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Centene expects to lose an estimated 2.2 million Medicaid members during the redetermination process over the next 18 months, which would significantly dial back the insurer’s pandemic-era growth.
The company on Tuesday reported having nearly 16 million Medicaid members at the end of 2022, including around 3 million gained since the onset of the pandemic. It estimates its marketplace products will gain 200,000 and 300,000 lives during redeterminations, CEO Sarah London told analysts during the company’s fourth-quarter earnings call Tuesday.
“A lot of that is because of a belief that the vast majority of members who redetermine will first go commercial,” London said. “We just need to see how the data starts to play out and whether there are any adjustments to that as we see folks coming over onto the marketplace products.”
Before states can begin to disenroll ineligible people from Medicaid starting April 1, Centene has been working with state and community partners to facilitate member transition and coverage continuity, she said. Centene is also prioritizing member outreach for those likely to be eligible for Medicaid and tracking redetermination-related activities through reporting and membership dashboards.
For the fourth quarter, Centene said it lost $213 million, or 38 cents a share, compared with year-ago profit of $599 million, or $1.01 a share. Revenues totaled $35.6 billion, up from $32.6 billion.
For the year, Centene recorded a profit of $1.2 billion, or $2.07 a year, compared with $1.3 billion, or $2.28 a share in 2021.
Annual revenue increased 15% to $144.5 billion, from $126 billion in 2021. The increase is largely attributed to a surge in Medicaid and Medicare membership, as well as Centene’s January 2022 acquisition of Magellan, London said.
The company ended 2022 with 21% more Medicare Advantage members than in 2021.
Centene predicts it will price with 2024 Medicare Advantage losses in mind as a result of poor star scores. A number of insurer ratings fell this year due to more heavily weighted consumer experience surveys, the enforcement of stricter pre-pandemic standards and disenrollment.
“We will, most certainly, be pricing for a negative margin in Medicare Advantage in 2024 temporarily, and we don’t expect to grow Medicare Advantage in 2024 and it likely will shrink a little,” CFO Drew Asher said during the call.
Given that the preliminary rates for Medicare Advantage plans in 2024 are “less favorable than recent years,” Centene intends to provide feedback to the Centers for Medicare and Medicaid Services to advocate for a larger boost to plan revenues, London said.
Over the past year, Centene has reduced its real estate footprint by 70% and sold numerous businesses.
In January, it finalized the sales of Magellan Specialty Health for more than $600 million in cash and stock; Centurion, its prison healthcare business; and HealthSmart, a third-party health plan administration business.
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