By Mariam Sunny and Leroy Leo
(Reuters) -Centene Corp said on Friday it was working to enroll people back into government-backed Medicaid plans after the end of pandemic-relief measures left hundreds of thousand of members without coverage.
Medicaid memberships, the largest contributor to Centene’s revenue, were hit by the removal of pandemic-related relief measures on April 1 that rendered several members ineligible for insurance coverage.
The relief withdrawal allowed states to resume their routine check to determine if people qualified for the government-backed health insurance plan for low-income people or not.
Centene lost a little more than 260,000 Medicaid members in the second quarter due to redetermination, and had around 16 million members under Medicaid as of June 30.Shares of Centene declined 5.2% to $66.24 in morning trade following its earnings, but the company said it has launched a major outreach effort to recapture some people who may still be eligible for Medicaid but were disenrolled.
“Year-to-date, we have made 9 million outreach attempts, with early indications of higher-than-normal member engagement,” said CEO Sarah London in the earnings conference call.
The company on Friday, however, beat Wall Street estimates for second-quarter profit, helped by strong membership growth in its commercial marketplace business even as a fall in Medicaid memberships hurt.
“Medicaid redeterminations have started cutting into its Medicaid population and look likely to constrain its results in the near-term, especially in 2024,” said Morningstar analyst Julie Utterback, but added that the commercial business growth appeared robust.
Centene’s commercial plans saw a 62% jump in memberships to 3.73 million, as of June 30.The insurer also raised its full-year earnings adjusted profit forecast by 5 cents to at least $6.45 per share on expectations that premium collections will be higher this year from commercial health insurance business.
On an adjusted basis, the company earned $2.10 per share in the second quarter, above estimates of $2.03.
(Reporting by Mariam Sunny and Leroy Leo in Bengaluru; Editing by Shinjini Ganguli and Shounak Dasgupta)