One Insurer Is Making Obamacare WorkBy
Centene shares gain 0.9 percent after beating estimates
ACA market ‘continues to be particularly strong,’ CEO says
Just hours before Senate Republicans are expected to take a crucial first vote on repealing Obamacare, one health insurer is saying that its big bet on the health insurance law has been paying off.
Centene Corp. beat Wall Street’s earnings estimates for the second quarter, and said that much of its strength came from the company’s Affordable Care Act marketplace health plans, where the insurer has about 1.1 million of its 12.2 million customers.
“The Marketplace business continues to be particularly strong, confirming our business-as-usual approach,” Centene Chief Executive Officer Michael Neidorff said in a statement announcing the quarterly results.
The shares rose 0.9 percent to $84.95 at 10:50 a.m. in New York. Excluding some items, second-quarter earnings were $1.59 a share, beating the $1.33 average of analysts’ estimates. Almost half of the beat came from better-than-expected performance in Obamacare, according to the company.
The marketplaces that are working well for Centene are the sames ones Republicans in Congress and President Donald Trump have said are failing. Other health insurers have struggled to profit in the markets and in many cases, have pulled back from the program.
Senate Repeal Debate
In Washington, senators are expected to begin voting Tuesday on their effort to repeal and replace much of the Affordable Care Act. The 2010 law expanded insurance to about 20 million people, both by opening the Medicaid program to more low-income people, and by providing subsidies to help people buy private insurance in the new marketplaces set up by the law. It’s not clear if they have the votes to pass legislation, or what that legislation will ultimately look like. Trump, on Tuesday, tweeted that the law was “torturing the American people.”
On a call with investors Tuesday, Neidorff called the health-care legislation a “moving target, with a long way to play out.”
The repeal effort would likely reverse those coverage gains entirely, according to estimates by the nonpartisan Congressional Budget Office, posing a particular challenge to insurers like Centene.
Trump and other Republicans criticize the ACA as failing and collapsing. Yesterday, in remarks to a group of Boy Scouts, Trump said Health and Human Services Secretary Tom Price would hopefully “start our path toward killing this horrible thing known as Obamacare that’s really hurting us.”
Centene is expanding its Obamacare footprint in nine states for next year, hoping to take advantage of the exits to build its business. It also raised its full-year adjusted earnings forecast on Tuesday, to $4.70 to $5.06 a share, up from $4.50 TO $4.90.
For more on where insurers are entering and exiting the ACA’s markets, click here.