Centene Corporation Reports Second Quarter 2020 Results
In summary, the 2020 second quarter results were as follows:
Total revenues (in millions) |
$ |
27,712 |
|
Health benefits ratio |
82.1 |
% |
|
SG&A expense ratio |
8.8 |
% |
|
Adjusted SG&A expense ratio (1) |
8.5 |
% |
|
GAAP diluted EPS |
$ |
2.05 |
|
Adjusted Diluted EPS (1) |
$ |
2.40 |
|
Total cash flow provided by operations (in millions) |
$ |
3,714 |
|
(1) A full reconciliation of the Adjusted SG&A expense ratio and Adjusted Diluted EPS are shown on pages six and seven of this release. |
The 2020 second quarter results benefited from lower medical utilization as a result of the COVID-19 pandemic.
"I am pleased with our solid second quarter performance, which came in line with our expectations. Our performance underscores the impact of shelter in place policies on our diversified platform in addition to our team's solid execution in what continues to be a challenging operating landscape," said
"Looking ahead, while we expect the national economic trajectory to remain choppy as we move through the second half of the year, we believe that the return of utilization by our members seeking treatments will be regionally driven. We continue to provide the highest quality of care to our members during this critical time and are well-positioned to respond quickly to evolving dynamics as we execute on our growth strategy. We are further supported by the strength of our balance sheet and solid financial position."
Second Quarter Highlights
June 30, 2020 managed care membership of 24.6 million, an increase of 9.6 million members, or 64%, overJune 30, 2019 .- Total revenues of
$27.7 billion for the second quarter of 2020, representing 51% growth compared to the second quarter of 2019. - Health benefits ratio (HBR) of 82.1% for the second quarter of 2020, compared to 86.7% in the second quarter of 2019.
- Selling, general and administrative (SG&A) expense ratio of 8.8% for the second quarter of 2020, compared to 9.1% for the second quarter of 2019.
- Adjusted SG&A expense ratio of 8.5% for the second quarter of 2020, compared to 9.0% for the second quarter of 2019.
- Diluted EPS for the second quarter of 2020 of
$2.05 , compared to$1.18 for the second quarter of 2019. - Adjusted Diluted EPS for the second quarter of 2020 of
$2.40 , compared to$1.34 for the second quarter of 2019. - Operating cash flow of
$3.7 billion for the second quarter 2020, representing 3.1x net earnings.
Other Events
- In
July 2020 ,Centene announced that it will establish anEast Coast headquarters inCharlotte, North Carolina . The Company expects to begin construction on the new campus in August and plans to create 3,200 new jobs, with eventual accommodations for up to 6,000 employees, and invest$1 billion in theCharlotte community over time. - In
July 2020 ,Centene's subsidiary,Meridian Health Plan of Illinois, Inc. (Meridian), began serving Medicaid members inCook County, Illinois as a result of a Member Transfer Agreement under which Meridian was assigned 100% ofNextLevel Health Partners, Inc.'s approximately 54,000 members who access benefits from theIllinois Department of Healthcare and Family Services' HealthChoice Illinois Program . - In
July 2020 ,Centene's subsidiary, Centurion, commenced a two-year contract with theKansas Department of Administration to provide healthcare services in theDepartment of Corrections' facilities. - In
June 2020 ,Centene's subsidiary, WellCare ofKentucky , was selected by the state ofKentucky to continue serving the Commonwealth's Medicaid managed care program statewide. The new four-year contract is anticipated to begin onJanuary 1, 2021 running throughDecember 31, 2024 with the option for six, two-year renewal extensions.
Accreditations & Awards
- In
July 2020 , for the third consecutive year,Centene was recognized with a 100 percent score on the Disability Equality Index (DEI) as one of the Best Places to Work for People with Disabilities. - In
July 2020 , Forbes announcedCentene's position of #14 on its Corporate Responders list, which assesses how well the 100 largest publicly-held companies in theU.S. have responded to COVID-19. - In
June 2020 ,Centene's subsidiary, Envolve Dental, earned Accreditation from theNational Committee for Quality Assurance (NCQA). - In
May 2020 , FORTUNE announcedCentene's position of #42 in its annual ranking of America's largest companies based on 2019 revenue. - In
April 2020 , severalCentene health plans earned Accreditation fromNCQA , including Ambetter fromArkansas Health and Wellness, Sunflower Health Plan andQualChoice Health Insurance .
