Centene announced Monday it onboarded 1.1 million new members from the end of March through August, as the coronavirus pandemic drove historic job losses, booting millions of Americans off employer-sponsored insurance.
The membership hike was in line with the St. Louis-based payer’s expectations, and puts it well on track to meet its forecasts of 1.4 million new members by November. Centene also reaffirmed its previously issued full-year earnings per share expectations of $4.76 to $4.96. Its stock was up almost 4% in the hours following the news.
Also on Monday, the payer announced a partnership with Samsung to give 13,000 smartphones to patients in rural and underserved areas to help increase access to virtual care.
The U.S. economy has recovered somewhat from a nadir in March and April, but the COVID-19 recession resulted in ripples of furloughs and job losses across myriad industries. Millions of Americans were quickly unemployed. Estimates on how many people lost job-based health insurance vary, but one of the newest studies, from the Economic Policy Institute, estimates about 12 million Americans have lost coverage since February.
As a result, the unemployed are turning in droves to marketplaces maintained by the Affordable Care Act and Medicaid, two sweet spots for Centene. It’s the biggest player in the ACA exchanges, with about 2.2 million customers, and the largest Medicaid managed care provider, with almost 12.6 million covered lives.
Of the 1.1 million new members, “many of these individuals joined our programs as a result of having lost their jobs,” CEO Michael Neidorff said Monday at Morgan Stanley’s annual global healthcare conference. The majority of the increase is in the payer’s Medicaid population, but there’s been significant increase in its individual marketplace membership, Neidorff said.
Centene’s utilization, risk-sharing mechanisms and rate adjustments also continue to be in line with expectations. Utilization began to return gradually in July and August, but hasn’t yet returned to pre-COVID-19 levels. A Centers for Disease Control and Prevention survey conducted in mid-July found more than 44% of people were delaying or not receiving care, citing numerous concerns, including the pandemic.
Neidorff said he expects utilization to return to 65% to 80% of normal levels by the end of the year, but is “cautious” when prognosticating as COVID-19 incidence could still shift dramatically.
“We don’t know what other peaks we’re going to see, and experts think we’re going to see more peaks this year,” Neidorff said.
Following historically high second quarter profits, payers are ratcheting up their investment in the ACA exchanges for 2021 in a bid to capitalize on these trends. Centene announced last week it would sell marketplace plans in 400 new counties next year, including in two new states — New Mexico and Michigan. Similarly, Cigna plans to add 79 new counties to its exchange footprint for 2021, broadening its consumer reach by 50%.
The Samsung partnership is meant to help members more easily access telehealth. The U.S. faces stark disparities in virtual access to healthcare driven by a lack of high-quality Internet in many areas that also face a lack of providers.
Samsung will give 13,000 smartphones with 90 days of free wireless service to about 200 federally qualified health centers, providers and community organizations in Centene’s mostly rural and underserved markets.
The providers will then choose which patients should receive a device. Centene did not respond to questions about which markets would be prioritized for the partnership, how providers would select patients of most need or how the partnership is being funded.
“You’re going to be seeing more [virtual care], but we’re going to be doing it the way we want to do it with our systems and our capabilities,” Neidorff said. “It’s just not going to be Zoom or whatever.”