Executives from Centene Corp. told Wall Street securities analysts today that they expect their high-performing Affordable Care Act public exchange plan business to continue to do well in 2018, even if the cost-sharing reduction subsidy goes away.
About 90% of 2017 Centene exchange plan enrollees use the subsidy today, but Michael Neidorff, Centene’s chairman, said the company paid attention to the news in Washington.
“We fully recognized the possibility that the cost-sharing reductions, the CSRs, might not continue to be funded,” Neidorff said. “As such, we planned accordingly.”
Centene filed 2018 rates that exclude cost-sharing reduction subsidy support in every state in which it intends to sell exchange plan coverage in 2018, and rates free from that subsidy have been approved in each of those states, Neidorff said.
“Centene is agile,” Neidorff said.
The cost-sharing reduction subsidy fight will not be an earnings headwind for Centene in 2018, Neidorff said.
Neidorff talked about the subsidy during a conference call with securities analysts, when he went over the company’s third-quarter earnings.
Centene, a St. Louis-based company that has traditionally focused on the Medicaid plan market, is reporting $201 million in net income for the third quarter on $12 billion in revenue, compared with $147 million in net income on $11 billion in revenue for the third quarter of 2016.
The company ended the quarter providing or administering major medical coverage for 12 million people, up from 11 million people a year earlier.
The number of people the company covers through Affordable Care Act public exchange plans has increased to 1 million, from 582,600 people a year earlier.