COVID-19 Pandemic
Beginning in
Membership
The following table sets forth our membership by line of business:
|
|||||
2020 |
2019 |
||||
Medicaid: |
|||||
TANF, CHIP & |
10,894,200 |
7,388,700 |
|||
ABD & LTSS |
1,496,000 |
997,900 |
|||
|
173,900 |
68,800 |
|||
Total Medicaid |
12,564,100 |
8,455,400 |
|||
Medicare PDP |
4,443,100 |
— |
|||
Commercial |
2,763,300 |
2,449,400 |
|||
Medicare (1) |
996,100 |
398,500 |
|||
International |
600,400 |
463,100 |
|||
Correctional |
166,000 |
153,900 |
|||
Total at-risk membership |
21,533,000 |
11,920,300 |
|||
TRICARE eligibles |
2,864,700 |
2,855,800 |
|||
Non-risk membership |
223,300 |
228,100 |
|||
Total |
24,621,000 |
15,004,200 |
|||
(1) Membership includes Medicare Advantage, Medicare Supplement, Special Needs Plans, and Medicare-Medicaid Plans (MMP). |
The following table sets forth additional membership statistics, which are included in the membership information above:
|
|||||
2020 |
2019 |
||||
Dual-eligible (2) |
969,700 |
600,800 |
|||
|
2,245,600 |
1,910,700 |
|||
Medicaid Expansion |
1,931,600 |
1,290,200 |
|||
(2) Membership includes dual-eligible ABD & LTSS and dual-eligible Medicare. |
Revenues
The following table sets forth supplemental revenue information ($ in millions):
Three Months Ended |
||||||||||
2020 |
2019 |
% Change |
||||||||
Medicaid |
$ |
18,129 |
$ |
12,119 |
50 |
% |
||||
Commercial |
4,136 |
3,872 |
7 |
% |
||||||
Medicare (3) |
3,538 |
1,465 |
142 |
% |
||||||
Medicare PDP |
674 |
— |
n.m. |
|||||||
Other |
1,235 |
900 |
37 |
% |
||||||
Total Revenues |
$ |
27,712 |
$ |
18,356 |
51 |
% |
||||
(3) Medicare includes Medicare Advantage, Medicare Supplement, Special Needs Plans, and MMP. |
||||||||||
n.m.: not meaningful |
Statement of Operations: Three Months Ended
- For the second quarter of 2020, total revenues increased 51% to
$27.7 billion from$18.4 billion in the comparable period in 2019. The increase over the prior year was due to the acquisition of WellCare, growth in theHealth Insurance Marketplace business, expansions, new programs and growth in many of our states, particularlyIowa andPennsylvania , and the reinstatement of the health insurer fee in 2020, partially offset by the divestiture of ourIllinois health plan. - HBR of 82.1% for the second quarter of 2020 represents a decrease from 86.7% in the comparable period in 2019. The substantial decrease was attributable to lower medical utilization due to the COVID-19 pandemic, partially offset by the
Health Insurance Marketplace business, where margins continue to normalize. - The SG&A expense ratio was 8.8% for the second quarter of 2020, compared to 9.1% in the second quarter of 2019. The decrease to the SG&A expense ratio was driven by the addition of the WellCare business, which operates at a lower SG&A ratio, and the leveraging of expenses over higher revenues. The decrease was partially offset by higher acquisition related expenses due to the recent closing of the WellCare acquisition and additional support provided to our
Health Insurance Marketplace members through the extension of grace periods for member premiums for those impacted by the COVID-19 pandemic. - The Adjusted SG&A expense ratio was 8.5% for the second quarter of 2020, compared to 9.0% in the second quarter of 2019. The Adjusted SG&A expense ratio benefited from the addition of the WellCare business, which operates at a lower SG&A ratio, and the leveraging of expenses over higher revenues. The decrease was partially offset by additional support provided to our
Health Insurance Marketplace members through the extension of grace periods for member premiums for those impacted by the COVID-19 pandemic. - The effective tax rate was 38.2% for the second quarter of 2020, compared to 25.7% in the second quarter of 2019. The increase in the effective tax rate was driven by the reinstatement of the health insurer fee in 2020. For the second quarter of 2020, our effective tax rate on adjusted earnings was 36.1%.
