Centene Continues to Expand Individual Major Medical Operations

Centene Corp. will sell individual major medical coverage in four more states in 2019, and it will be the parent of a major player in the New York state individual major medical market.

The moves mean that Centene will be offering individual coverage through the Affordable Care Act public exchange plan programs in 20 states.

Executives talked about their individual major medical market areas Tuesday, during a conference call with securities analysts. Centene held the call to go over its third-quarter earnings.

What is Centene?

Centene is a St. Louis-based health insurers that has focused on the Medicaid plan market. It began expanding in the individual major medical market in 2014, when the ACA public exchange system came to life.

In the individual major medical market, Centene has aimed at serving low-income exchange plan users, and relatively high-income exchange plan users, who may move back and forth between Medicaid plans and exchange plans throughout the year.

Centene acquired Health Net Inc., traditional health insurer, in 2016. Because of the Health Net deal, Centene ended up with more commercial group health business and other types of commercial health insurance business on its books.

Centene completed a $3.8 billion acquisition of Fidelis Care, a nonprofit health plan controlled by the Catholic Diocesan Bishops of New York State, in July. Fidelis has been a leader in the New York state Medicaid plan market. The carrier has also been active in the New York state Medicare plan and ACA exchange plan markets.

How were Centene’s earnings?

Centene is reporting $16 million in net income for the third quarter on $15 billion in revenue, compared with $201 million in net income on $11 billion in revenue for the third quarter of 2017.

The company ended the quarter providing or administering health coverage for 14 million people, up from 12 million people a year earlier.

Commercial plan enrollment increased to 2.1 million, from $1.7 million a year earlier.

Earnings dropped partly because of the expiration of a Health Net care coordination contract with the U.S. Department of Veterans Affairs.

What’s Centene saying about ACA exchange plans?

Michael Neidorff, Centene’s chief executive officer, said during the conference call that Centene expects 2019 to be a strong year for Ambetter, the unit that handles the company’s ACA exchange plan business.

The company will be operating in North Carolina, Pennsylvania, South Carolina and Tennessee for the first time.

The company will also be increasing the number of counties it serves in Florida, Georgia, Indiana, Kansas, Missouri and Texas.

“Our strategy remains focused on the low-income subsidized population,” Neidorff said.

New York state, like Minnesota, offers relatively low-income exchange plan users an alternative to its ACA exchange plan coverage: a Basic Health Plan program.

An ACA exchange offers individual policies from commercial health insurers.

A Basic Health Plan program resembles a managed Medicaid buy-in program for people who earn a little too much to qualify for Medicaid.

New York state’s Basic Health Plan program enrollment is much bigger than its exchange plan enrollment.

Centene executives said Fidelis exchange plan premiums will be increasing more than Ambetter brand exchange plan premiums partly because exchange plan underwriting in a state with a Basic Health Plan is much different from underwriting coverage in a state without a Basic Health Plan program.