Centene beat the Street even as Medicaid redeterminations pose a significant headwind heading into the back half of 2024, according to its earnings report released Friday morning.
The company reported $1.1 billion in profit as well as $39.8 billion in revenue for Q2. That's up from $1.05 billion in profit and $37.6 billion in revenue for the second quarter of 2023, according to the report.
At the mid-year, the insurer has earned $2.3 billion in profit and $80.2 billion in revenue. By comparison, it brought in $2.2 billion in profit and $76.5 billion in revenue in the first six months of 2023.
Centene is down nearly 3 million Medicaid members as of June 30, according to the report. The company had 13.1 million Medicaid enrollees as of Q2 this year, compared to 16.05 million at the end of the second quarter in 2023.
As such, premium revenues from Medicaid were down by 8% in the quarter, according to the report. Centene reported $20.25 billion in revenue from Medicaid in Q2 2024, compared to $21.9 billion in the prior-year quarter.
Centene also reported an elevated medical loss ratio of 87.6% was also driven by Medicaid, as redeterminations drives higher acuity. The company is working with states to match rates to acuity as the unwinding comes to an end.
"While we have work to do in Medicaid as redeterminations wind down, the overall performance of the diversified portfolio enables us to remain on track for 2024 adjusted diluted EPS guidance," said Sarah London, CEO of Centene, in the press release. "At the same time, we continue to make important progress on operations and quality that positions us well to serve our members and deliver long-term profitable growth."
Despite the challenges, London said on the company's earnings call Friday morning that Centene sees significant opportunity ahead to continue to expand. It's also secured some notable wins in its bid process, including in Florida, Michigan and Kansas.
Centene has also shown that it can take hold of those opportunities when presented by winning contracts in states like Oklahoma and Delaware, she said.
"I think this performance really bodes well as we look ahead to what we think are really exciting organic growth opportunities for Medicaid," London said.
There were bright spots in the quarter, however, according to the report. Centene's marketplace plan enrollment reached 4.4 million, up from 3.3 million in Q2 2023.
Revenues from its commercial segment were also up 49%, hitting $8.5 billion. The company reported $5.7 billion in premium revenue from commercial plans in the second quarter of 2023.
Centene reaffirmed its 2024 earnings guidance of at least $6.80 per share, according to the report. It also boosted its revenue outlook, and now expects between $155 billion and $157 billion in revenue for the year.