Balance Sheet
At
A reconciliation of the Company's change in days in claims payable from the immediately preceding quarter-end is presented below:
Days in claims payable, |
47 |
||
Impact of the COVID-19 Pandemic |
4 |
||
Days in claims payable, |
51 |
||
(1) A pro-forma adjustment has been made to medical costs to include a full quarter of WellCare medical costs. Using actual medical costs, days in claims payable was 51. |
The Company's days in claims payable was 51 days, an increase of four days over the pro-forma first quarter of 2020. The increase in days in claims payable is due to lower medical expense in April and May as a result of shelter-in-place orders resulting from COVID-19. A significant portion of the quarter end Medical Claims Liability includes June dates of service where claims were near normalized levels.
Outlook
The Company's annual guidance for 2020 is as follows:
Full Year 2020 |
|||||||||
Low |
High |
||||||||
Total revenues (in billions) |
$ |
109.0 |
$ |
111.4 |
|||||
GAAP diluted EPS |
$ |
3.04 |
$ |
3.18 |
|||||
Adjusted Diluted EPS (1) |
$ |
4.76 |
$ |
4.96 |
|||||
Diluted shares outstanding (in millions) |
577.9 |
580.9 |
|||||||
(1) |
Adjusted Diluted EPS excludes estimated amortization of acquired intangible assets of |
Conference Call
As previously announced, the Company will host a conference call
Investors and other interested parties are invited to listen to the conference call by dialing 1-877-883-0383 in the
A webcast replay will be available for on-demand listening shortly after the completion of the call for the next twelve months or until
Non-GAAP Financial Presentation
The Company is providing certain non-GAAP financial measures in this release as the Company believes that these figures are helpful in allowing investors to more accurately assess the ongoing nature of the Company's operations and measure the Company's performance more consistently across periods. The Company uses the presented non-GAAP financial measures internally to allow management to focus on period-to-period changes in the Company's core business operations. Therefore, the Company believes that this information is meaningful in addition to the information contained in the GAAP presentation of financial information. The presentation of this additional non-GAAP financial information is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP.
Specifically, the Company believes the presentation of non-GAAP financial information that excludes amortization of acquired intangible assets and acquisition related expenses, as well as other items, allows investors to develop a more meaningful understanding of the Company's performance over time. The tables below provide reconciliations of non-GAAP items ($ in millions, except per share data):
Three Months Ended |
Six Months Ended |
||||||||||||||
2020 |
2019 |
2020 |
2019 |
||||||||||||
GAAP net earnings attributable to |
$ |
1,206 |
$ |
495 |
$ |
1,252 |
$ |
1,017 |
|||||||
Amortization of acquired intangible assets |
197 |
64 |
363 |
129 |
|||||||||||
Acquisition related expenses |
71 |
23 |
384 |
41 |
|||||||||||
Other adjustments (1) |
(11) |
— |
12 |
— |
|||||||||||
Income tax effects of adjustments (2) |
(53) |
(21) |
(125) |
(41) |
|||||||||||
Adjusted net earnings |
$ |
1,410 |
$ |
561 |
$ |
1,886 |
$ |
1,146 |
(1) |
Other adjustments for the three months ended |
(2) |
The income tax effects of adjustments are based on the effective income tax rates applicable to each adjustment. |
Three Months Ended |
Six Months Ended |
Annual Guidance |
|||||||||||||||
2020 |
2019 |
2020 |
2019 |
||||||||||||||
GAAP diluted EPS attributable to |
$ |
2.05 |
$ |
1.18 |
$ |
2.20 |
$ |
2.42 |
|
||||||||
Amortization of acquired intangible assets (3) |
0.25 |
0.12 |
0.48 |
0.24 |
|
||||||||||||
