Centene logged $283 million in profit during Q4 2024, marking a sizable increase from the insurer's Q4 2023 profits of $45 million.
Revenue also increased slightly year-over-year (YOY), from $39.5 billion to $40.8 billion.
For the year, Centene pulled in $3.3 billion in profit – up from $2.7 billion in 2023 – and $163.1 billion in revenue, up from $154 billion the year prior.
Centene CEO Sarah London said there were some headwinds in the quarter, but that the company showed "significant operational improvements" and delivered on its financial commitments. AI is playing a role in automation and modernization.
"As an enterprise, Centene is stepping into 2025 with a clear strategy, compelling embedded earnings power, and positive momentum within each of our lines of business," London said during the call. "We have delivered significant operational improvements and see exciting opportunity ahead as we continue to modernize our platform, automate our administrative processes through the deployment of AI, and leverage our unparalleled data to create insights that make our business better, improve the quality of healthcare for our members, and transform how the healthcare system serves millions of Americans."
WHAT'S THE IMPACT?
Centene gained members during the course of the year, ending 2024 with 28.6 million members – about 1.1 million more than at the end of 2023. Medicaid redeterminations resulted in a dip in enrollment, but marketplace coverage sign-ups increased YOY, from 3.9 million to 4.4 million.
The health benefits ratio (HBR) of 89.6% for Q4 is a slight increase from the 89.5% posted in 2023, driven mainly by higher acuity in Medicaid, and partially offset by the decrease in Medicare Advantage premium deficiency reserve-related expenses
For the full year, the HBR was 88.3%, also an increase over the 87.7% full-year HBR in 2023. Medicaid redeterminations drove much of the increase, as did Medicare Star Rating impacts, according to Centene. The increases were partially offset by Marketplace membership growth and improved margin.
Because of its fourth-quarter performance, the company is adjusting its guidance. It is now expecting to bring in between $158 and $160 billion – an increase of about $4 billion. Total revenue guidance sits at between $166.5 billion and $169.5 billion, with projected earnings per share of at least $7.25.
THE LARGER TREND
Centene will exit the Medicare Advantage market in at least six states in 2025, according to an August 5 research brief by Stephens, an independent financial services firm and privately owned investment bank.
The six states are Alabama, Massachusetts, New Hampshire, New Mexico, Rhode Island and Vermont. These states account for about 3% of Centene's Medicare Advantage membership.
Centene CEO Sarah London said in December that the company has improved its core operations over the past three years and has invested in the customer and provider experience.
For 2025, the company predicted an effective tax rate of 21.5% to 22.5%, an adjusted effective tax rate of 22% to 23%, and diluted shares outstanding of 491 million to 494 million.
ON THE RECORD
London said, "We enter 2025 with a strong, diversified platform and exciting opportunity to deliver value in each of our core businesses and to transform the health of communities we serve, one person at a time."
Jeff Lagasse is editor of Healthcare Finance News.
Email: jlagasse@himss.org
Healthcare Finance News is a HIMSS Media publication.