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Centene has 39,700 paid QHP enrollees

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Centene Corp. says it ended the first quarter with 139,400 Patient Protection and Affordable Care Act (PPACA) plan enrollees.

About 99,700 enrolled in Medicaid through PPACA Medicaid access expansion programs in California, Ohio and Washington state.

Another 39,700 enrolled in individual “qualified health plan” (QHP) coverage through the new PPACA public health insurance exchange system.

Centene (NYSE:CNC) — a company that has focused on running Medicaid plans, Children’s Health Insurance Program plans, and other government plans — is selling QHPs through the state-based exchanges in Massachusetts and Washington state.

The company is selling QHPs through exchanges run by the U.S. Department of Health and Human Services (HHS) in Arkansas, Florida, Georgia, Indiana, Mississippi, Ohio and Texas.

Centene executives talked about its early PPACA program experience Tuesday during a conference call with analysts.

Centene held the call to talk about its first-quarter earnings. The company is reporting $33 million in net income for the quarter on $3.5 billion in revenue, up from $23 million in net income on $2.5 billion in revenue for the first quarter of 2013.

The company ended the quarter providing or administering health coverage for about 2.9 million U.S. residents, or about 0.9 percent of all U.S. residents, up from 2.6 million people a year earlier.

About 4.6 percent of its Medicaid enrollees were consumers who came in through PPACA Medicaid expansion programs.

The 39,700 exchange QHP enrollees were Centene’s only commercial health insurance plan enrollees. All of those enrollees have paid their premiums, and the company says it expects to have about 70,000 paid QHP enrollees by June 30.

During the conference call, analysts asked executives about reports that the QHP enrollees might be sicker and taking more prescription drugs than comparable enrollees in traditional commercial health insurance plans.

“The demographics of our enrollees are generally in line with our pricing expectations,” Centene Chairman Michael Neidorff said during the call.

The average age of the enrollees is 43, and about 80 percent qualify for PPACA premium subsidies, Neidorff said.

K. Rone Baldwin, an executive vice president at Centene, said some widely reported analyses have compared QHP enrollees with ordinary commercial health plan enrollees.

Centene did not think QHP enrollees would be like ordinary commercial plan enrollees, Baldwin said.

“We priced for something that had higher morbidity than that,” Baldwin said. “So, in some ways, what we’re seeing is not out of line with what our expectations were.”

Centene’s actual first-quarter medical claims were down a little, mainly because the 2013-2014 flu season was less severe, and because bad weather kept people from going to the doctor this winter, executives said.

In a report filed with the U.S. Securities and Exchange Commission, Centene included uncertainty about the PPACA “three R’s” risk management programs — a reinsurance program, a risk-adjustment program, and a risk corridors program — in a description of PPACA-related risk factors.

The programs may not be adequately funded and may not be effective, the company warns.

During the conference call, Baldwin said it’s too early for the company to know how the three R’s will affect the company’s performance in 2014 or its coverage prices in 2015.

Executives at UnitedHealth Group Inc. (NYSE:UNH), a large carrier that’s selling QHPs through only five exchanges, said last week that UnitedHealth might sell through more exchanges in 2015.

Baldwin said Centene “may or may not expand the number” of exchanges it serves.

“If we do, it’s going to be very modest in terms of how we expand,” Baldwin said.

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