Acquisition related expenses (4) |
0.10 |
0.04 |
0.58 |
0.07 |
|
||||||||||||
Other adjustments (5) |
— |
— |
0.05 |
— |
|
||||||||||||
Adjusted Diluted EPS |
$ |
2.40 |
$ |
1.34 |
$ |
3.31 |
$ |
2.73 |
|
(3) |
The amortization of acquired intangible assets per diluted share presented above is net of an income tax benefit of |
|
(4) |
The acquisition related expenses per diluted share presented above are net of an income tax benefit of |
|
(5) |
Other adjustments include the following items: |
|
(1) |
gain related to the divestiture of certain products of the Company's |
|
(2) |
non-cash impairment of our third party-care management software system of |
|
(3) |
debt extinguishment costs of |
Three Months Ended |
Six Months Ended |
||||||||||||||
2020 |
2019 |
2020 |
2019 |
||||||||||||
GAAP SG&A expenses |
$ |
2,255 |
$ |
1,574 |
$ |
4,639 |
$ |
3,183 |
|||||||
Acquisition related expenses |
70 |
21 |
365 |
38 |
|||||||||||
Adjusted SG&A expenses |
$ |
2,185 |
$ |
1,553 |
$ |
4,274 |
$ |
3,145 |
To provide clarity on the way management defines certain key metrics and ratios, the Company is providing a description of how the metric or ratio is calculated as follows:
- Health Benefits Ratio (HBR) (GAAP) = Medical costs divided by premium revenues.
- SG&A Expense Ratio (GAAP) = Selling, general and administrative expenses divided by premium and service revenues.
- Adjusted SG&A Expenses (non-GAAP) = Selling, general and administrative expenses, less acquisition related expenses.
- Adjusted SG&A Expense Ratio (non-GAAP) = Adjusted selling, general and administrative expenses divided by premium and service revenues.
- Adjusted Net Earnings (non-GAAP) = Net earnings less amortization of acquired intangible assets, less acquisition related expenses, as well as adjustments for other items, net of the income tax effect of the adjustments.
- Adjusted Diluted EPS (non-GAAP) = Adjusted net earnings divided by weighted average common shares outstanding on a fully diluted basis.
- Debt to Capitalization Ratio (GAAP) = Total debt, divided by total debt plus total stockholder's equity.
- Debt to Capitalization Ratio Excluding Non-Recourse Debt (non-GAAP) = Total debt less non-recourse debt, divided by total debt less non-recourse debt plus total stockholder's equity.
- Average Medical Claims Expense (GAAP) = Medical costs for the period, divided by number of days in such period. Average Medical Claims Expense is most often calculated for the quarterly reporting period.
- Days in Claims Payable (GAAP) = Medical claims liabilities, divided by average medical claims expense. Days in Claims Payable is most often calculated for the quarterly reporting period.
In addition, the following terms referenced in this press release and other Company filings are defined as follows:
- State Directed Payments: Payments directed by a state that have minimal risk, but are administered as a premium adjustment. These payments are recorded as premium revenue and medical costs at close to a 100% HBR. The Company has little visibility to the timing of these payments until they are paid by a state.
- Pass Through Payments: Non-risk supplemental payments from a state that the Company is required to pass through to designated contracted providers. These payments are recorded as premium tax revenue and premium tax expense.
About
Forward-Looking Statements
All statements, other than statements of current or historical fact, contained in this press release are forward-looking statements. Without limiting the foregoing, forward-looking statements often use words such as "believe," "anticipate," "plan," "expect," "estimate," "intend," "seek," "target," "goal," "may," "will," "would," "could," "should," "can," "continue" and other similar words or expressions (and the negative thereof).
