Centene expects rising Medicaid expenses to hurt its third-quarter earnings.
In documents filed with the Securities and Exchange Commission Sept. 10, the insurer said it expects its third quarter earnings per share to decline by 20 to 30 cents. Those earnings will shift to the fourth quarter, Centene said.
The company is maintaining its full year earnings guidance of at least $6.80 per share.
At an investor presentation on Sept. 4, Centene CFO Drew Asher said the company expected medical expenses in Medicaid to be higher in the third quarter than in the second quarter.
Centene's medical loss ratio in the second quarter of 2024 was 87.6%.
Mr. Asher said medicaid redeterminations were the main driver of increasing costs. The insurer lowered its Medicaid membership guidance for 2024 from 13.6 million to 13 million.
In 2023, states began disenrolling Medicaid beneficiaries from the program for the first time since continuous coverage requirements took effect at the beginning of the COVID-19 pandemic. As of Aug. 23, 25.1 million people have been disenrolled from Medicaid through the redeterminations process, according to KFF.
Centene and other insurers have said Medicaid members remaining in the program tend to have more medical needs than those disenrolled, driving up medical costs.
Mr. Asher also told investors around 30% of Centene members disenrolled eventually reenroll in Medicaid, but the gap of time before they rejoin Medicaid is widening.
"That's a time period where we're not getting premiums. The member is finding their way back into the Medicaid healthcare system, typically, because they have an event they want covered or a script they need to fill," he said.