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Obamacare Insurer Centene Expects $4 Billion Pandemic Boost In Revenue

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Health insurer Centene expects the rise in unemployment amid the spread of the coronavirus strain COVID-19 to boost Medicaid and Obamacare enrollment in the coming months and increase revenue by $4 billion.

Centene, which is the nation’s biggest provider of individual coverage under the Affordable Care Act and a large provider of Medicaid health benefits, said Tuesday it has already begun to see a boost in people signing up for coverage this month. Centene didn’t provide a specific enrollment projection, but increased its total revenue guidance by $6 billion, putting its 2020 total revenue projection at between $110 billion to $112 billion.

Centene, which previously projected 2020 revenue at $104.8 billion to $105.6 billion said it expects “pass through and non-economic environment revenue growth” of $2 billion plus $4 billion in “current economic environment revenue growth.” This growth will largely come from people who are losing their jobs and health coverage and will turn to either individual coverage known as Obamacare under the ACA or Medicaid benefits, which Centene administers in partnership with many states.

"We all recognize the unprecedented nature of the COVID-19 pandemic and the significant impact from both a health and economic perspective,” Centene chairman and CEO Michael Neidorff said Tuesday.

Centene, which bought WellCare Health Plans earlier this year, is now a national health plan providing benefits to 1 in 15 Americans and the largest provider of individual coverage under the ACA. Centene reported nearly 2.2 million enrollees in its individual plans as of the end of the first quarter compared to 1.98 million in the year-ago period.

Thanks to the addition of WellCare, Centene said revenues in the first quarter jumped 41% to $26 billion. Centene reported $46 million in first quarter profits.

Looking ahead, Centene’s medical expenses are also expected to rise. In a call Tuesday morning with analysts to discuss its first quarter earnings and its revised 2020 outlook, Neidorff said those could be “significantly greater in third and fourth quarter” particularly from health plan members with chronic conditions and those health plan enrollees who may now be delaying treatment.

This is not a business as usual environment and economic recovery will be choppy,” Neidorff said. “In this challenging landscape that we all face, Centene has the team, systems, expertise and financial strength to rise to the occasion.”

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