[Tables Follow]
CENTENE CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In millions, except shares in thousands and per share data in dollars) |
|||||||
|
|
||||||
ASSETS |
|||||||
Current assets: |
|||||||
Cash and cash equivalents |
$ |
12,798 |
$ |
12,123 |
|||
Premium and trade receivables |
10,339 |
6,247 |
|||||
Short-term investments |
1,558 |
863 |
|||||
Other current assets |
2,127 |
1,090 |
|||||
Total current assets |
26,822 |
20,323 |
|||||
Long-term investments |
10,231 |
7,717 |
|||||
Restricted deposits |
1,050 |
658 |
|||||
Property, software and equipment, net |
2,544 |
2,121 |
|||||
|
17,434 |
6,863 |
|||||
Intangible assets, net |
8,702 |
2,063 |
|||||
Other long-term assets |
1,564 |
1,249 |
|||||
Total assets |
$ |
68,347 |
$ |
40,994 |
|||
LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND STOCKHOLDERS' EQUITY |
|||||||
Current liabilities: |
|||||||
Medical claims liability |
$ |
11,418 |
$ |
7,473 |
|||
Accounts payable and accrued expenses |
8,704 |
4,164 |
|||||
Return of premium payable |
1,242 |
824 |
|||||
Unearned revenue |
448 |
383 |
|||||
Current portion of long-term debt |
106 |
88 |
|||||
Total current liabilities |
21,918 |
12,932 |
|||||
Long-term debt |
16,708 |
13,638 |
|||||
Other long-term liabilities |
4,516 |
1,732 |
|||||
Total liabilities |
43,142 |
28,302 |
|||||
Commitments and contingencies |
|||||||
Redeemable noncontrolling interests |
33 |
33 |
|||||
Stockholders' equity: |
|||||||
Preferred stock, |
— |
— |
|||||
Common stock, |
— |
— |
|||||
Additional paid-in capital |
19,333 |
7,647 |
|||||
Accumulated other comprehensive earnings |
245 |
134 |
|||||
Retained earnings |
6,236 |
4,984 |
|||||
|
(758) |
(214) |
|||||
Total |
25,056 |
12,551 |
|||||
Noncontrolling interest |
116 |
108 |
|||||
Total stockholders' equity |
25,172 |
12,659 |
|||||
Total liabilities, redeemable noncontrolling interests and stockholders' equity |
$ |
68,347 |
$ |
40,994 |
CENTENE CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (In millions, except shares in thousands and per share data in dollars) (Unaudited) |
|||||||||||||||
Three Months Ended |
Six Months Ended |
||||||||||||||
2020 |
2019 |
2020 |
2019 |
||||||||||||
Revenues: |
|||||||||||||||
Premium |
$ |
24,745 |
$ |
16,554 |
$ |
47,959 |
$ |
32,757 |
|||||||
Service |
979 |
745 |
1,937 |
1,380 |
|||||||||||
Premium and service revenues |
25,724 |
17,299 |
49,896 |
34,137 |
|||||||||||
Premium tax and health insurer fee |
1,988 |
1,057 |
3,841 |
2,663 |
|||||||||||
Total revenues |
27,712 |
18,356 |
53,737 |
36,800 |
|||||||||||
Expenses: |
|||||||||||||||
Medical costs |
20,307 |
14,354 |
40,727 |
28,236 |
|||||||||||
Cost of services |
833 |
615 |
1,658 |
1,159 |
|||||||||||
Selling, general and administrative expenses |
2,255 |
1,574 |
4,639 |
3,183 |
|||||||||||
Amortization of acquired intangible assets |
197 |
64 |
363 |
129 |
|||||||||||
Premium tax expense |
1,723 |
1,106 |
3,348 |
2,765 |
|||||||||||
Health insurer fee expense |
379 |
— |
724 |
— |
|||||||||||
Impairment |
— |
— |
72 |
— |
|||||||||||
Total operating expenses |
25,694 |
17,713 |
51,531 |
35,472 |
|||||||||||
Earnings from operations |
2,018 |
643 |
2,206 |
1,328 |
|||||||||||
Other income (expense): |
|||||||||||||||
Investment and other income |
113 |
120 |
280 |
219 |
|||||||||||
Debt extinguishment costs |
— |
— |
(44) |
— |
|||||||||||
Interest expense |
(187) |
(101) |
(367) |
(200) |
|||||||||||
Earnings from operations, before income tax expense |
1,944 |
662 |
