

Also on the Medicaid front, London said that the team is gearing up for North Carolina's Medicaid expansion, and has tapped a new Chief Growth Officer as it eyes opportunities to expand. Wade Rakes, who currently serves as CEO of Centene's Peach State Health Plan in Georgia, will step into that role.

The insurer posted $469 million in profit for the third quarter, according to its earnings report released Tuesday morning.

That's down from the $738 million reported in the third quarter of 2022, but it did surpass Wall Street's expectations, according to analysts at Zacks Investment Research. Centene also beat the Street on revenue with $38 billion.

By comparison, Centene reported $35.9 billion in revenue for the prior-year quarter.

Through the first nine months of the year, Centene has brought in $2.7 billion in profit and $114.5 billion in revenue, according to the report.

Centene CEO Sarah London said in the release that the results leave the company well positioned for the future.

"Our strong third quarter results demonstrate the positive momentum Centene is generating as we prepare for 2024," she said. "Marketplace growth, effective navigation of redeterminations year-to-date and successful execution against value creation initiatives together position us well to continue advancing our strategic priorities."

In the report, Centene said that while it still has work to do around its Medicare Advantage (MA) star ratings performance, the recently released data are in line with expectations and mark "the first step towards its multi-year goals."

About 87% of its MA members are enrolled in plans with three stars or better, up from 53% a year ago, the company said.

Total membership reached nearly 28 million, according to the report, including 15.2 million people enrolled in Centene's Medicaid plans.

Thanks to the results, Centene is increasing its guidance for the year to at least $6.60 in earnings per share.