Centene reported that the COVID-19 pandemic continues to lower traditional medical use.
However, healthcare use is starting to trend back to pre-pandemic levels, said Chief Financial Officer Jeffrey Schwaneke during an investor call Tuesday. The effect of the COVID-19 pandemic includes lower traditional medical utilization, partially offset by higher testing and treatment costs associated with COVID-19.
Enrollment in Centene’s Affordable Care Act (ACA) plans has also increased to 2.2 million, up from 1.8 million in the third quarter of last year.
But executives said it was too soon to say whether major job losses from the pandemic will spark a larger shift in enrollment onto ACA plans. Open enrollment starts Nov. 1, and Centene has expanded its marketplace options in nearly 400 new counties, bringing the total number of states offering the insurer's plans to 22.
“It has been bouncing around a lot,” said CEO and President Michael Neidorff on an investor call Tuesday, referring to the plan enrollment.
He said that during the onset of the pandemic back in March you had people who were on furlough but kept their benefits, including health insurance. Some of the employees who permanently lost their jobs moved on to Medicaid.
“It is just a swinging variable and too many factors,” Neidorff said.
Centene Corporation earned $568 million in profit in the third quarter, a huge boost compared to its third-quarter 2019 earnings of $95 million.
Centene generated $29.1 billion in total revenue for the third quarter, a 53% bump over the same time period last year. A major reason was the closure of its acquisition of WellCare Health Plans in January, a deal valued at $17.3 billion.
That deal greatly boosted Centene’s Medicaid managed care business, which soared by 65% in the third quarter from 9.9 million members in 2019 to 25.2 million.
Centene's performance in the quarter surpassed Wall Street expectations.
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Centene also reported getting $398 million as part of a settlement with the federal government over risk corridors. The Supreme Court ruled in April that the federal government was obligated to pay plans promised funds under the Affordable Care Act’s risk corridors.
"As we benefited from the one-time risk corridor settlement this quarter, we've made the decision to reinvest the proceeds in the growth of our business as well as the communities in which we serve and live,” Neidorff said in a statement.
Centene projects full-year earnings of between $4.90 and $5.06 per share and revenues between $109.8 billion and $111.4 billion.