2,075 |
1,347 |
|||||||||||
Income tax expense |
742 |
170 |
827 |
336 |
|||||||||||
Net earnings |
1,202 |
492 |
1,248 |
1,011 |
|||||||||||
Loss attributable to noncontrolling interests |
4 |
3 |
4 |
6 |
|||||||||||
Net earnings attributable to |
$ |
1,206 |
$ |
495 |
$ |
1,252 |
$ |
1,017 |
|||||||
Net earnings per common share attributable to |
|||||||||||||||
Basic earnings per common share |
$ |
2.08 |
$ |
1.20 |
$ |
2.23 |
$ |
2.46 |
|||||||
Diluted earnings per common share |
$ |
2.05 |
$ |
1.18 |
$ |
2.20 |
$ |
2.42 |
|||||||
Weighted average number of common shares outstanding: |
|||||||||||||||
Basic |
579,189 |
413,370 |
561,623 |
413,144 |
|||||||||||
Diluted |
587,498 |
419,671 |
569,559 |
419,707 |
CENTENE CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (In millions, unaudited) |
|||||||
Six Months Ended |
|||||||
2020 |
2019 |
||||||
Cash flows from operating activities: |
|||||||
Net earnings |
$ |
1,248 |
$ |
1,011 |
|||
Adjustments to reconcile net earnings to net cash provided by operating activities |
|||||||
Depreciation and amortization |
618 |
313 |
|||||
Stock compensation expense |
164 |
72 |
|||||
Impairment |
72 |
— |
|||||
Loss on debt extinguishment |
44 |
— |
|||||
Deferred income taxes |
17 |
(10) |
|||||
Gain on divestiture |
(104) |
— |
|||||
Other adjustments, net |
2 |
— |
|||||
Changes in assets and liabilities |
|||||||
Premium and trade receivables |
(1,159) |
234 |
|||||
Other assets |
202 |
(47) |
|||||
Medical claims liabilities |
146 |
558 |
|||||
Unearned revenue |
(127) |
(138) |
|||||
Accounts payable and accrued expenses |
1,309 |
(616) |
|||||
Other long-term liabilities |
1,028 |
869 |
|||||
Other operating activities, net |
14 |
(13) |
|||||
Net cash provided by operating activities |
3,474 |
2,233 |
|||||
Cash flows from investing activities: |
|||||||
Capital expenditures |
(412) |
(336) |
|||||
Purchases of investments |
(1,849) |
(1,280) |
|||||
Sales and maturities of investments |
1,768 |
719 |
|||||
Acquisitions, net of cash acquired |
(3,000) |
(32) |
|||||
Divestiture proceeds, net of divested cash |
466 |
— |
|||||
Other investing activities, net |
(5) |
— |
|||||
Net cash used in investing activities |
(3,032) |
(929) |
|||||
Cash flows from financing activities: |
|||||||
Proceeds from long-term debt |
2,630 |
5,617 |
|||||
Payments of long-term debt |
(1,598) |
(5,353) |
|||||
Common stock repurchases |
(561) |
(37) |
|||||
Payments for debt extinguishment |
(21) |
— |
|||||
Debt issuance costs |
(93) |
— |
|||||
Other financing activities, net |
22 |
9 |
|||||
Net cash provided by financing activities |
379 |
236 |
|||||
Effect of exchange rate changes on cash, cash equivalents, and restricted cash |
3 |
2 |
|||||
Net increase in cash, cash equivalents and restricted cash and cash equivalents |
824 |
1,542 |
|||||
Cash, cash equivalents, and restricted cash and cash equivalents, beginning of period |
12,131 |
5,350 |
|||||
Cash, cash equivalents, and restricted cash and cash equivalents, end of period |
$ |
12,955 |
$ |
6,892 |
|||
Supplemental disclosures of cash flow information: |
|||||||
Interest paid |
$ |
360 |
$ |
132 |
|||
Income taxes paid |
$ |
75 |
$ |
381 |
|||
Equity issued in connection with acquisitions |
$ |
11,526 |
$ |
— |
|||
The following table provides a reconciliation of cash, cash equivalents, and restricted cash and cash equivalents reported within the Consolidated Balance Sheets to the totals above: |
|||||||
|
|||||||
2020 |
2019 |
||||||
