On a Feb. 4 earnings call, Centene CEO Sarah London told investors the company is anticipating a more stable period for Medicaid enrollment in 2025.
“As we move through 2025, we are looking forward to turning the page on the redetermination era, returning to overall Medicaid stability and working closely with our state partners on innovations to deliver not only healthcare, but also better health within our communities,” Ms. London said.
In 2023 and 2024, states redetermined the eligibility of Medicaid beneficiaries for the first time since 2020. States were barred from removing any beneficiaries from the program during the COVID-19 public health emergency, regardless of their eligibility. Nearly every state has completed the process.
Here are five things to know about Centene’s Medicaid strategy:
- At the end of 2024, Centene had 13 million Medicaid members, down from 14.5 million at year-end 2023. CFO Drew Asher said the company aims to end the year with between 12.9 million and 13 million members, and expects to maintain that level throughout 2025.
- Several insurers have reported rising Medicaid costs, as members who remain enrolled in the program tended to have higher-acuity needs than those disenrolled. State payment rates have yet to catch up to rising costs, executives say.
Ms. London said the company is confident it will “demand rates that will support a return to target Medicaid margins” in 2025. Centene expects state rates to increase by 3% to 4% from 2024, Ms. London said.
- Centene’s Medicaid medical loss ratio in 2024 was 92.5%, up from 90% in 2023. CFO Drew Asher told investors Medicaid cost trends are stable, aside from some rising costs in behavioral health and home healthcare.
- Though the company lost more than 1.5 million Medicaid members, its ACA business grew by 12% from 2023 to 2024. The company expects to peak at around 5 million individual members in early 2025, Ms. London told investors.
- The company is challenging Medicaid contract decisions in some states where it lost awards. Ms. London told investors that challenges in Texas will play out in the courts and legislature through 2025. The company is also challenging Georgia’s Medicaid contract awards, but does not expect to receive an update for several months.
