Who is Centene, you may ask? This brazen health insurer shot up seemingly out of nowhere (well, Wisconsin) to become a significant player in the market, with annual revenues (and vertical integration activity) competitive with those of mega-peers like UnitedHealthcare and Cigna. Is Centene a true contender—or is it punching above its weight?
Modern Healthcare shared a list of five key data points from Centene’s first quarter report, highlighting the lucrative twists and regrettable turns of the company’s start to the year. The list begins with Centene’s Medicaid membership growing by 16%. The insurer can boast 13.8 million Medicaid members at of the end of Q1, which is up 16.4% from the same time last year. Centene also expanded its government health insurance marketplace business into hundreds of counties across 13 states.
So, they’re off to a good start. And we’ll be honest: We’ve sort of been rooting for Centene. Any fresh competition against the relentlessly expanding insurance conglomerates seems like a good idea. And there are signs that Centene is, in fact, legit competition. It reported Q1 2021 revenue of $29.9 billion, up 15.2% from $26 billion during the same time last year. Net earnings in the quarter came in at $699 million, up from the $46 million reported in 2020. That’s a big jump.
On the other hand, Centene saw significant dips in exchange and Medicare membership over the last year. And we can’t forget the awkward issue of revenue lost due to canceled Medicaid pharmacy benefit manager (PBM) service contracts in Ohio, Mississippi and, most recently, California. When multiple states accuse you of double-billing and/or fraud, it’s got to take the wind out of your sails. And yet, well—see the preceding paragraph.
We admit, we still have hopes for Centene as a relatively new player who has a shot at beating the established giants at their own game by playing fair with customers. We’re all for setting precedents for things like reliable coverage and transparent business practices. But Centene’s going to have to step their game up if they want to steer the health insurance industry in a more positive direction. Do they have what it takes? We’ll see.