Cash and cash equivalents |
$ |
12,798 |
$ |
6,875 |
|||
Restricted cash and cash equivalents, included in restricted deposits |
157 |
17 |
|||||
Total cash, cash equivalents, and restricted cash and cash equivalents |
$ |
12,955 |
$ |
6,892 |
SUPPLEMENTAL FINANCIAL DATA |
|||||||||||||||||||
Q2 |
Q1 |
Q4 |
Q3 |
Q2 |
|||||||||||||||
2020 |
2020 |
2019 |
2019 |
2019 |
|||||||||||||||
Medicaid: |
|||||||||||||||||||
TANF, CHIP & |
10,894,200 |
10,259,700 |
7,528,700 |
7,623,400 |
7,388,700 |
||||||||||||||
ABD & LTSS |
1,496,000 |
1,410,100 |
1,043,500 |
1,045,700 |
997,900 |
||||||||||||||
|
173,900 |
158,000 |
66,500 |
73,300 |
68,800 |
||||||||||||||
Total Medicaid |
12,564,100 |
11,827,800 |
8,638,700 |
8,742,400 |
8,455,400 |
||||||||||||||
Medicare PDP |
4,443,100 |
4,416,500 |
— |
— |
— |
||||||||||||||
Commercial |
2,763,300 |
2,728,200 |
2,331,100 |
2,388,500 |
2,449,400 |
||||||||||||||
Medicare (1) |
996,100 |
976,700 |
404,500 |
404,500 |
398,500 |
||||||||||||||
International |
600,400 |
599,900 |
599,800 |
462,400 |
463,100 |
||||||||||||||
Correctional |
166,000 |
172,000 |
180,000 |
187,200 |
153,900 |
||||||||||||||
Total at-risk membership |
21,533,000 |
20,721,100 |
12,154,100 |
12,185,000 |
11,920,300 |
||||||||||||||
TRICARE eligibles |
2,864,700 |
2,864,800 |
2,860,700 |
2,860,700 |
2,855,800 |
||||||||||||||
Non-risk membership |
223,300 |
216,200 |
227,000 |
227,800 |
228,100 |
||||||||||||||
Total |
24,621,000 |
23,802,100 |
15,241,800 |
15,273,500 |
15,004,200 |
||||||||||||||
(1) Membership includes Medicare Advantage, Medicare Supplement, Special Needs Plans, and MMP.
|
|||||||||||||||||||
NUMBER OF EMPLOYEES |
71,800 |
69,700 |
56,600 |
53,600 |
52,000 |
||||||||||||||
DAYS IN CLAIMS PAYABLE (2) |
51 |
51 |
45 |
48 |
47 |
||||||||||||||
(2) Days in Claims Payable is a calculation of Medical Claims Liabilities at the end of the period divided by average claims expense per calendar day for such period. On a pro-forma basis, DCP for Q1 2020 was 47, reflecting adjusted medical costs to include a full quarter of WellCare operations. |
|||||||||||||||||||
CASH, INVESTMENTS AND RESTRICTED DEPOSITS (in millions) |
|||||||||||||||||||
Regulated |
$ |
23,655 |
$ |
19,358 |
$ |
14,204 |
$ |
14,734 |
$ |
15,101 |
|||||||||
Unregulated |
1,982 |
2,871 |
7,157 |
855 |
801 |
||||||||||||||
Total |
$ |
25,637 |
$ |
22,229 |
$ |
21,361 |
$ |
15,589 |
$ |
15,902 |
|||||||||
DEBT TO CAPITALIZATION |
40.0 |
% |
42.2 |
% |
52.0 |
% |
36.2 |
% |
36.8 |
% |
|||||||||
DEBT TO CAPITALIZATION EXCLUDING NON-RECOURSE DEBT (3) |
39.7 |
% |
41.9 |
% |
51.7 |
% |
35.6 |
% |
36.3 |
% |
|||||||||
(3) The non-recourse debt represents the Company's mortgage note payable ( |
OPERATING RATIOS
Three Months Ended |
Six Months Ended |
||||||||||
2020 |
2019 |
2020 |
2019 |
||||||||
HBR |
82.1 |
% |
86.7 |
% |
84.9 |
% |
86.2 |
% |
|||
SG&A expense ratio |
8.8 |
% |
9.1 |
% |
9.3 |
% |
9.3 |
% |
|||
Adjusted SG&A expense ratio |
8.5 |
% |
9.0 |
% |
8.6 |
% |
9.2 |
% |
MEDICAL CLAIMS LIABILITY
The changes in medical claims liability are summarized as follows (in millions):
Balance, |
$ |
7,447 |
||
Less: reinsurance recoverable |
19 |
|||
Balance, |
7,428 |
|||
Acquisitions and divestitures |
3,744 |
|||
Incurred related to: |
||||
Current period |
71,919 |
|||
Prior period |
(566) |
|||
Total incurred |
71,353 |
|||
Paid related to: |
||||
Current period |
64,761 |
|||
Prior period |
6,363 |
|||
Total paid |
71,124 |
|||
Balance, |
11,401 |
|||
Plus: reinsurance recoverable |
17 |
|||
Balance, |
$ |
11,418 |
||
The amount of the "Incurred related to: Prior period" above represents favorable development and includes the effects of reserving under moderately adverse conditions, new markets where we use a conservative approach in setting reserves during the initial periods of operations, receipts from other third party payors related to coordination of benefits and lower medical utilization and cost trends for dates of service
Our Response to COVID-19
Demonstrating our commitment to our members and the communities we serve, employees, and providers and government partners.
Members and Communities |
Waiving COVID-19 related prior authorizations and member cost sharing |
Delivering 50,000 gift cards, with |
Donating 1 million meals a month for 12 months to feed our neighbors in communities all over the country. |
Providing grants to Area Agencies on Aging to enable grocery and |
Matching funds in partnership with workforce development boards and other safety net organizations |
Investment in new technology and supplies to improve access to quality healthcare for the incarcerated population, including expanding PPE supplies in prisons and expanding the partnership with the |
Creation of |
Waiving all cost sharing for in-network primary care, behavioral health and telehealth costs for Medicare Advantage members for the remainder of 2020. In addition, offering our Community Connections Help Line, available to anyone in need of help beyond medical care, as well as expanded benefits including extended meal program benefits, over-the-counter (OTC) allowances, and annual wellness visit incentives to help members in need of extra support. |
Formed partnership with the |
Expanded partnership with |
Employees |
10 additional working days of paid leave to support employees |
Waiving prior authorizations and employee cost sharing for COVID-19 related screening, testing and treatment |
Encouraging employees to work from home, with approximately 90% working remotely |
Providing essential workers with a one-time payment of in appreciation and recognition of their willingness to serve in their important office roles |
Scheduling essential workers to preserve social distancing, and enhancing health and safety protocols such as daily cleaning and disinfecting for essential workers |
Establishing a Medical Reserve Leave policy to support clinical staff paid leave and benefits for up to three months of volunteer COVID pandemic service |
Hiring continues across the country to fill nearly 2,000 open positions |
|
Expediting the rollout of FirstNet that will streamline access to affordable, |
Dedicating funds to the |
Expediting the distribution of approximately 2 million pieces of PPE |
Extending grants to providers to assist with the upfront investment costs of new devices and equipment. |
Developing a new Provider Accessibility Initiative (PAI) COVID-19 Web Series to provide timely recommendations on how |
In partnership with Quest Diagnostics, distributing 25,000 COVID test kits each week to FQHCs in ten states or districts across the country. |
Investments in |
Donated |
View original content:http://www.prnewswire.com/news-releases/centene-corporation-reports-second-quarter-2020-results-301100694.html
SOURCE
Investor Relations Inquiries - Jennifer Gilligan, Senior Vice President, Finance & Investor Relations, (212) 549-1306; Media Inquiries - Marcela Manjarrez-Hawn, Senior Vice President and Chief Communications Officer, (314) 445-0790